One weekend, a Saturday in particular, I decided to attend a home remodeling seminar. I usually prefer to call it home improvement. It was mainly for the elderly.
I’m not in the old age bracket but decided to attend anyway because I felt a little lonely and wanted to be busy. Looking around I saw that most people were in my age group.
Think it’s because they have to bear most of the cost of refinancing the renovation of their old home.
This seminar turned out to be good for me and in the end I was convinced it was a good catch.
In this seminar, it was revealed that the research conducted so far shows this:
It will probably cost between $100,000 and $150,000 to do a good renovation of a seniors’ home. That seems like a staggering amount, until you consider that it would cost them $3,000 to $5,000 a month if they had to rent a unit in a nursing home somewhere they might not be. so happy. From that perspective, in four years or less, they would have spent the money anyway, and at least doing home renovations allows them to continue living in the same place and retain their asset.
The biggest challenge many seniors face when renovating their homes is how to pay for them. Many have fixed incomes with few resources. Their property may have gone up in value, but they are short on cash.
During this seminar, a flyer was distributed that provided a phone number for the City and County Division of Seniors Affairs Rehabilitation Loan Program. Many cities have similar funds to help people stay in their homes, rather than move to more expensive facilities.
I learned that the loan program was offered to an individual or family requiring home modifications based on a health or safety need. The home loan program required that an application be submitted with information on the number of people living in the household and their combined annual income. This information was then used to determine the interest rate for the loan. For example, for combined incomes less than approximately $41,000, the interest rate was 2%; for less than $52,000, 4%; And so on.
Another thing I learned is that you can also have an option, which is a reverse mortgage. A reverse mortgage is a special type of home loan that allows a homeowner to convert some of the equity in their own home into cash. Equity accumulated over years of mortgage payments can be paid to the homeowner, but unlike traditional home equity loans or second mortgages, no repayments are required until the borrower is no longer using the home as their primary residence .
Reverse mortgages are available from different lenders, as well as HUD. There are some ownership restrictions, but single-family homes, two- to four-unit properties, condominium units, townhouses, and some manufactured homes are eligible. Generally, the higher the value of the house, the older the owners, the lower the interest rates and the more one can borrow. That’s good news right now, with interest rates so low, and it’s an opportunity for your patients who have a higher annual income that disqualifies them from other programs. And if they live in an area of the country where land or home values are traditionally higher, such as Hawaii or New York, this may be the best option available for refinancing.
Considering the huge sum you need to invest or borrow, here is a checklist before deciding on any renovation project.
Consider the following before deciding how to finance your home improvement project:
– Talk to lenders about your options.
– Be aware that lenders are concerned about income, debts, credit history and property value.
– Consider a secured loan when you want to borrow more money, get a lower interest rate or lower your taxes.
-Refinance an existing loan if you have sufficient equity and rates are currently two points lower than when you originally borrowed the money.
-Use a home equity line of credit that is secured by your home so that your interest is tax deductible.
– Take out a home equity loan to get fixed rates and payments.
– Consider a homeowner’s loan secured by your property. Use a value-added loan when the improvement you make will have a substantial impact on the market value of your home.
– Do your research before using contractor financing.
Good luck
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