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  Q. What is an active adult retirement community? A. Retirement communities are age-restricted and often located near metropolitan areas or nearby suburbs. The minimum age is typically 55, with one member of the household qualifying. Some communities restrict ownership to those age 62 and older, and all occupants must be at least 62. Driving by, though, you might think it's just another subdivision. Many are gated and private. Homes are closer together and lot sizes smaller. Most of the homes are based on particular models, so they tend to resemble each other. Almost all offer a laundry list of activities and amenities. Senior Living in Style: Amenities Home owners in active adult retirement communities pay into a homeowner's association, which cares for the grounds and handles maintenance. Part of the homeowner association fees pays for such amenities as:
The list is endless. Retirement is a time to play and, for many, a time to enjoy meaningful work. Seniors over 55 know how to have fun and enjoy the social aspect of being surrounded by friends who like to do the same things that they do. Benefits to Seniors Living Why move out of a perfectly comfortable home that has served you well for a decade or more and into a retirement community filled with strangers? There are plenty of benefits that lure seniors into these 55-plus subdivisions.
The process of Buying a Home in an Active Adult Community is no different then buying a home any place else: Most people don't realize that even when buying new construction from a builder, it's a good idea to hire your own professional real estate agent to represent you: An experienced agent who understands 55-plus communities. Frequently asked questions and answers Q. Why should I buy, instead of rent? A. Renting for seniors often makes good sense, but in today's market, with rents going up and house prices coming down, it usually makes more sense to purchase. Although the majority of home buyers over 62 pay cash for a new home, many are still exploring the advantages of taking a mortgage, so we included good mortgage information for you. If you are not paying cash, before going into the market to shop For your home, It is essential that you first get pre qualified for a mortgage, so you go into the market with the negotiating power you need. We can help facilitate this for you. Most people understand that one of the major advantages in getting a mortgage, is that you can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes. This will save you a lot each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. You can also deduct the property taxes you pay as a home owner. In short, when you rent you're essentially paying the mortgage for the property owner, when you could be building equity in your own real estate investment . An additional plus for many seniors is that your home historically will become an appreciating asset in your estate. Finally, and most important to many people, you'll enjoy having something that's all yours - a home where your own personal style will tell the world who you are. Q. What price home can I afford? A. The answer to this has a lot to do with your income and the amount of your debt load. As a rough rule of thumb, most home buyers purchase houses that cost between 1 1/2 and 2 1/2times their annual income. There is, however, a degree of variation due to the individual market prices of the area in which you are interested. In some areas there may not be houses available within that range, so you may need to spend a bit more. In general, however, your monthly mortgage payment can not exceed approximately 28% - 29% of your gross monthly income. These ratios will depend on the type of mortgage for which you are applying. Q. Should I use a real estate agent? A. As real estate agents, of course the answer is yes. The truth of the matter is, once anyone begins to realize the complexities involved in purchasing a home, the answer speaks for itself: Using a real estate agent becomes essential. The details involved in home buying, particularly the financial ones, can be mind-boggling. A good real estate professional can guide you through the entire process and will make the experience much easier. (And what's best, it cost's you nothing). We are well acquainted with all the important things you'll want to know about a community … the safety of the neighborhood, traffic volume, medical facilities, the amenities, and much more. We help you figure the price range you can afford and have the tools to search for homes in communities, which are right for you. we will save you hours of wasted driving-around time. When it's time to make an offer on a home, we point out ways to structure your deal to save you money, guide you through the paper work, the home inspection process, and set you up with the most reliable title company to handle your closing. We are there to hold your hand and answer last-minute questions when you sign the final papers. And remember you don't have to pay us anything! The payment comes from the home seller - not from the buyer. It's most important that you select a real estate agent you will feel comfortable working with. The person must be a professional who listens carefully to your needs and puts your interests before his or her own. (Usually not a relative or friend) Q. How much money will I have to come up with to purchase? A. That depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come up with enough money to cover three costs: earnest money - the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house; the down payment, a percentage of the cost of the home that you must pay when you go to settlement; and closing costs, the costs associated with processing the paperwork to buy a house. When you make an offer on a home, we will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your earnest money varies between 5 and 10% . The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the purchase price. The Closing costs - which you will pay at settlement average about 3-4% of the price of your home. These costs cover various fees your lender charges and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won't be caught by surprise. Q. In addition to the mortgage payment, what other costs? A. Well, of course you'll have your monthly utilities. If your utilities have been covered in your rent, this may be new for you. Your real estate broker will be able to help you get information from the seller on how much utilities normally cost. In addition, you might have homeowner association or condo association dues. You'll definitely have property taxes, and you also may have city or county taxes. Taxes normally are rolled into your mortgage payment. Again, we will be able to help you anticipate these costs. Q. So what will my mortgage cover? A. Most loans have 4 parts: principal: the repayment of the amount you actually borrowed; interest: payment to the lender for the money you've borrowed; homeowners insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders; and property taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year. Most loans are for 30 years, although 15 year loans are available, too. During the life of the loan, you'll pay far more in interest than you will in principal - sometimes two or three times more! Because of the way loans are structured, in the first years you'll be paying mostly interest in your monthly payments. In the final years, you'll be paying mostly principal. Q. What do I need to take when applying for a mortgage? A. Good question! If you have everything with you when you visit your lender, you'll save a good deal of time. You should have: 1) social security numbers for both your and your spouse, if both of you are applying for the loan; 2) copies of your checking and savings account statements for the past 6 months; 3) evidence of any other assets like bonds or stocks; 4) a recent paycheck stub detailing your earnings; 5) a list of all credit card accounts and the approximate monthly amounts owed on each; 6) a list of account numbers and balances due on outstanding loans, such as car loans; 7) copies of your last 2 years' income tax statements; and 8) the name and address of someone who can verify your employment. Depending on your lender, you may be asked for other information. Q. What is a reverse mortgage and how does it work? A. Perhaps you've heard the actor Robert Wagner extolling the virtues of reverse mortgages to senior's .Although the majority of home buyers over 62 pay cash for a new home, you might want to later consider a reverse mortgage: How Does a Reverse Mortgage Work? Reverse mortgages allow a home owner to borrow equity. Instead of making payments to the lender, the lender makes payments to the borrower. Payments can be made as follows:
Who Can Qualify for a Reverse Mortgage?
How Much Do Reverse Mortgages Cost? Like with a regular loan, borrowers pay fees to get the money. These fees can be rolled into the loan and financed. Because there are no "standard charges," the fees will vary depending on the lender, third-party vendors and the type of loan selected. Basically, borrowers pay for:
How Much Can You Borrow? The amount of loan available depends on the type of loan program selected, how much equity remains after paying off existing mortgages and the borrower's age. Wells Fargo is a leading originator of reverse mortgages. There is a very handy on line calculator on the Wells Fargo Web site: wells Fargo Reverse Loan Calculator. We plugged in an age of 65 and a free and clear home worth $500,000. For an Annual Adjusting HECM (Home Equity Conversion Mortgage) the calculator returned estimated closing costs of $20,943, with a lump sum payment available of $129,614, bearing annual interest at 8.67%, which could go up as high as 13.67% over the term of the loan. The monthly payment available for this loan is $949. At age 75, however, that monthly payment jumps to $1,401. What Types of Programs Are Available? A handful of lenders such as BNY Mortgage offer fixed-rate mortgages. The bulk of other reverse mortgage programs are financed through an adjustable rate mortgage loan. The interest can adjust monthly or annually.
The most popular type of reverse mortgage today is the Home Equity Conversion Mortgage, insured by the U. S. Department of Housing and Urban Development. The "HomeKeeper Mortgage" is from Fannie Mae. Fannie Mae buys conventional mortgages, repackages them and sells them as securities to investors. Using the Wells Fargo Reverse Mortgage Calculator and previous scenario, at age 65, The HomeKeeper mortgage would pay $587 per month and $1,381 at age 75. Where Can You Get a Reverse Mortgage? Many mortgage brokers and major lending institutions offer reverse mortgage products.
Q. What are all of the tax breaks for buying a home? A. For those of you that are considering a mortgage: Mortgage interest. For most people, the biggest tax break from owning a home comes from deducting mortgage interest. You can deduct interest on up to $1 million of debt used to acquire your home. Your lender will send you Form 1098 in January listing the mortgage interest you paid during the previous year. That is the amount you deduct on Schedule A. Be sure the 1098 includes any interest you paid from the date you closed on the home to the end of that month. This amount is listed on your settlement sheet for the home purchase. You can deduct it even if the lender does not include it on the Form 1098. If you are in the 25% tax bracket, deducting the interest basically means Uncle Sam is paying 25% of it for you. A $1,000 deduction will reduce your tax bill by $250. Points. When you buy a house, you usually have to pay "points" to the lender to get your mortgage. This charge is usually expressed as a percentage of the loan amount. If the loan is secured by your home and the number of points you pay is typical for your area, the points are deductible as interest if you paid enough cash at closing -- via your down payment, for example -- to cover the points. For example, if you paid two points on a $300,000 mortgage -- $6,000 -- you can deduct the points as long as you put at least $6,000 into the deal. And, believe it or not, you get to deduct the points even if you persuaded the seller to pay them for you as part of the deal. The deductible amount should be shown on your 1098 form. PMI premiums. Buyers who make a down payment of less than 20% of a home's cost usually get stuck paying premiums for private mortgage insurance (PMI), an extra fee that protects the lender if the borrower fails to repay the loan. For mortgages issued in 2007 and 2008, PMI premiums can be deducted by homebuyers. This new write-off phases out as income increases above $50,000 on single returns and above $100,000 on joint returns. (If you're paying PMI on a mortgage issued before 2007, you're out of luck on this one.) Real-estate taxes. You can deduct the local property taxes you pay each year, too. The amount may be shown on a form you receive from your lender, if you pay your taxes through an escrow account. If you pay them directly to the municipality, though, check your records or your checkbook registry. In the year you purchase your residence, you probably reimbursed the seller for real estate taxes he or she had prepaid for time you actually owned the home. If so, that amount will be shown on your settlement sheet. Include this amount in your real-estate tax deduction. Note that you can't deduct payments into your escrow account as real-estate taxes. Your deposits are simply money put aside to cover future tax payments. You can deduct only the actual real-estate tax payments made from the account by your lender. Home improvements. Save receipts and records for all improvements you make to your home, such as landscaping, storm windows, fences, a new energy-efficient furnace and any additions. You can't deduct these expenses now, but, when you sell your home, the cost of the improvements is added to the purchase price of your home to determine the cost basis in your home for tax purposes. Although most home-sale profit is now tax free, it's possible for the IRS to demand part of your profit when you sell. Keeping track of your basis will help limit the potential tax bill. When you are ready, we would like to become your Realtor by gaining your confidence in our knowledge, integrity, and performance capabilities: At Long and Foster Real Estate, we have all the assets needed to get the job done.
NUMBER1EXPERT® © Best Image Marketing and/or its clients. All rights reserved. All information deemed reliable but not guaranteed. |
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Long and Foster Real Estate, inc. 1415 Route 70 East 200 Cherry Hill Plaza – Suite 106 Cherry Hill, NJ 08034
Office: 856 757 2200 Fax: 856 310 19229
