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Tips for Upsizing Retirees

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | November 8th, 2017

Just days after retiring, a couple in their mid-60s sold the 1,200-square-foot Cape Cod where they’d raised their daughter. But rather than step down to a condo, they shocked friends by upsizing to a 1,700-square-foot house. Even that felt cramped, so they sold again to buy a 2,100-square-foot Tudor with soaring ceilings, a huge country kitchen and a triple garage.

“No matter their age, some people just hate the idea of living in a condo. In retirement, these people want to stretch out, take up hobbies like gardening and do the gourmet cooking they lacked time for while working,” says Ashley Richardson, the real estate agent who represented the couple.

As this true story illustrates, some retirees have both the desire and resources to scale up to a more expensive property.

The retirees with whom she worked -- who chose their current house near their grown daughter’s place -- are delighted they now have enough space in their Tudor to host regular Sunday evening dinners for their extended family, which now includes a great-granddaughter.

“Soon, they plan to start babysitting the newest addition to their family,” Richardson says.

Sid Davis, a real estate broker and author of “A Survival Guide for Buying a Home,” says many seniors who decide to upsize consider themselves “professional grandparents.” Many also relish more time to pursue hobbies, including do-it-yourself home improvement.

Here are a few pointers for retirees who plan to upsize:

-- Buy the sort of place that appeals to your family.

If the vision of a family mecca appeals to you, Davis says you’ll want a place that’s convenient for as many family members as possible.

“Take stock of your family and their future work plans,” he says.

If your children's work situations are highly mobile or unstable, you may want to delay a move until they settle down more permanently, Davis says.

“You can’t chase your adult children all around America and the world. Better to pick a spot that’s easily accessible for them to travel to you,” Davis says.

-- Choose a setting that will attract family visits.

Perhaps you and your spouse would like to move to an age-restricted community. Yet you’d also like to see your kids and grandkids as frequently as possible. If so, you could well think twice about this plan.

“Truth is, the children aren’t going to find a whole lot of fun things to do in a retirement community. Rather than moving in with other seniors, pick a multi-generational area with more recreational attractions for the kids,” Davis says.

He suggests you consider buying a house near a neighborhood swimming pool, in an area where lots of young families live. You might also look for an area well suited to fishing, horseback riding or hiking.

“Quiz the kids on the kinds of activities they really enjoy. Also, don’t forget to ask the teenagers what they think,” he says.

-- Pick a property with the right features for overnight family visits.

Do you intend to upsize to a location that will draw family members for extended stays? If so, you’ll want the right home features to accommodate everyone who comes by.

“Look for a house with at least three bedrooms and, even more important, as many bathrooms as possible. The kids can always double up in the bedrooms. But if you have only one bathroom, you’re bound to have bottlenecks,” Davis says.

Also, he recommends that those seeking to create a family hub look for large common areas in their upsized property.

“People love to hang out in a big kitchen with places to sit and talk. That’s why upsizers often go for a large eat-in kitchen connected to an even larger ‘great room.’ This is often great for retirees who love family gatherings,” Davis says.

-- Factor in the realistic need for good airport access.

Do you yearn to retire to a faraway place with a better climate and yet still wish to see extended family as often as possible? If so, Davis says you’d be well advised to upsize to an area with good transportation access.

“Move to some remote region and it will be a lot more costly and inconvenient for your kids and grandkids to visit. Instead, look for an area served by an excellent airport. Search for an airport that serves as a hub for at least one airline with lots of service and decent fares,” he says.

Granted, you won’t want to live so close to an airport that you’ll be tormented by the noise of planes flying overhead. But you’ll want to be close enough to the airport that family visits aren’t too taxing.

“If you’re counting on air travel for family get-togethers, try to live within a 90-minute drive from a good airport,” Davis says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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Tips For Buyers With Small Children

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | November 1st, 2017

Homebuyers who grew up with a sizable backyard typically envision their kids also frolicking in open space. But there are increasing barriers to this idealized vision, says Felipe Chacon, an economist for Trulia, which tracks real estate markets throughout the country.

“America’s homes are getting bigger. But more space comes at a price: the backyard,” say Chacon, who recently completed a comprehensive report on the topic.

He says the trend toward homes with bigger footprints is continuing to accelerate.

“Homes built since 2015 occupy 25 percent of the land on which they sit, while homes built in 1975 occupy just 13.9 percent,” Chacon says.

Of course, some affluent buyers can afford to live in a close-in community with both a big house and a big yard. To accomplish this goal, well-to-do purchasers in some white-hot neighborhoods are buying a modest house on a large lot and then tearing down the building to make room for a larger, custom-built house.

“The trend toward tear-downs is happening in popular areas all over the country,” Chacon says.

Here are a few suggestions for buyers with young children:

-- Ponder the question of how much yard space you truly need.

Yard-wise, what may have worked for you growing up isn’t necessarily best for your kids, says Eric Tyson, a consumer advocate and co-author of “Home Buying For Dummies.”

“Children are much more programmed than they used to be. Many are involved in lots of scheduled activities -- from piano lessons to sports teams. There’s less spontaneous play,” he says.

Rather than focusing heavily on yard size, Tyson suggests you consider the outdoor features of a neighborhood you’re considering, including parkland and bike paths.

As Tyson says, neighborhoods where yards are smaller are often more family-friendly.

“Kids can be closer to their neighborhood friends. They don’t have to be driven around to see their playmates,” he says.

-- Realize you can often get more floor space in a two-story home.

Many home shoppers are looking for a single-level ranch-style house. Those who’ve hit middle-age or beyond are especially likely to prefer a one-story house, which doesn’t require them to scale stairs.

But people with school-age children should consider the advantages of living on two levels, Tyson says. That’s because it’s easier to contain the noise and mess of growing children if their bedrooms are separated from the common living space of the family.

With a two-story house, parents can entertain guests on the first floor while their kids are playing or sleeping upstairs. Also, young families can typically get more space for the money in a two-story house.

-- Find a floor plan that functions well for your family.

Tyson says it’s more important for families with young children to have a floor plan that encourages togetherness than a large home.

“You probably won’t use a formal dining room, except on Thanksgiving. You’ll find more use for an inviting, good-sized family room,” he says.

Large, comfortable common rooms help draw children out of their bedrooms.

“You don’t want your young kids holed up in their rooms, spending too much time playing computer games,” Tyson says.

-- Seek to buy as many bedrooms as you can afford.

Brand-new houses with lots of square footage typically feature spacious master bedroom suites. Secondary bedrooms, designed for children or guests, are also very large, often with their own walk-in closets or even private bathrooms.

But Tyson insists it’s more important for families to have an adequate number of bedrooms than to have large bedrooms or a sumptuous master suite.

“Families with enough bedrooms can give siblings with different school schedules their own rooms. That’s an ideal way to help ensure that all the kids get enough sleep,” he says.

-- Don’t choose a neighborhood based on school test scores alone.

Though it’s now easy to compare schools on the basis of standardized test scores, there are many other factors to consider as well, says William Bainbridge, who founded the SchoolMatch Institute, a research organization focused on comparative school quality.

When matching up neighborhoods, Bainbridge urges parents to take the time to visit schools and pose questions to teachers and administrators. By doing so, they’ll get a feel for the culture of each school and whether its employees support and encourage the students who attend.

“You wouldn’t want your kids taught in a prisonlike environment -- even if the test scores at that school are excellent,” he says.

Bainbridge also urges parents to look into public education alternatives -- such as charter schools.

“School choice means more people can obtain a quality education for their kids without moving to the highest-income areas,” he says.

-- Make sure the adults in the family make the final housing decisions.

Not infrequently, school-age children will mount a protest against any housing move their parents plan because, as Tyson says, “children like constancy.”

To appease unhappy offspring, some parents let their kids cajole them into the wrong property. But Tyson says children usually adapt quickly to a move and it’s unwise to let their feelings dominate your plans.

“Buying a house is a massive financial decision. Only the parents can plot the most prudent choice,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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Cash-out Refi Tips

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | October 25th, 2017

Much of the demand for mortgage refinancing has dropped off in recent months as rates have trended slightly higher. But one refi category that lets homeowners draw on their equity remains relatively strong.

“Many owners have built up a lot of equity in the last five years and now they want to leverage that equity,” says Daren Blomquist, a senior vice president at Attom Data Solutions (attomdata.com), which tracks real estate markets throughout the country.

Though few owners are refinancing to trade one mortgage for another at a lower interest rate, because they probably already have a low rate, more are doing a refi to liberate funds for other purposes.

“One major reason for a ‘cash out’ refi is to access funds for remodeling,” according to Blomquist. He notes that an increasing number of baby boomers wish to “age in place” rather than downsize to another property. But that often means costly renovations, like adding a first-floor master suite to a two-story house.

Besides those who want to refinance to remodel, many older owners are refinancing (or tapping equity through a home equity line of credit) to help grandchildren with college expenses. Others tap equity for travel or for money to buy an income-producing rental property.

In most ways, applying for a cash-out refi is no different than applying for a plain vanilla refi or a mortgage to purchase a home. Here are a few pointers:

-- Update yourself on mortgage basics before you apply.

Many older mortgage applicants need a refresher on mortgages. Because they’re rusty on the topic, they hesitate to ask questions, says Sid Davis, the author of several books on real estate.

But as Davis says, the main concepts of mortgage lending aren’t hard to grasp if you take a little time to do so. You can do a quick study of mortgage essentials by visiting the website of the U.S. Department of Housing and Urban Development (hud.gov).

In addition, he suggests you pick up a book on mortgages, though anything published on the topic more than a year or two ago is likely out of date.

“When it comes to mortgages, the turf is changing so quickly,” he says.

-- Look for a lender who will meet you face-to-face.

Most lenders are entirely comfortable taking refi applications from homeowners they’ve never met. On a technical level, there’s no reason your lender can’t process your application by phone, text, email, fax or overnight delivery, says Marty Qualls, who makes mortgages for several large banks.

“But you’ll have a lot more credibility with your lender if you go into his office,” says Qualls, who’s been in the mortgage business since 1992.

Meeting face-to-face is an especially good idea for borrowers who anticipate special challenges to loan approval. Such applicants include the self-employed, those with credit blemishes and those with relatively limited assets -- like small savings accounts.

Qualls acknowledges that many lenders favor the efficiency of handling nearly all their business remotely. Still, he says they often give preferential treatment to those who take the time to visit their office.

“An in-person application could even mean you get a slightly better mortgage rate,” he says.

-- Reply promptly to your lender’s request for documents.

Dale Robyn Siegel, an attorney and mortgage broker, says that compared with the pre-recessionary period, mortgage officers must now work more diligently than before to assemble the files they need to meet the exacting requirements of their underwriters (who have the final say on mortgage approval). Hence, they’re grateful to applicants who help them obtain documents without nagging.

“Good preparation is a big plus,” says Siegel, author of “The New Rules for Mortgages.”

Ideal loan applicants arrive at their initial appointment with all the primary documents they’ll need -- including recent pay stubs, W-2s and bank statements.

Mortgage officers are also pleased when loan applicants review their credit reports in advance of applying. Under federal law, you're entitled each year to one free credit report from the three large credit bureaus: Equifax, Experian and TransUnion. Just go to this website: annualcreditreport.com.

You may also want to access your credit scores. Such scores -- which draw on data from the credit bureaus--provide lenders with a quantitative measure of a person's credit risk. Most lenders use FICO scores, pioneered by the Fair Isaac Corp, though other rival scores are also now in use.

Usually you need to pay a fee to obtain your credit scores. One approach is to buy these through the Fair Isaac website: myfico.com. You can also receive credit scores through the credit bureaus. FICO scores range from 300 to 850.

-- Remain in close touch with your lender until the deal is done.

Given recent problems with credit that have exposed record numbers of consumers to potential identity theft, some refi applicants are now facing more complications than before to get loan approval.

Davis says lenders appreciate applicants who reply promptly to their requests for information and communicate often while their applications are under review.

“Whether you stay in touch by text, phone or email, connecting with your lender nearly every day is a great idea,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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