Monthly Archives: March 2014

Top 10 Kitchen Trends of 2014

d7076940-b474-11e3-bdba-19c81b89fedf_1-KBIS_Thermador-Freedom-Kitchen“Kitchen remodels are some of the best investments that you can make in any home. Each year there are new ideas that appear around technology and materials.  Las Vegas, Nevada is home to the annual Kitchen & Bath Industry show, and here are some notes from a regular contributor of BobVila.com that we think you will find very interesting.”

DC Metro Realty Team – Denise Buck & Ed Johnson

This year is definitely the year for your kitchen! Over the past few years the trend of modernizing your kitchen to fit your lifestyle has been apparent with technology-driven appliances and innovative surfaces and materials. I traveled to Las Vegas, Nevada in February for the annual Kitchen & Bath Industry show (KBIS). Here are 10 wonderful highlights of the show and how your kitchen still rules the home.

Sink

 

 

 

 

 

 

1. Modern kitchen innovation that gives a hint of the past:

There has been a re-emergence in kitchen design to bring back old world finishes and blend them with modern innovation. Modern countertops in granite, marble and solid surfacing can take on a vintage appeal with beveled edges and details that went away with handcrafted cabinetry years ago. Kitchen faucets that resemble ‘hand-forged sentiments of early 20th century metalworkers, Artesso™kitchen faucets blend traditional design with industrial chic inspiration’ was gorgeous to see from Brizo faucets. It was also nice to see that kitchen manufacturers haven’t forgotten that historic details in the kitchen still have a place in our homes.

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2. Commercial-quality kitchen amenities in your humble abode:

While we all love the comfort of quaint homes, do you sometimes prefer the industrial feel of a commercial kitchen? At KBIS, you could see a definite trend of kitchen manufacturers appealing to both aesthetics. Blanco sinks features their Quatrus R15 stainless steel sink that offers a revolutionary sleek appeal while still enabling homeowners to wash it easily. Turn your kitchen into that commercial kitchen you always wanted with amenities that show off your inner culinary chef .

3. Kitchen accessories aren’t just for show anymore:

Years ago, kitchen accessories played a minor role in function and were instead meant to compliment the sink, faucet or cabinetry of the kitchen. Today, kitchen brands are realizing that homeowners want form, function, and beauty all wrapped up into one. Accessories such as colanders and cutting boards can now fit seamlessly into the sink to help you drain or cut your favorite vegetables. There is no longer a reason to wonder, “What does that do?” in your modern kitchen.

Organized Drawers

 

 

 

 

 

4. Organize your kitchen drawers like never before:

Drawers are commonly used to separate items like spices and utensils. But did you know you can also use your drawers to store bread in their very own customized bread boxes? There was a big representation of brands such as Poggenpohl’s drawer accessories that included cutlery trays, spice racks, knife blocks, bread drawers and aluminum foil holders, among other things. Instead of organizing just a few items in your kitchen, organize your kitchen drawers around the way you and your family use the kitchen.

5. Lighting your kitchen in eco-friendly ways:

Just like the evolution of your home, lighting plays an integral role in ensuring your kitchen experience is safe, enjoyable, and helpful for all your kitchen activities. While traditional lighting fixtures such as pendants and under cabinet lights aren’t new – the use of eco-friendly LED lighting inside of cabinets, drawers, and below the base cabinets is proving to be more helpful to the culinary enthusiast. Whether you have your hands full and don’t have time to reach a light, or you’re looking to add more illumination to your kitchen’s darkest nooks, LED lit cabinetry and drawers may be exactly what you’re looking for.

Decorative Tile

 

 

 

 

 

 

 

6. Decorative tile becomes the showstopper over the appliances:

There used to be a time when you walked into a kitchen and all eyes went to the appliances. While appliances are still a major opportunity to wow guests, decorative tile is the perfect crowning glory to a dynamic kitchen. This year, tile manufacturers are holding nothing back and Walker Zanger has always been known for their innovative and iconic tile design styles. This Chelsea Art Glass backsplash is the “Epitome of glass craftsmanship, offering a collection of stunning Tiffany-inspired mosaics created from sheets of colorful, marbleized glass. The glass sheets are hand-cut and blended to create 12 unique shades”. If you’re looking for a way to add pizazz to your kitchen, look to decorative tile to add a glamorous personality to the heart of your home.

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7. Saving money in the kitchen is easier than ever

While we all enjoy splurging on our home improvements, saving money on your kitchen renovation is essential. While there was an enormous representation of high-end remodeling ideas at KBIS, there was also a nice contrast of kitchen brands that understood that homeowners like to save money too. I interviewed fixture manufacturer Danze, whose high-quality kitchen faucets are designed save consumers money. They think, “…Your kitchen faucet should do more than just wash vegetables. It should nourish your eye for great design, too. We offer an appetizing array of unique kitchen faucets, bar and convenience faucets and pot fillers. With plenty of smart styles to reflect your personal taste.”

8. Filtered water for your family, delivered in a gorgeous way

Over the years water filtration has become more important as water becomes a more precious resource. Kitchen plumbing manufacturers are finding a way to eliminate the clunky add-on water filter on the outside of your faucet, or under your sink. Brands like ROHL’s Perrin & Rowe are using, “… Filtration featuring Triflow® Technology. This innovative faucet series provides beauty and functionality in one space-saving design. Filtration happens right in the faucet and eliminates the need for an under- the-counter system. Enjoy hot, cold and filtered water while saving money and protecting the environment’”.

Countertops

 

 

 

 

 

 

9. Affordable countertop surfaces that give the look of luxury

Countertops can be a very expensive portion of your kitchen entourage. Lucky for you there are several kitchen countertop manufacturers that understand homeowners want the look of granite, stone, and marble without the hefty price tag.  Formica Corporation has created the 180fx® laminate countertop surface. “A revolution in surfacing with true-to-scale granite patterns that offer visual drama unmatched by any other laminate. New sophisticated patterns focus on a neutral palette – versatile enough to pair with any interior design concept.” So don’t think the kitchen remodel you want is out of reach. It may be possible thanks to these new patterns!

10. Creating connections between your lifestyle and cooking

We live in a wonderful design age where kitchen manufacturers are realizing the importance of connecting how we all live in our homes, the way we interact with our appliances, the way we prepare food, and the way appliances, fixtures, and finishes should interplay with our senses. KBIS is a wonderful example of how the best minds come together to show you what is available today and what they are working on for your future. It’s still true: The kitchen rules our homes and rightfully so. It’s the soul of our home and the way we come together with family and friends!

By Freshome for BobVila.com as published on Yahoo Homes

Be sure to Deduct the Points you Paid

Deductibility“Always remember to take the proper deductions on your taxes when you have bought or refinanced your home.”

DC Metro Realty Team – Denise Buck & Ed Johnson

Prepaid interest, sometimes called “points”, is generally tax deductible when a person pays them in connection with buying, building or improving their principal residence. When points are paid on a refinance, they are not a current deduction but have to be taken prorata over the life of the mortgage.

For instance, if $3,000 in points were paid on refinancing a 30 year mortgage, a deduction of $100 per year is allowed. When the loan is paid off or replaced by refinancing again or the home is sold and the mortgage paid off from the proceeds, the balance of any un-deducted points may be taken in that tax year.

Your tax professional needs to be made aware of any of these situations so that he or she can accurately reflect the deductions in your return. Currently, the most common situation is homeowners may be refinancing their home for the second, third or even, fourth time. If there are points that have not been completely deducted, they need to be treated in the year of refinancing.

For more information, see points in IRS Publication 936; there is a section on Refinancing in this publication. For advice considering your specific situation, contact your tax professional.

How’s Your IQ on the QM (Qualified Mortgage)?

Qualifiying Quideline“Recently a number of changes took place on the Qualified Mortgage Rule.  In the end, these changes will affect how you are looked at by the Mortgage Lenders.  You should understand what changes took place and what the lenders are looking for these days when making their decisions.”

 

DC Metro Realty Team – Denise Buck & Ed Johnson

The Qualified Mortgage Rule came into effect on January 14, 2014 as one of the results to the Dodd Frank Reform Act to protect consumers from predatory lending practices. This will affect the underwriting standards that the majority of lenders will use to qualify borrowers.

The ability to repay rule states that financial information must be supplied by the borrower and verified by the lender. The borrower must have sufficient assets or income to pay back the loan which limits the maximum debt-to-income ratio of 43%. In an effort to present a more accurate picture of the costs to the borrower, teaser rates can no longer hide a mortgage’s true cost.

A maximum of 3% in upfront points and fees can be paid on behalf of the borrower. There can be no negative amortization, interest-only or balloon payments and the loan term limit cannot exceed 30 years.

While there are more requirements, most deal with good underwriting practices that are followed by reputable lenders such as considering and verifying things that affect the ability to repay the mortgage like income, assets, employment status, simultaneous loans, debt, alimony, child support and credit history.

Buying a Home Less Expensive than Renting

House-in-Hands“We often have prospective First Time Buyers who are trying to weigh the Pros and Cons of Renting versus Buying.  Usually ‘Financially Speaking’ it is better to Buy in the long run, but you have to understand your current situation thoroughly.  Working with one of our Lenders will help answer the questions you need answered before making this final decision.”

 

DC Metro Realty Team – Denise Buck & Ed Johnson

Trulia released their Rent vs. Buy Report last week. The report explained that homeownership remains cheaper than renting in all of the 100 largest metro areas by an average of 38%!

The other interesting findings in the report include:

  • Even though prices increased sharply in many markets over the past year, low mortgage rates have kept homeownership from becoming more expensive than renting.
  • Some markets might tip in favor of renting this year as prices continue to rise faster than rents and if – as most economists expect – mortgage rates rise, due both to the strengthening economy and Fed tapering.
  • Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.

Buying a home now makes sense. You can lock in a mortgage payment before home prices and mortgage rates rise as experts expect they will. If you rent, your housing expense will only continue to increase.

This article originally posted by Keeping Current Matters. Read more articles like this at www.KCMblog.com.

Home Improvements that Pay Off!

Which_Home_Improvements_Actually_Pay-a1cba2cdd2f82e9613e30166ddafd7a7“Quite often, as our clients are contemplating a Home Improvement project they will consult us to make sure they are going to get their money back.  This is especially true for those who are thinking of Selling, but realize that they have not done any upgrades since they bought the house 10, 15 or more years ago.  Here are some very revealing numbers to consider before you start that next big project.”

 

DC Metro Realty Team – Denise Buck & Ed Johnson

Even the most valuable remodeling projects don’t completely recoup the cost, according to Remodeling Magazine’s annual cost vs. value report. The project with the highest return on investment — installing a steel door — only recoups 97 percent of its cost. That wasn’t always the case. In 2009, steel doors had an ROI of 125 percent. But in 2011, it fell to 73 percent.

These huge swings are due to fluctuations in home prices — and when home prices dropped, so did ROI on remodeling projects. But now that home prices are rising and construction costs are relatively stable, homeowners can expect to see these projects pay off. Here’s what you can expect to pay — and recoup — from some of the most common remodeling projects, from a minor kitchen redo to a two-story addition.

Minor Kitchen Remodel

 

Businesswoman-getting-glass-off-shelf_web

 

Average national cost: $18,856
ROI: 82.7 percent

While any kitchen remodel will add some value to your home, less is more when it comes to ROI. If you’re remodeling on a budget, focus on a few key areas: Replace dated appliances with more modern, stainless steel models; replace aging countertops with sturdier materials that you can afford; replace cabinet hardware (but leave the boxes in place); and apply a fresh coat of paint or add a new backsplash.

Major Kitchen Remodel

 

Interior-kitchen_web

 

Average national cost: $54,909
ROI: 74.2 percent

Any real estate agent will tell you to invest your time and money in the kitchen if you want to add value to your home. Why? Because kitchens make a big impression — and home buyers want them to be modern, functional and well-maintained. The average cost of a major kitchen remodel is high, but includes a complete gutting — from cabinets to appliances to flooring and replacing them with modern mid-range materials.

Be careful not to go too far with kitchen remodels. Unless you’re living in a high-end, luxury home, you shouldn’t have high-end, luxury appliances (like a top-of-the-line Sub-Zero fridge, for example) or personalized gadgets — they won’t matter to your targeted buyer or add value to your home.

Bathroom Remodel

 

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Average national cost: $16,128
ROI: 72.5 percent

Second to the kitchen, a modern bathroom is high on many home buyers’ wish lists. The average cost of a bathroom remodel includes replacing a porcelain-on-steel tub, shower head, toilet, sink, vanity, as well as floor and wall tiles. But you don’t have to do all that to boost your home’s value. To get the biggest bang for your buck, keep the tub, toilet and sink and focus on replacing the vanity surface with solid material (think: granite, quartz, marble), installing better faucets and a shower head and updating tiles around the shower. These surface additions are more visible and reflect taste prospective buyers will appreciate.

Basement Remodel

 

Finished-white-basement-in-house_web

 

Average national cost: $62,834
ROI: 77.6 percent

There’s a reason you see “finished basement” advertised in so many home listings — it’s an attractive feature. To get the full value out of your remodel, you want the basement to provide space for entertaining your family or guests. It should be big (and finished) enough to be a truly useful space. The average cost of a basement remodel includes adding a bathroom with a glass shower, a 20×30 foot entertaining area with a wet bar, insulated walls and laminate flooring. However, keep in mind that below-grade rooms like basements don’t add as much value as above-grade rooms, like an attic conversion.

Attic Conversion

 

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Average national cost: $49,438
ROI: 84.3 percent

Converting your attic into a livable space accomplishes two things that add value: It adds square footage and a bedroom without increasing the footprint of the home. By adding that extra space, particularly a bedroom, you’ve moved your home into a new category — a four bedroom instead of a three bedroom, for example — and that’s guaranteed added value. Remodeling Magazine’s average cost includes a bathroom, which does add value, but can be cost-prohibitive in some attics.

Two-Story Addition

 

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Average national cost: $155,365
ROI: 71.8 percent

Adding on space — specifically a family room, bedroom and bathroom — will always add value to your house, but it’s hard to completely recoup such a high cost. However, when adding onto a home, you’re probably thinking more about creating more space for yourself than the next owner, which to many people may be worth the money.

Deck

 

Beautiful-wooden-back-deck_web

 

Average national cost: $9,539 for wood, $15,437 for composite
ROI: 87.4 percent for wood, 74.3 percent for composite

Outdoor living spaces are becoming more popular, and that means buyers are willing to shell out more money for homes that have these outdoor entertainment spaces. While wood decks add more value and cost less, they typically come with more maintenance costs (like staining) over time to maintain the wood.

Ilyce Glink is an award-winning author, columnist, radio talk show host and blogger who specializes in real estate and personal finance. Her articles appear on Yahoo, AOL, CBS News, and numerous blogs. Find her online at ThinkGlink.com.

Should I Rent My House If I Can’t Sell It?

Home-For-Rent“It’s not uncommon for people decide to keep their current home and rent it out, when they decide to buy a new home.  But is that the right decision for you?  There are many factors to consider first.  Here are 10 things to think about before you take the plunge into becoming a landlord.”

 

DC Metro Realty Team – Denise Buck & Ed Johnson

A recent study has concluded that 39% of buyers prefer to rent out their last residence rather than sell it when purchasing their next home.

The study cites that many homeowners were able to refinance and “locked in a very low mortgage rate in recent years. That low rate, combined with a strong rental market, means they can charge more in rent than they pay in mortgage each month, so they are going for it.”

This logic makes sense in some cases. We believe strongly that residential real estate is a great investment right now. However, if you have no desire to actually become an educated investor in this sector, you may be headed for more trouble than you were looking for. Are you ready to be a landlord?

Before renting your home, you should answer the following questions to make sure this is the right course of action for you and your family.

10 Questions to Ask BEFORE Renting Your Home

1) How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations? (This happens most often during holiday season and back-to-school time when families with children have extra expenses).

2) Because of the economy, many homeowners can no longer make their mortgage payment. What percent of tenants do you think can no longer afford to pay their rent?

3) Have you interviewed a few experienced eviction attorneys in case a challenge does arise?

4) Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?

5) Will you allow pets? Cats? Dogs? How big a dog?

6) How will you actually collect the rent? By mail? In person?

7) Repairs are part of being a landlord. Who will take tenant calls when necessary repairs arise?

8) Do you have a list of craftspeople readily available to handle these repairs?

9) How often will you do a physical inspection of the property?

10) Will you alert your current neighbors that you are renting the house?

Bottom Line

Again, renting out residential real estate historically is a great investment. However, it is not without its challenges. Make sure you have decided to rent the house because you want to be an investor, not because you are hoping to get a few extra dollars by postponing a sale.

This article originally posted by Keeping Current Matters. Read more articles like this at www.KCMblog.com.

How to Price Real Estate

1963-Chevrolet-Corvette“Pricing your home properly to start with is critical to generating Buyer interest.  A home that is priced initially at Market Value will bring in more offers faster than an over priced home, and will usually sell  for more in the end.”

 

 

DC Metro Realty Team – Denise Buck & Ed Johnson

Location may have the most effect on value but Price is without question the most important factor controlling the sale of real estate. Anything will sell anytime, how long will it take depends on the price.

Think about it this way – you may really want to buy a car for your collection and your favorite happens to be a 1963 Corvette. So you hear about one for sale, in mint condition, across town but the only problem is the price, the owner is asking $150,000! Well, although you really, really want a mint condition 1963 Corvette, there is no way you will pay anywhere close to $150,000, in fact you know that the most a 1963 Corvette has ever sold for is about $200,000 and that was for a very rare model, which this one is not.

Because you are a bit obsessed with owning one of these cars you spend almost all of your free time, and some of the time you should be working, searching the internet for available cars. Through this exhaustive search you have become somewhat of an expert on the values of 1963 Corvettes, especially in your town. You happen to know that the particular model for sale across town is worth about $95,000…maybe $100,000. In fact, if the asking price was $100,000 or even $110,000 you would’ve driven over there today with your checkbook and driven home in a 1963 Corvette!

So why don’t you go make an offer? Well, let’s face it when you see a price that is so high compared to the actual value it makes you think that the seller is either difficult to deal with and is out of touch with reality or that he must not really want to sell the car, instead he is just fishing for the one fool in the world that will pay $150,000 for a car that is worth $95,000. So you don’t even go look at it or call for more information…you just keep searching the various websites to find the car of your dreams.

Yes, you guessed it the Corvette in this example actually represents your home or other real estate you might be trying to sell. (in fact it represents any item that can be bought and sold).

Wiggle room = Bad idea

Most sellers think that it is necessary to “leave a little wiggle room” in the price. They think this because they think that all buyers will make aggressively low offers…no matter what the asking price. WRONG!!

Buyers pay the fair market value …in other words they will pay you what it is worth! Your job is to find out what it is worth and price it at or near that value.

This is where brokers and/or appraisers come into the picture. The right way to price your property is to have a professional REALTOR/broker or appraiser prepare a CMA (Comparative Market Analysis) on your property. A CMA involves finding recent sales of similar properties, adjusting for any differences, to arrive at a current market value of your property. Once you have this value you should have your broker set the asking price no more than 3% to 5% higher than that current market value.

If you do this, your property will sell quickly for a price equal to exactly what it is worth, or higher! Buyers as a general rule DO NOT make “low-ball” offers, there are some rare occasions when that happens but the vast majority of initial offers are 5% or less below asking price.

If sellers price their property correctly the buyers will know it immediately because, just like in the Corvette example, buyers spend every spare moment searching the internet for a home, they have made themselves experts on the market value of the particular type of home in the particular area they desire. For this reason the buyer also knows when a property is overpriced. Most buyers will not even go look at a property that is overpriced, they say to themselves “why bother?” they assume that the seller is unreasonable and/or is not truly interested in selling the property.

Yesterday, the Buyer’s Specialist that works for my team and I were showing a house to some buyers who were very motivated had already decided on the neighborhood. The house was well within their price range and met every one of their criteria. As we stood in the kitchen discussing what price we should offer we found ourselves drawn to the fact that the house had been on and off of the market for the last four years!

The conversation immediately turned to “what is wrong with this house?” It turns out that the house hasn’t sold because it was severely overpriced most of that 4 years, it happens to be well priced now but the stigma it carries because of the lengthy time on the market will likely result in it selling for less than it is really worth.

Moral of this whole story is – buyers will pay what it is worth – Seller’s job is to find out what it is worth and set the asking price 3%-5% higher than that number…then sit and wait for the offers to roll in.

This article originally posted by Keeping Current Matters. Read more articles like this at www.KCMblog.com.

Your Home is Worth… Current Market Value.

Fortune Cookie“Not setting the proper expectations on a homes Market Value with either the Buyer or Seller will negatively impact the process and disappoint all parties involved.  Starting out with the right information will always help make the process go smoother and faster.”

DC Metro Realty Team – Denise Buck & Ed Johnson

Coffee should be hot. Beer should be cold. Mexican food should be spicy. However, if these things are less than the standard that you expect, there are not any lasting consequences.

As the value of the object in question rises, either in price or gravity, the expectations usually increase and decisions become progressively more important. Marriage, children, health and careers are certainly a few of the more important items that bear careful consideration.

The sale of the largest asset that most people own, their home, also merits having reasonable expectations. A homeowner should expect to get the market value for their home in a reasonable period of time with as few inconveniences as possible.

According to the latest Home Buyers and Sellers Survey, more homeowners are entrusting the sale of their home to real estate professionals. Owners can increase the likelihood of a favorable outcome by sharing their expectations with agents prior to listing their home for sale.

Challenge your agent to explain what they intend to do to:

  • Price the home correctly
  • Prepare the home to make a good impression
  • Position the home in the marketplace

It is reasonable for a seller to expect the agent will work hard to sell the home; will tell the truth and represent the client’s interests to the best of their ability. Agents exemplify remarkable service when they exceed the seller’s expectations.

Changes to Reverse Mortgages

Reverse Mortgage“Everyone has heard of Reverse Mortgages, but not everyone knows how they really work.  About 3 years ago a relative of ours took one out when the rates were lower and the terms were different than they are today.  Everything that you thought you knew about Mortgages has changed and Reverse Mortgages are no different.  For the most up to date information on this Personal Finance option please read on…”

DC Metro Realty Team – Denise Buck & Ed Johnson

The television ads for reverse mortgages feature amiable aging actors and even a former U.S. senator who tries to convince viewers with sincere pitches.

“A government-insured reverse mortgage allows seniors to stay in their own home and turn their equity into tax-free cash without any monthly mortgage payment,” former Tennessee Sen. Fred Thompson says in one advertisement.

It’s a compelling sales pitch, but the truth is the U.S. Department of Housing and Urban Development’s Home Equity Conversion Mortgage program was a tottering structure facing collapse during the recession. The Reverse Mortgage Stabilization Act of 2013 then bolstered the foundation and kept the whole program from caving in.

Here’s a look at how the recent changes affected reverse mortgages, and if they’re a suitable solution for seniors seeking additional income.

How do reverse mortgages work?

Reverse mortgages can be marketed and sold by private companies, but the only reverse mortgage insured by the U.S. federal government is called a Home Equity Conversion Mortgage and is only available through an Federal Housing Administration approved lender.

A reverse mortgage is a loan you never pay back. If you are at least age 62, live in your home and either own it outright or have a low mortgage balance, you might qualify for a reverse mortgage. Essentially, it allows you to access a significant portion – but not all – of the equity in your home. Unlike a home equity loan, you don’t have to repay the loan. However, you will continue to be responsible for utilities, taxes and insurance coverage.

The loan is only due once the last surviving borrower dies or no longer lives in the home for 12 consecutive months or more. If heirs want to keep the home, they will need to pay off the loan balance. But if the loan balance is more than the home is worth, the FHA will accept a 95 percent payment of the home’s value. In the event the heirs cannot afford to buy the home, they will likely have to sell it to pay off the loan.

How has the loan program changed?

In order to rescue the FHA loan program, changes were made to the structure of the loans, and fees were increased.

The maximum size of a loan will depend on the age of the youngest borrower, the value of the home and current interest rates. However, under the new rules, the maximum amount borrowers can withdraw is about 15 percent less of their home’s equity than before the changes.

The FHA also now limits the amount of money that can be withdrawn immediately as well as during the first 12 months of the loan. There are some exceptions, but in most cases borrowers are eligible to withdraw up to 60 percent of their home’s equity.

Additional steps have also been taken to ensure that borrowers will be able to meet their continuing financial obligations, including taxes and insurance. For some borrowers, the FHA now requires payment of property taxes and insurance out of the reverse mortgage line of the credit or through term payments from an escrow account.

What are the fees associated with reverse mortgages?

Reverse mortgages are generally more expensive than other home loans, and with the fee increases mandated by the Reverse Mortgage Stabilization Act, even pricier than before. Fees you can expect to pay when taking out a reverse mortgage can include lender fees, mortgage insurance and closing costs. These fees can also be taken out of the initial loan proceeds.

The mortgage insurance payment goes directly to the FHA and is an ongoing fee for the life of the loan. If you withdraw 60 percent or less of the available funds in the first year, you will be charged a mortgage insurance premium of 0.50 percent of the appraised value of the home. If you take more than 60 percent of your equity, the upfront payment will be 2.5 percent. The annual premium is 1.25 percent of the outstanding loan balance, according to the National Reverse Mortgage Lenders Association.

The bottom line: Reverse mortgages might not be the “safe, simple solution” to retirement income that the TV spokespeople would have you believe, but they probably aren’t as evil as the naysayers make them out to be, either. The reality is probably somewhere close to the middle.

Originally posted by US News and World Report