How can I be sure I won't lose money
on my new home?*
There is no guarantee that any particular home will appreciate in value; however, residential real estate has historically proven to be an excellent long-term investment. Keep these strategies in mind to choose a home that will pay off over the years:

1. Purchase a home in a well-established neighborhod with good schools, a low crime rate, and easy access to transportation and attractive shopping areas.

2. Purchase an undervalued home, or one that is unpopular at the moment due to its arcitectural style or specific location within the well-established neighborhood.

3. Avoid over-paying for a home just because it has a strong emotional appeal to you. Paying too much in the first place means your home will be worth less than you paid for it on the day you move in. *An SRES Article

Should I pay cash for my next home
or obtain a mortgage?*
If you're buying a home in an unfamiliar area, you should probably take advantage of the financial leverage of a mortgage. That way, you can check out the area more thoroughly before tying up a lot of cash in your home. Leverage is important because if you bought a home for $250,000, for example, and made a down payment of only $50,000 or $60,000, you wouldn't have all your cash tied up in the home. Mortgage payments would have to be made for a while, but if you didn't enjoy the area and wanted to move, cash would still be available for that purpose. Of course, if you decided to stay put, you could pay off the mortgage. (Make sure the mortgage doesn't contain a pre-payment penalty, so you'll be able to pay it off in full at any time.)

Another option is to bundle a reverse mortgage, which pays the home owner a portion of the equity in cash every month, into home home purchase mortgage. An organization called Reverse Mortgage of America can provide additional information about these financial products. With a reverse mortgage, you can buy a home for all cash, then get the cash back in a lump sum or gradually over a period of many years. It's less expensive to obtain a reverse mortgage first, then add a reserve mortgage sometime later. This strategy is a positive way to buy a home outright but still produce bundling cash flow. *An SRES Article

Please return frequently as many more Seniors questions will be added.



Home Search | Buying | Selling | Falmouth | General Info 
For Seniors | About Us | Home

COPYRIGHT © 2007 BY DAVID F. KELLEY. ALL RIGHTS RESERVED

<