August 27, 2013

Seniors, you can still take advantage of the Davenport Now tax rebate program.

danBy Dan Dolan
Dan Dolan Homes

Thanks to Davenport Now, buyers of new homes can still receive $7,000, $9,000 or more in cash to offset the cost of their new home in Davenport. And depending on the price of the home purchased, that amount could even be more than that. You can elect to take the funds up front or annually over a period of ten years.

The need for more senior housing in the Quad-Cities and nationally continues unabated. With some 10,000 seniors joining the retired ranks regularly, the issue for many senior households becomes how to best to fulfill their personal housing need. And it’s a big issue.

Living in a single family ranch-style home that allows for seniors to age in place is still the preferred choice for most households. “There’s no place like home” is still the favored option. For some, independent or assisted living facilities hold appeal. But the fees that continue unabated month after month with the likelihood of periodic increases make it difficult for many to afford. And even for many who can, the ability to forecast their ongoing cash needs makes it difficult to budget. Currently, most such facilities are in the range of $3,000 to $7,000 (or more) per month or $36,000 to $84,000 a year. For many, their available funds will only carry them in that type of facility for a year or two.

In my view, the program with the greatest opportunity for seniors and still largely misunderstood, is the reverse mortgage for purchase program approved by Congress in early 2008. And here I’m sorry to say, that some of the financial institutions involved in making the loans have done very little to help promote this program and to differentiate this “for purchase” mortgage program from the long-standing traditional reverse mortgages for existing homes that many seniors seem fearful of.

In essence, the Reverse Mortgage for Purchase allows a buyer 62 years of age or older, to buy the new home with a single “moderate” down payment usually derived from the sale of their existing home. With a reverse mortgage for purchase they can live in their new home “forever” without making any further mortgage payments. They simply pay their taxes, homeowners insurance and any monthly fee for lawn mowing and snow removal—and that’s it. They own the home. Upon their passing or departure, the home is sold by them or their estate, the reverse mortgage is paid off with the home sale proceeds and they or their estate receive any residual funds. Their obligation never exceeds the sale proceeds so neither they nor their estate incurs any residual or “leftover” debt.

Typically, a 76-year-old buyer will make an estimated $85,000 one time down payment on a $250,000 home. That amount varies by age of the buyer, prevailing fixed mortgage rates at time of closing and the related closing costs. In my opinion, a reverse mortgage for purchase can be a very important tool for asset preservation and estate planning. Often, the proceeds from the sale of an existing home cover the initial payment with leftover cash available for investment or ongoing operating needs.

This mortgage also helps seniors to budget their annual living costs, because essentially their very manageable out-of-pocket housing costs after the down payment are estimated at around $800 per month. That includes real estate taxes, homeowners insurance and lawn maintenance and snow removal costs. Moreover, Dan Dolan homes are very energy efficient so heating and cooling costs tend to average about $100 a month.

The assurance that homeowners will not run out of cash to cover their housing and living costs provides a peace of mind for the seniors and their families unequalled by other housing options. Moreover, the assurance that there will be no residual housing debt for the family to resolve affords even greater peace of mind.

Seniors looking to buy a new home that better meets their current lifestyle requirements should make every effort to take advantage of the Davenport Now program while also looking into a reverse mortgage for purchase. We at Dan Dolan Homes would be very pleased to help seniors better understand the programs and to take advantage of them.

Our Realtor associates can help you plan your housing needs

I would invite seniors to drop by any of our weekend open houses in Davenport, Bettendorf, Blue Grass, Muscatine or Clinton and visit with one of the Realtor hosts at the open. They can describe the Dan Dolan Homes housing options available for your consideration and show you how a Reverse Mortgage for Purchase might be of help to you. Of course, if you would like to make an appointment for a private showing I can always be reached at (563) 570-1460.

If you haven’t visited a Dan Dolan Homes home site recently I would encourage you to visit us soon. I think you will be pleased with our wide range of offerings along with the quality and affordability of the homes you will see. And in Davenport, you can pick up some extra cash for that grand piano or vacation you’ve always wanted!