Bankers Hear Discouraging News About Mortgages

Daily Real Estate News October 16, 2007

The continuing spike in foreclosures, combined with the glut of unsold homes, will prevent any rapid price rebound, mortgage experts told attendees at the Mortgage Bankers Association annual convention going on now in Boston.

"I think this year we will see a 2 percent decline in national home prices, and we're projecting about a 4 percent decline next year," says Thomas Lund, an executive vice president at Fannie Mae.

Prices will likely flatten out in 2009, Lund says, before gradually rising in 2010. Lund expressed support for legislation that aims to infuse more cash into the market and give lenders more leeway to help at-risk home owners refinance.

Source: Dow Jones International News (10/15/07)

Seniors looking to remodel share unique concerns

How costs, contractors, health outlook affect home-improvement plans

Reprinted from Inman News By Tom Kelly - October 3rd, 2007

If you decide that you are going to spend your remaining years in your primary residence or your second home -- and an overwhelming number of seniors would prefer to stay put -- what will you do to make those homes more comfortable?

That topic will be the prime focus of National Aging in Place Week (Oct. 1-7) as home modification experts, geriatric care managers, financial planners, home care workers and other experts in senior living gather to provide residents the information they need to find products and services to continue to live in the home of their choice.

According to AARP, the organization formerly known as the American Association of Retired Persons, nearly a quarter of Americans aged 45 or older say they or someone they live with will have trouble maneuvering around their home in the coming years. A survey by the group -- the United States' largest organization for those 50 and older -- showed that fewer than 10 percent of the nation's approximately 100 million housing units have features to make them universally accessible.

The survey also revealed that 90 percent of persons older than 65 would prefer to remain in their homes, but as they age accessibility problems can become an issue and make their age-in-place goal unattainable.

The process of altering a home to age in place is often complicated by the limited dollars you have. Every dollar of hard-earned cash can easily be spent elsewhere, so it's always important to plan before you remodel. Renovating your house is not an all-or-nothing process. Every area offers a lot of possibilities to spend more or less. However, if you are spending money to become more comfortable and be safer as you age, do your best to get what you pay for.

No matter the project, ask yourself the following four questions:

1. How long do I realistically intend to stay in this house? While the answer is often difficult to figure out, give some thought to a best guesstimate. While minor home modifications are fine for the short term, it's usually not advisable to go through the anxiety of a major room remodel if you definitely will move out in a few months. Roofs are a different story because they often are mandatory.

2. Who will do the work? When you employ construction help, it's important to find efficient and honest workers. If you have used contractors in the past, you probably have a roster of dependable helpers.

3. How do you find contractor referrals? Your primary source is friends who may have used others in the past or the local senior center can help. Also, ask the local home-builder association about its certified aging-in-place specialists (CAPS).

4. How will you pay for the remodel? If you are using a line of credit or a reverse mortgage that features a line of credit for all or part of the remodel, you will pay interest only on the funds you actually use. For example, you could pay one lump sum for a roof replacement, then wait until other remodeling bills or maintenance receipts are sent to you before drawing on your credit line.

While healthy returns on home improvements are great, some seniors simply seek comfort and don't really care if they recoup their investment. Others want the peace of mind of knowing that their children might recover a portion of the remodeling costs if or when the house is eventually sold. The impact of any home improvement on the ultimate sales price is not the same in all cases and usually depends on the location and condition of the overall house and the market demand at the time the home is marketed for sale.

What adjustment do you make first? How do you judge need versus want? Most of the time, you start with the roof over your head. One of the first places seniors plop down money is to repair or replace the roof of their longtime home. A bad roof will make even the best of houses unlivable. So it is a necessary evil that the owner cannot do without.

Take some time to decide what you need in your home to make you more comfortable in the years to come. To learn more about National Aging in Place Week, visit www.naipc.org.

To get even more valuable advice from Tom, visit his Second Home Center.