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    <title>Using your home equity</title>
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    <link>http://www.emjcd.com/click-1762781-10499358?url=www.lendingtree.com/smartborrower/Seniors/Using-your-home-equity.aspx</link>
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    <lastBuildDate>Thu, 28 Aug 2008 16:33:42 EST</lastBuildDate>
    <copyright>Copyright: (C) LendingTree, LLC</copyright>
    <item>
      <title>Giving your kids a start with a home equity loan</title>
      <description>Drawing on your home's equity can be a great way to give your kids a financial boost. But don't forget your own future needs.</description>
      <link>http://www.emjcd.com/click-1762781-10499358?url=www.lendingtree.com/smartborrower/Using-your-home-equity/Giving-your-kids-a-start-with-a-home-equity-loan.aspx</link>
      <pubDate>Mon, 7 Jan 2008 10:30:01 EST</pubDate>
      <category>Using your home equity</category>
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Giving your kids a start with a home equity loan
Drawing on your home's equity can be a great way to give your kids a financial boost. But don't forget your own future needs.
<p>Your child got into the college of her dreams, complete with a great dorm room. But how is her college education experience treating you? The cost of sending a child to school can be an overwhelming burden to the parents' finances. If you're a homeowner, dipping into the equity you amassed in your home while your kids were growing up might be the ticket for covering the high cost of education. Or maybe you'd just like to give your adult kids a leg-up, with a down-payment check for their first home. <br />
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<strong>What is a home equity loan?</strong> <br />
Equity is the difference between your home's appraised -- or fair market -- value and your outstanding mortgage balance (if any). A home equity loan allows you to borrow up to 80 percent of the value of your home, less existing mortgages. <br />
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<strong>Why it's worth considering</strong> <br />
There are many reasons using home equity loans make sense to help your child move on to the next stage of his or her life. For one, they're often a more attractive option than selling investments. Going that route sacrifices any future return on your investments and could result in a hefty capital gains tax bill. <br />
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Home equity financing also makes more sense than cashing in your retirement funds. You may be charged a higher rate of interest to borrow against your retirement and also may be required to pay a penalty. And don't forget the income tax you'll have to pay on the withdrawals. <br />
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Since home equity loans or lines of credit are secured against the value of your home, they usually have lower interest rates than unsecured loans. <br />
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In addition, the interest you do pay may be tax-deductible (up to $100,000), though you should consult a tax advisor about your situation. <br />
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Mortgage rates are still low enough that taking on more house debt is not as onerous as it once was. On average, house values have climbed consistently over the past several years, indicating a reasonable expected return. <br />
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<strong>Tread carefully</strong> <br />
Take care to have thought out your decision thoroughly before venturing into this territory. As accessible and attractive as this ready source of funds seems, there's still risk involved. If you've reached the life stage where you're considering giving your kids a financial boost, you've also reached the one where the necessity of retirement planning starts to loom. By putting more debt on your paid-off or soon-to-be-paid-off home, you risk sabotaging your own retirement nest egg. </p>
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      <title>Downsizing or using home equity for retirement</title>
      <description>There are many ways to use the value you've built up in your home to improve your finances during retirement.</description>
      <link>http://www.emjcd.com/click-1762781-10499358?url=www.lendingtree.com/smartborrower/Mortgages/Downsizing-or-using-home-equity-for-retirement.aspx</link>
      <pubDate>Wed, 25 Oct 2006 10:30:32 EST</pubDate>
      <category>Using your home equity</category>
      <guid>http://www.emjcd.com/click-1762781-10499358?url=www.lendingtree.com/smartborrower/Mortgages/Downsizing-or-using-home-equity-for-retirement.aspx</guid>
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Downsizing or using home equity for retirement
There are many ways to use the value you've built up in your home to improve your finances during retirement.
<p>If your children are out of the house and you've reached, or are approaching, retirement age, you may need to reassess your finances, especially when it comes to your home. Here are a few ideas to consider: <br />
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<strong>Downsizing your home <br />
</strong>It's easy to grow attached to a home you have lived in for years, especially if it's where your children grew up or you've put a lot of work into it. But it can be quite tiring to maintain a large home that only you or your spouse are living in. If you are not using the space in your home and you are struggling with household chores and monthly payments, you might want to consider downsizing to a smaller home at a more affordable price. A smaller home will be easier to maintain and you can use the profit you make to help fund your retirement. <br />
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<strong>Using your home equity</strong> <br />
If you are in retired, you may find that even though you don't have a considerable income, you live in a valuable home. This means that your home may be one of your most important financial resources and you may want to tap into some of that home equity. Talk to a financial advisor for advice on various options that could benefit your particular situation. <br />
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<strong>Taking out a reverse mortgage</strong> <br />
A reverse mortgage lets you turn some of the equity you have in your home into cash. Instead of borrowing money and repaying it to a lender, as with a standard mortgage, you receive payments from a lender. If you decide to sell your home, then you must repay the loan; otherwise you can remain in your home during your lifetime and your estate will pay it back after you die. Getting a reverse mortgage does carry some costs, however, so it's wise to consult a financial planner to help you decide if it is the right move for you. </p>
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      <title>A less expensive vacation home</title>
      <description>House-swapping clubs could be your ticket to a bargain holiday in a home-away-from-home.</description>
      <link>http://www.emjcd.com/click-1762781-10499358?url=www.lendingtree.com/smartborrower/Smarter-spending/A-less-expensive-vacation-home.aspx</link>
      <pubDate>Tue, 29 Aug 2006 12:44:00 EST</pubDate>
      <category>Using your home equity</category>
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A less expensive vacation home
House-swapping clubs could be your ticket to a bargain holiday in a home-away-from-home.
<p>Want to live in a rent-free "home away from home" on your next vacation? A house-swapping club might be just the ticket for you. <br />
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<strong>Membership in a house-swapping club allows you to live in someone else's home, free of charge, for a pre-agreed period of time. </strong>In exchange, that person, or a third party who also belongs to the club, lives in your home rent-free while you're away. <br />
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House-swapping clubs began about 50 years ago. At that time, membership was limited to a few hundred people around the world, who listed their homes in books. Today, more than 250,000 people from all over the globe swap homes each year through on-line clubs such as homeexchange.com and homelink.org. <br />
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Club members enjoy enormous choice of where to go, as well as free, comfortable accommodations where they can settle in for a few weeks, buy groceries and cook for themselves, and even entertain visitors from back home. Seattle resident Hanni recently listed his home with homeexchange.com. He got four offers for swaps in five days: one was a castle in south Germany; another was an apartment near Central Park in Manhattan; a third was a home in Wiesbaden, Germany; and the fourth was an ocean-view home in Brittany. He didn't know what to choose. <br />
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<strong>How to start <br />
</strong>Most online house-swapping clubs allow you to look at listings of available homes, and even contact homeowners, for free. <strong>If you decide to join, membership fees range from $30 to $70 annually</strong>. Membership allows you to list a description of your home's features and the dates it is available while you browse other listings by location, availability and size. <br />
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When you find a place you like, you contact the homeowner directly and arrange the dates and times when you will exchange homes. You can even arrange three-way swaps, for greater flexibility. <br />
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<strong>What you get</strong> <br />
<strong>In addition to savings on accommodations and food, you may be able to swap cars and save hundreds of dollars in rental fees</strong>. Before making arrangements to use your host's car, make sure you have the proper insurance in place. <br />
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Swapping is particularly appealing to families on the go. "We just returned from a great five-week holiday in Great Britain where we did two separate exchanges," reports Tristen T. on homelink.org. "Both families and houses were terrific and it is definitely the only way to go with kids in tow." <br />
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You also get a different perspective than you do staying in a hotel in a tourist area. Ask your "host" to recommend places to visit, restaurants to try and sights to see. <br />
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<strong>If you swap</strong> <br />
Here are some pointers for arranging a successful swap: </p>
<ul>
    <li>Make sure that the home you're swapping for suits your needs. It should have enough bedrooms to accommodate your family, for example, and be within a reasonable distance of sites you want to visit. </li>
    <li>Get an international driver's license and familiarize yourself with the rules of the road in your destination country so you can swap cars. </li>
    <li>Ask for a reference from the member with whom you are considering swapping, and check it out. </li>
    <li>Write up all the details of the exchange in an agreement, which you and the member(s) you're swapping with sign. </li>
    <li>Make sure your insurance covers any damage to your home by visitors while you are away. </li>
</ul>
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      <title>Reverse mortgages</title>
      <description>If you are 62 or older and short of cash, a reverse mortgage can help you stay in your home and meet your expenses.</description>
      <link>http://www.emjcd.com/click-1762781-10499358?url=www.lendingtree.com/smartborrower/Using-your-home-equity/Reverse-mortgages.aspx</link>
      <pubDate>Mon, 21 Aug 2006 12:24:00 EST</pubDate>
      <category>Using your home equity</category>
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Reverse mortgages
If you are 62 or older and short of cash, a reverse mortgage can help you stay in your home and meet your expenses.
<p>How can you get cash out of your home? One way is to sell - but then you have to move. Another is to take out a home equity loan. But you'll have to pay it back. <br />
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The third option-for those 62 and older, at least-is a reverse mortgage, which requires neither a move nor loan payments. Reverse mortgages are gaining in popularity, but are not well understood. They are like conventional mortgages turned upside-down, and the concept is a little difficult at first. <br />
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Both conventional and reverse mortgages create debt against your home. But they're distinct for a couple of important reasons. A conventional mortgage is a falling-debt, rising-equity transaction. Reverse mortgages are based on a rising-debt, falling-equity model. <br />
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With a reverse mortgage, the lender sends you cash and you make no repayments, so your debt increases and your equity shrinks. When a reverse mortgage becomes due and payable, all of your home's value will have been turned into loan advances, loan costs or leftover equity. <br />
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While that notion might seem alarming, remember that's precisely what reverse mortgage borrowers are after: the ability to "spend down" their home equity while they live in their homes, without having to make monthly loan repayments. <br />
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A reverse mortgage comes due and must be repaid when you die, permanently move out (to live with a family member or to a nursing home in most cases) or sell. Otherwise, you're free to stay in your home as long as you wish. If you pass on, your heirs can pay the loan back, with interest, and keep your home. Alternatively, they can sell it to a third party and repay the lender out of the proceeds (any excess goes into your estate). <br />
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You don't need a minimum income to qualify. You could have no income or even still owe money on a conventional mortgage. In fact, some seniors get reverse mortgages to pay off a first mortgage. <br />
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The only eligibility requirements are that you are at least 62 years of age and treat your home as a principal residence. (If you own your property jointly, the other owner(s) must sign on to the loan, too.) <br />
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<strong>How much can you get? <br />
</strong>The amount of cash you can receive from a reverse mortgage generally depends on: </p>
<ul>
    <li>the specific reverse mortgage plan or program you select </li>
    <li>your age </li>
    <li>your home's appraised value </li>
    <li>interest rates and closing costs on local home loans </li>
    <li>other costs of the loan </li>
</ul>
<p>You can take receipt of the loan in whatever fashion you choose, including a one-time lump sum, a line of credit, fixed monthly payments for a predetermined period of time or a combination of the above. <br />
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Reverse mortgages are offered by banks, mortgage companies, savings associations and state and local governments. The funds from private-sector loans can be used for any purpose. Government loan programs generally limit spending options to specific purposes, such as home repairs or property taxes. Many public-sector loan programs are only available to homeowners with low or moderate incomes. <br />
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<strong>Private reverse mortgages are subject to a variety of costs</strong>. They may include: </p>
<ul>
    <li>an application fee </li>
    <li>an origination fee </li>
    <li>closing costs </li>
    <li>insurance </li>
    <li>a monthly servicing fee </li>
</ul>
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      <title>Should you downsize your home?</title>
      <description>There are pros and cons to downsizing. Consider your finances and lifestyle before making a decision.</description>
      <link>http://www.emjcd.com/click-1762781-10499358?url=www.lendingtree.com/smartborrower/Finding-the-right-home/Should-you-downsize-your-home.aspx</link>
      <pubDate>Fri, 18 Aug 2006 03:59:00 EST</pubDate>
      <category>Using your home equity</category>
      <guid>http://www.emjcd.com/click-1762781-10499358?url=www.lendingtree.com/smartborrower/Finding-the-right-home/Should-you-downsize-your-home.aspx</guid>
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Should you downsize your home?
There are pros and cons to downsizing. Consider your finances and lifestyle before making a decision.
<p>The kids will soon be off to college and out of your home. Should you run out and sell your house? It's not a simple decision. <br />
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<strong>Factors that may encourage you to stay include: </strong></p>
<ul>
    <li>Do you want a place for your children and grandchildren to stay when they visit? </li>
    <li>Are you emotionally ready to leave? </li>
</ul>
<p><strong>Factors that may encourage you to downsize include: </strong></p>
<ul>
    <li>Do you need a smaller home because of financial reasons or other circumstances? </li>
    <li>Would you be better off if you saved money on your mortgage payments, or do you need the profits from selling your house to live on? </li>
    <li>Do you need to move to be close to a spouse who is in a nursing home? </li>
    <li>Can you and your spouse still climb the stairs every day to an upstairs bedroom? </li>
</ul>
<p><strong>Make sure it's affordable </strong><br />
If you decide to downsize, make sure the place fits both your pocketbook and your lifestyle. <br />
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Ask a REALTOR® how much he or she will charge to sell your house. Then determine how much you will end up with from the sale. Under current tax rules, up to $500,000 (if you are married and file jointly) in profits from the sale of your principal residence are not taxable as long as you've lived there for at least two of the previous five years. Up to $250,000 in profits are not taxable if you're single. Consult a tax advisor to discuss your situation. <br />
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Look into how much it would cost to move and to maintain a smaller home. Make sure it really is cheaper to live there. <br />
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Decide to downsize only once you're satisfied that the finances make sense. <br />
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<strong>Buy into your new lifestyle <br />
</strong>A smaller house in your current neighborhood could be the right decision if your priority is maintaining close ties to neighbors. Just make sure there are amenities like public transportation and stores nearby if your health begins to deteriorate. <br />
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A condominium or a unit in a retirement community could be perfect if you never want to mow again, or if you want to focus on travel, hobbies and perfecting your golf stroke in the company of other seniors. Just remember you'll have to pay maintenance fees for the upkeep of the common areas. Talk to current residents to see whether they're happy with the way things are run. Also investigate the rules. If the association forbids pets and you're a devoted dog-owner, be prepared to move on. <br />
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You may prefer to purchase a duplex or something similar. Renting one of the units will bring in extra income, and you'll have built-in neighbors. <br />
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If you're adventurous, you may even opt to move to another state or country. Make sure to visit first, get your paperwork in order and anticipate seeing less of the people you leave behind. <br />
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Finally, be prepared to sell or give away furniture and other possessions. You'll have less space for everything after downsizing. </p>
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