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6 Ways to Retire Without a Mortgage

Admit it: Whether you're 35 or 65, the prospect of retiring without a mortgage is an attractive one. No more monthly mortgage payments to your home lender means extra money to spend on having fun in retirement. After years of punctual principal-and-interest mortgage payments, it's the least you deserve, right? There are several smart ways to retire without a mortgage. We've come up with six that fit a variety of retirement scenarios. Some approaches benefit from an early start, so plan as far ahead as you can. Other mortgage-free retirement options can be pursued even if you're close to signing up for Medicare and Social Security. Some retirees don't mind a mortgage, be it for the tax write-offs or to prevent too much money being tied up in home equity. But if your goal is the peace of mind that comes with paying off your home loan before you reach retirement, check out these six ways to retire without a mortgage.

Arizona housing market prices are rising, but still not recovered from recession – Phoenix...

As the nation’s housing market prices recover to pre-recession levels, homes in the Arizona market are still on average worth 16 percent lower than they were almost 12 years ago. Those findings come from a report by CoreLogic looking at state by state and national market recovery. Tina Tamboer, an analyst for the Cromford Report, said current Arizona market conditions are favorable and nothing to worry about.. U.S. housing prices are 1 percent above the 2006 peak. Arizona has seen a 70 percent increase from its trough point but, the market is still 16 percent lower than its peak prices. She said most Phoenix-area markets are currently around 20 percent below peak prices. She said locally, median house prices at the end of last year were around $245,000. She added these are likely to be competitive and get several offers. For buyers with prices rising she cautioned that holding off will likely lead to getting a smaller house for your money. Each year a buyer holds off with current rates they could be losing 50 square feet for the same price.

Want to buy a new home? Builders want to help

And a supply shortage can make it hard to find homes for sale within your budget. Experts say this news should make home shoppers, who seek positive signs in the real estate market, feel more confident. In January, the number of new construction housing units increased to an annual rate of 1.326 million. But the growth rates will be modest.” Homes are still affordable, despite the ending of historically low-interest rates and increasing prices. The illustration below shows the difference between buying a home today at 4.5 percent (with 20 percent down) and buying a home in 1981 at 18.75 percent with 20 percent down. So the median-priced home today is much more affordable than it was in 1981. Dietz says the NAHB is expecting around a 5 percent increase in single-family home construction in 2018. “And we can expect builders to build as much as possible as soon as possible.” Ailion explains that, for years, builders have focused on constructing higher-priced new homes. Home affordability calculator “Rising demand and low supply resulted in home prices rising 41 percent over the past five years. That’s up from eight percent a year earlier, per Dietz.

Your mortgage application may trigger competitors to tempt you with other offers

You’ve probably never heard of a “mortgage trigger lead.” But as a consumer, you might be shocked to learn that in an era of massive data breaches and hacks — witness the Equifax debacle — they even exist. So what’s a trigger lead? When you apply for a home mortgage or a preapproval, the loan officer pulls information about you from the national credit bureaus. This allows those competitors to contact you and solicit your business before you get locked in to the lender to whom you’ve applied. “They don’t know whether to believe” what the caller is offering them, and they frequently are misled. The caller “misrepresents who he is, where he is calling from and even the purpose of the call,” Meridian said. The credit bureaus aggressively market trigger leads online to lenders and third-party brokers. Eric J. Ellman, senior vice president for public policy and legal affairs for the Consumer Data Industry Association, which represents the credit bureaus, told me that “mortgage trigger leads are a valuable tool” that can help “consumers save money,” especially those “who might not be as savvy a shopper” as others. These protections already exist, according to Ellman: federal and state laws on unfair and deceptive trade practices that make it illegal for marketers to “lie, cheat or steal” or to charge usurious interest rates. Consumers who feel misled by marketers using trigger leads can file complaints with their state attorney general or the Consumer Financial Protection Bureau, he said.

Is Condo Living Right for You?

You don’t have to deal with the maintenance and you have less space to worry about inside. Shared costs – Again, because you only own the interior of your unit, the cost of certain repairs, such as the roof, get shared with the other owners. The association, if run right, will keep reserves on hand for times like repairing the roof or other major repairs. Make sure you get to know these rules very well before deciding to buy the condo. Homeowner’s association dues – In addition to your mortgage payment, real estate taxes, and insurance, you’ll have to pay HOA dues. Depending on the development, they could get rather costly. Make sure you know the full cost of the HOA dues and how often the association may raise them. So is condo living for you? If you are the type of person that loves to socialize, doesn’t mind a little less privacy, and would use the amenities, it may be the perfect place to live. If, however, you are a very private person, don’t want any extra monthly dues, and don’t use amenities, such as a pool or fitness area, it may not the right choice.

Rising real estate values power new interest in jumbo loans

2018 conforming loan limits jump by nearly $30,000 Property prices in many areas exceed so-called "conforming" loan limits -- the maximum mortgage amount allowed by Fannie Mae and Freddie Mac. The single-family limit is now $453,100 in most of the U.S. and as much as $679,650 in “high-cost” markets. How do you finance a home if the value is well above the conforming loan limits? Most mortgages today are QMs, and this is important for jumbo borrowers. Qualified jumbo mortgages: they're out there Under the rules, FHA, VA, and conforming loans are automatically Qualified Mortgages. With portfolio loans, lenders can originate jumbo QM mortgages, because there is no QM loan limit. Non-QM jumbo loans Not only can borrowers get jumbo QM loans; they can also get non-QM jumbo loans. For example, non-QM loans allow: Debt-to-income ratios higher than the 43 percent limit required for most QM mortgages Interest-only financing A 40-year term Millions of dollars Non-occupant co-borrowers Bank statement loan applications Alternatives for proving income Low credit scores Financing immediately after a foreclosure or bankruptcy Jumbo loans & taxes Under tax reform, the government has enacted new policies that will impact mortgage borrowers. The most important issues look like this: First, mortgage interest when you buy a home is deductible -- up to $750,000 for personal real estate. Jumbo mortgage rates The difference, or spread, between jumbo and conforming mortgage rates rises and falls, depending on markets.

Zero-down mortgages can come with a high price, experts say

Guess what’s in vogue again? Mortgage deals that require zero or little down. Before you get excited, better give this idea a deep dive. Not having this obligation also likely means you’ll have cash on hand for other expenses,” says Max Soni, CEO of Delancey Street, a Manhattan company that provides residential, commercial and other loans. The cons: But those perks may come at too high a price. Often, many private lenders say zero-down, but actually, they charge additional fees, or higher interest rates which are added into your monthly payment, points out Soni. One way you’re certain to pay more: A premium for private mortgage insurance will be added to your monthly payment. Generally, lenders require this type of insurance if you’re not putting at least 20 percent down, says Ogechi Igbokwe, a certified financial planner with OneSavvyDollar.com in Eastport. That’s because you’re considered a higher risk, and PMI protects the lender — not you — if you stop making payments on your loan. Remember, the higher your down payment, the lower your monthly payment and interest rate will be, and the sooner you’ll accumulate the 20 percent equity you need to stop paying PMI premiums, says Tim Manni, a home expert at NerdWallet.com.

Philadelphia considering new law designed to limit reverse mortgage foreclosures

The city of Philadelphia is set to consider new legislation that would “prevent the spread of reverse mortgage foreclosures” in the city by “closing a loophole” in the city’s laws that some lenders allegedly exploit to foreclose on reverse mortgage borrowers. The bill, introduced this week by Philadelphia City Councilwoman Cherelle Parker, stipulates that a reverse mortgage borrower who is in a payment agreement for real estate taxes on their home cannot be considered delinquent on those real estate taxes. A reverse mortgage allows a homeowner, age 62 or older, to access the equity in their home via a loan, which does not need to be repaid until the last borrower dies or moves from the home. During that period, the borrowers are required to live in the home, maintain the home, and pay their real estate taxes and homeowner’s insurance. In a statement, Parker said that reverse mortgages have been a “scourge” in some of the city’s neighborhoods thanks to the “unscrupulous practices” of some lenders. “I know all too well the scourge that reverse mortgages have been on certain neighborhoods in the city. Unfortunately, it has been quite common for reverse mortgage lenders to swoop in and pay off any remaining real estate tax balance of homeowners even if they are in a payment plan and not delinquent, and then use this as an impetus to foreclose on these homeowners,” Parker said. “It is my hope that these new regulations and my accompanying legislation will protect homeowners by finally putting an end to some of the more unscrupulous practices we have seen from reverse mortgage lenders,” Parker added. The rule would match new Philadelphia Department of Revenue regulations that took effect recently. “I want to thank housing advocates, such as Community Legal Services, for first raising this issue, and commend Revenue Commissioner Frank Breslin and his team for changing the regulations,” Parker concluded.

California Housing Revolution?

Introduced by Scott Wiener, a Harvard-educated attorney and state senator, SB 827 would effectively abolish zoning restrictions in Wiener’s district of San Francisco and for significant portions of the state’s most populous areas—and likely produce a boom in new housing construction. So-called transit-rich zones would see local height limits lifted to anywhere from 45 feet to 85 feet—roughly from four to eight stories—depending on factors such as street width and station proximity. Cities could build taller, but they could not require that buildings be shorter. A majority of these rent-squeezed households—some 3.7 million—are in Los Angeles and the Bay Area. “We under-produce by about 100,000 housing units every year, and we have a housing debt that’s growing,” Wiener says. The most feasible way to pay off that housing debt, he believes, is to let developers build more units in concentrated areas. Another bill placed a measure on the 2018 ballot directing nearly $1 billion a year to subsidize new low-income housing. The ideal scenario for lowering the barriers to housing density near transit is to get more with less: more housing and affordability with less displacement and sprawl. In San Francisco, some 70 percent support building more housing to alleviate cost burdens. Wiener’s proposal is more aggressive: it would immediately up-zone nearly all of San Francisco, as well as South Los Angeles’s sprawling landscape of single-family homes.

The Problem With Real Estate Agents

What makes the profession such a big target for headlines, reality TV and venture capitalists? Let’s start with how the real estate industry has put a target on its own back. The 90/10 rule is true in this profession, and in my observation: 10% of real estate agents do 90% of the business. In order to protect the public, a licensed broker is required to hold the license of the salesperson and supervise them for at least three years before they can become a broker themselves. Uncle Bob ends up doing all the work and feels like Stan left him in the lurch. At closing, when he sees the commission that will be paid to Stan, he is furious — Stan didn’t earn that! Now the holidays are awkward anyway, Uncle Bob thinks all real estate agents are chumps and, in the end, Stan lets his license lapse and gets out of the business. The majority of the licensed agents a typical consumer knows are non-practicing. And so, our industry gets downgraded from a respectable profession to a pastime. Mentor and train the agents who are serious, and dump the agents who are not.


Does affordability matter: Why delinquent mortgages more common in ‘most affordable’...

Why do the states with housing’s highest “affordability” measurements — much-discussed but perhaps dubious economic yardsticks — have more borrowers who can’t make their mortgage payments? The state’s home listings are priced at 55 percent of normal “affordability,” according to one housing-cost index from the National Association of Realtors. That ranks next to last nationally. I loaded my trusty spreadsheet with various economic and housing markers — plus the recent ranking of state rankings I compiled — to ponder how housing “affordability” translated to other measurements of life. Now to be fair to those “affordable” states, homeownership (tracked by the US Census Bureau) paralleled affordability: averaging 69 percent for states with the highest Realtor grades vs. 63 percent for the least affordable. The same hiring spree that put them in a home-buying mood also makes housing costlier to buy. A broad-based cost-of-living scorecard from the state of Missouri gave most “most affordable” states an average No. 37 for least affordable. 37 for least affordable. And it’s not a small gap: thin 0.2 percent population growth for “most affordable” states in 2018 vs. swifter 1 percent for the pricier locales.