Posted by Snow in
Reduce Space
The primary reduction motive of sustainability is to reduce consumer habits and energy and nonrenewable resource consumption. But the home building and expansion frenzy of recent years can mean many homes are too overvalued to sell, to overpriced to buy and too over-financed to mortgage again. This presents a problem for people ready to reduce their energy consumption profile and move to more eco-friendly and sustainable quarters.
Seniors are often the market for a lifestyle consumption reduction that can’t happen without a paradoxicalyl large cash inflow. The average home, once the young’uns have fled the nest, becomes something a financial albatross for seniors. The added space or volume family rooms become energy wasting spaces not well fitted to their current lifestyle. A home designed to adjust and absorb efficiencies of use for 5-6 people does not reflect the same utility for two people.
But now seniors who can’t unload their legacy 15-30 year mortgage multibedroom home in a down real estate market now have room to breathe. Reducing a full-house mode of living to a green clean energy apartment or condominium could be a possibility. Seniors who maintained a residence close to key work or school geographies can now live more sustainably somewhere else.
Bringing down monthly costs can be easier with a new mortgage product aimed specifically at seniors, seniors whose principal residence is at issue, and whose age is 62 or older. The borrowing limit is $625,000 until the end of 2009, when Congress may decide to lower this to $417,000. But manufactured homes, second homes, and vacation properties are NOT eligible.
Reverse Home Mortgage Variation
One of the changes taking place in the home mortgage universe are a new variety of reverse mortgage product, a Home Equity Conversion Mortgage for purchase, or HECM. Implemented on January 1, 2009, the HECM functions to eliminate dual closing costs and financing adjunct costs for seniors. Income, savings, asset and credit qualifications are substantially reduced or eliminated.
The HECM functions to allow flexibility to seniors in a tight resale marker that would otherwise limit mobility from an old residence to a new property without significant costs and under newly stringent credit analysis standards. The downsizing element is emphasized. Seniors will be able to move close to the grandchildren, buy that lake home or city residence that caught their fancy, and draw from a line of credit for the difference after the sale. It doesn’t get more green than that.
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