Financial Articles

In today’s world the most valuable asset owned by people is their home. And when considering any size home improvement project, protecting this investment should be top priority.

If you are planning for renovating or remodeling your home and facing difficulty in finding the proper contractor, here are some tips to be keep in mind while selecting a contractor for your home improvement project.

How to find a Qualified Contractor:

One source for locating a qualified, experienced contractor is from other people who have had similar remodeling work done. When talking with contractors, request references and take the time to check them out.

Check with a service that keeps track records of various contractors.

You can also use online resources and directory for locating a qualified contractor in your area.
You can also use sites like LocalContractorBids.com, where you can submit your project so that contractors can place a bid on your project. After reviewing all the bids you can select the most appropriate one.

Hire only a home improvement contractor with strong referrals and high rankings. Depending on the type of project you are planning, you may need to deal with any of the following professional contractors:

Architects are designers of homes, buildings, and home improvement remodeling projects. You may want to consult one if your project includes new construction or structural changes.

Questions you should ask to Possible Candidates:

How long have you been contracting? What licenses and certifications do you carry? How many projects have you completed in the last year; what were they, and who were they for? How many years you are working on home improvement projects? “What references do you have? Will there be any subcontractors, and if so what are their credentials? What insurance coverage do you have? What permits are required for my project?”

Also check with the appropriate government office to see whether or not there are any unresolved complaints against the contractor before making your final selection.

Call all references and ask questions such as: Was the project completed on time and were you happy with the results? How well did the contractor communicate with you throughout the project? Were there any cost over-runs?

Also ask if the contractor employee’s were on time, courteous, and whether or not they cleaned up the home improvement site when they were finished?

About the Author:

Sanjay Lute is content writer for the http://LocalContractorBids.com;Visit the site (http://www.localcontractorbids.com/index.php ) for more information about Home Improvement projects

While there are a wide variety of reverse mortgages, only three types are nationally available. (Other reverse mortgage products and programs, mostly state and locally sponsored, tend to be for a specific purpose, e.g. solely to make repairs on your home or pay property taxes, and usually are for those who meet certain income or asset limits.)

The three primary reverse mortgage products are:

1. Home Equity Conversion Mortgage (HECM) - This is an FHA-insured (government-insured) loan, with a maximum loan amount of $362,790 (2006). The actual amount depends on your exact location, as limits vary by county. HECM is the most common reverse mortgage, accounting for 90 percent of all reverse mortgages in the United States.

2. Fannie Mae Home Keeper® - This Fannie Mae-insured loan offers a maximum of $417,000 (2006). It is often used to buy a smaller or more accessible home. (My book, Reverse Mortgages — Cash for the Rest of Your Life!, shows how this is done.) Fannie Mae is actually a private company, formerly known as the Federal National Mortgage Association. Although Fannie Mae is quite large, they are not the government. However, because of their size and the amount of regulation over them, their guarantee (their insurance) is virtually the same as the government’s.

3. Financial Freedom Cash Accounts - These are usually best for homeowners with high-value homes and high equity balances. These loans have no limit. They are offered by, and guaranteed by, a large private company.

Of course, anyone entering into a reverse mortgage will want to pick the type that pays the most to them. Unfortunately, there is no easy rule of thumb as to which loan results in the maximum payout. A number of factors affect the maximum amount, or loan limit, you can borrow. Your loan limit will depend on:

Loan Limits.

* HECM loans are guaranteed by the FHA, so FHA loan limits apply to all HECM loans. Limits vary by county and range from $200,160 to $362,790. They are 50% higher ($544,185) in Hawaii, Alaska, and the Virgin Islands. To find the loan limit for your specific area, visit the FHA’s web site at: https://entp.hud.gov/idapp/html/hicostlook.cfm.

* Fannie Mae Home Keeper® loans have one national limit of $417,000 (but are also 50 percent higher in Hawaii, Alaska, and the Virgin Islands). While this amount is higher than HECM, other differences in the calculations often result in a smaller loan.

* Financial Freedom Cash Account loans have a $75,000 minimum; there is no maximum, although it tends to be best suited for homes worth at least $500,000.

Home Value. The higher the appraised value of your home, the more you can borrow, up to the limits for the type of loan. Lenders’ calculations use your home’s value or the lending limit, whichever is lower. In other words, a $300,000 home in a county with a $175,000 limit is treated as a $175,000 home.

Age of borrower(s). The older the borrower(s), the more you can borrow. Some loans consider an average of the ages of both borrowers (if there are more than one), while others may consider the age of the youngest borrower only. Your age, whether there is another person on the title, and the age of the other person will all affect the amount of money you can expect.

The age at which you take out a reverse mortgage has a large impact on the amount of money you will receive. Lenders know that, most likely, older people will not live as long, and therefore, they will have to pay less to older borrowers. Also, if you are within six months of your next birthday, you will get the benefit of the higher age and qualify for the larger loan.

Interest Rate. The lower the rate, the more you can borrow. You can also select the payout option with the lowest rate, e.g. monthly vs. annually.

Limits vs. Loan Payouts. It is important, however, not to confuse the loan limit for a particular type of reverse mortgage with the maximum payout you can expect. For example, on a typical HECM loan with a limit of about $300,000, the actual payout will be about two thirds of that. Keep this in mind as you plan your financial future.

Gratefully, you won’t have to do all of the ‘number crunching’ yourself. Because reverse mortgages require a counseling session, your counselor can prepare the necessary calculations for you. In other words, someone else will do the calculations. You just need to pick the best answer.

Since there are so many variables that can impact the amount of money you receive, Reverse Mortgages — Cash for the Rest of Your Life! goes into many examples in detail, illustrating various options and how they might affect your reverse mortgage payout.

There are many advantages to both new and existing homes. Which one you purchase depends on your preferences.

When it comes to buying a house, new can be very nice. But existing homes have many benefits as well. You should consider all of the benefits to each type of home before you make your decision.

Why buy an existing home?

When you buy an existing home, you are usually able to buy a larger home for your money. New construction is usually priced by the square foot, a more expensive way of determining value. Construction costs are greater today than they were 10 years ago. When you purchase an existing home, the square feet are not calculated based on today’s square footage parameters. The cost is based on the age, style and location of the home.

You are often able to find better quality of appliances and features in an existing home. Most new homes contain “Builder’s Grade” features. These are not the top of the line appliances and components. An older home has probably been modified and remodeled since it was built. Homeowners often upgrade their appliances and carpeting as they can afford to do so.

With an existing home, you are getting an established neighborhood. You know who the neighbors are before you move in. If you are moving into a new construction neighborhood, you don’t know what mix of people will move into the surrounding homes. This can affect the quality of the neighborhood and the housing values in the future.

Advantages of buying new

The first decade of a house’s life is its formative years. This is the time when the most price appreciation occurs. The new home has a lot of appeal. It needs little maintenance, doesn’t require immediate remodeling or upgrades and is an economical choice if you don’t have a lot of money for upkeep right now.

New homes usually come with warranties that cover many of the components of the home. For the first two years, the warranty can cover almost everything from appliances to carpeting and the heating and air systems. The first ten years will cover the structure itself from erosion, shifting and foundation problems. Warranties can save you a lot of money on home repairs.

Many homeowners take great pride at being the first to own a home. They can add options to the floor plan and create the home of their dreams. There are no hidden problems or dishonest sellers to worry about. When a new neighborhood is filled with new owners, a rapport can be built that is not found in established neighborhoods.

Buying a home, whether new or slightly used, is a very emotional decision. Look at all of your options when looking at homes to purchase. You may find that you like the appeal of an existing home’s charm or the starkness of a new home. The decision is ultimately yours to make. Whether new or used, owning a home is a truly rewarding experience.

Martin Lukac (http://www.MartinLukac.com), represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!