Real Sage Advice

Veteran Benefits

2010-08-26T13:15:35-05:00

Serving our country is often a difficult but honored decision made by thousands of men and women each year. To help with the sacrifices made by these men and women, a variety of benefits are made available to veterans to ensure their well-being and future success after their time of service. Benefits offered to veterans vary from educational assistance to entrepreneurial guidance, but include: job training, VA health benefits, retirement funds, education benefits through the GI Bill. The VA Home Loan Perhaps the most important benefit for veterans pertains tosaving money while buying a home. Since its creation in 1944, the VA loan program has helped more than 18 million veterans and active duty service members homeownership. The VA home loan allows borrowers in most areas to receive loans up to $417,000 and, for borrowers seeking to purchase homes in high end real estate markets – up to $1,094,625, while still providing flexible eligibility requirements and competitive benefits. The VA loan program's dedication to helping veterans and active duty service members secure homeownership even affords borrowers with an imperfect credit history the opportunity to secure a VA loan.

What are the Benefits to a VA Loan?

Because the VA insures part of each loan, VA-approved lenders have greater confidence in eligible borrowers. This greater confidence in borrowers inclines VA-approved lenders to offer qualified borrowers a variety of benefits they would not be able to find with conventional loans including: • no down payment • competitive interest rates • down payments in the form of gifts • higher debt-to-income ratio allowed • no private mortgage insurance

Do I Qualify?

Over 80% of all veterans and active duty service members who are eligible for a VA loan would not have been obtain a home loan through conventional means. Although the VA home loan program is easier for veterans and active duty service members to qualify for, the must still meet one of the following initial requirements: • Have served 181 days on active duty or 3 months during war time • Or have served 6 years in the National Guard or Reserves • Be the spouse of a service member who was killed during active duty Those who meet the initial guidelines must also apply for and receive a Certificate of Eligibility which can be filed for by an approved VA-lender if necessary. Although the VA home loan program requires no income or credit requirements, most VA-approved lenders will desire a credit score of at least 620 to secure financing.

This post comes to you from James Kelley of VA Benefit Blog. A law school student at the University of Missouri, James Kelley works to educate the public on　government　financing options for home purchases.

Reverse Mortgages...the next waive of foreclosures?

2010-06-19T13:45:09-05:00

Reverse Mortgages are very simple to get. A 62 year old homeowner taking out a reverse mortgage doesn't face the kind of scrutiny as someone taking out a first mortgage to purchase a home. There isn't any check for monthly income, or even a credit check! The primary condition is the age of the homeowner, and the equity in the home. Unfortunately, there are a couple of factors that have left FHA with a budgetary short-fall (first time in history) with reverse mortgages.

First, Reverse Mortgages have been marketed as "non-recourse" loans. For example, when the homeowner with a reverse mortgage on their home dies, and if he/she can't sell the house for what is owed on the property (think short sale) This is a pretty compelling feature for seniors and their families--especially with what has happened to property values the last few years.

Second, there are some senior homeowners that have either forgotten, neglected, or can't afford their hazard insurance or property taxes. This poses a risk to the investors on the loan leaving them with no coverage in the event of a fire, or other damage to the home.

With this becoming a growing problem, FHA and Fannie Mae will likely look for ways to ensure seniors with reverse mortgages have paid their hazard insurance and property taxes. Since this is a term of the loan, they do have the ability to foreclose on seniors who aren't following through.

From the Washington Post: Vicki Bott, FHA deputy assistant secretary for single-family housing, said the new guidance this summer will emphasize a "curative approach" that allows seniors to "develop a plan to repay past tax and insurance delinquencies." However, if the plan doesn't pan out -- and the borrowers simply lack the capacity to pay what they owe -- FHA will be forced to pull the plug and foreclose.

We haven't traditionally thought of reverse mortgages as forclose-able. But the world of financing and banking is changing, and that effects our seniors as well.

When do you need a permit?

2010-02-23T12:32:29-06:00

Ask 5 different people when you need a building permit, and you'll likely get 10 different answers. In fact, there are only 14 circumstances in Minnesota where you are exempt from needing a permit.

1) one-story detached accessory structure used as tool and storage sheds, playhouses and similar uses, provided the floor area does not exceed 120 square feet.

2) fences under six feet

3) oil derrick (I'm not kidding)

4) retaining walls under 4 feet unless they support liquid

5) water tanks not under ground, under 5,000 gallons and the ratio of height to diameter or width does not exceed 2 to 1

6) sidewalks and driveways not part of an accessible route

7) decks and platforms not more than 30 inches above adjacent grade and not attached to a structure with frost footings and not part of an accessible route

8) painting, papering, tiling, carpeting, cabinets, counter tops, and similar finish work,

9) temporary motion picture, television, and theater stage sets and scenery

10)Prefabricated swimming pools installed entirely above ground

11) window awnings supported by an exterior wall that do not project more than 54 inches from the exterior and do not require additional support (see other explanations in the International Residential Code)

12) movable cases, counters and partitions under five feet nine inches in height

13) agricultural buildings

14) swings and other playground equipment

However, plumbing, electrical and mechanical permits ARE required for any of the above items.

Installing a hand rail, egress window, privacy fence over 6 feet, and sheetrock to your basement, all require permits.

What happens if you decide you don't need to get that permit, even though the law requires it?

Stay tuned...

Lisa Dunn is a licensed real estate agent in the state of Minnesota.

Boomers booming on facebook?

2010-02-04T12:22:29-06:00

According to Technology Live, 47% of Boomers have a facebook profile.

"Last year, social media boomed for Baby Boomers: 47% of them actively maintained a profile, compared with 32% in 2008, according to eMarketer."

It doesn't tell us who did the survey, or how many were surveyed, but perhaps reflects a boom in boomer's use of facebook.

Perhaps this means a growing trend for baby boomers to use facebook to find referrals for senior services on facebook.

Next time you're on facebook, join us on the RealSageAdvice page!

What Does the Housing Market Mean for Your Plans to Make a Move?

2009-10-14T12:59:58-05:00

Photo by Jsome1

Lately there have been glimmers of hope being report by the National Association of Realtors and by the local Twin Cities media that our local housing market may have finally bottomed out. If this is true, and this real estate agent thinks it's likely (depending on our local job market) what does that mean for your move and for future senior housing options?

This article at Senior Housing News projects that seniors will likely try to stay in their homes for a couple of more years and try to make gains on equity that they believe they have lost over the last couple of years.

My two cents: I saw an article last week that projected it would take until 2020 for home equity to rise to the levels it was in the year 2004. So, don't wait.

This article at The Progressive Retirement Lifestyles Blog claims senior housing communities with their rising vacancy rates can't just hold out and hope for the rebound in housing to fill up their communities. They have to keep up with consumer demand of increased servies.

My two cents: We've already seen housing communities working on more creative financing to help those seniors who want to move and have to sell their homes first. Kudos to them, they saw a consumer need and have moved swiftly to help those they strive to serve. This is the most immediate need in the Twin Cities Area for seniors who are wanting to move. They need senior housing communities to work with them to help pay those first months rent and admission fees until a great real estate agent can get that house sold!

Change is in the air...both for seniors who are making plans to move, and for what senior housing communities are offering their new residents. Senior consumers need something different than they did when the first assisted living communities were being built in the late 1980's. Stay tuned!

Helping Your Parents Move to Senior Housing

2009-10-05T11:54:53-05:00

It can be an overwhelming, emotional, and physically draining exercise to help your parents move to senior housing. It may not feel like it when you first start out, but it can be done!

I found this post on a blog where the author's blog contains all sorts of random thoughts about numerous things. On this day she writes about her parents living in a senior community.

Do these thoughts sound familiar?

My folks stayed in their own home as long as they could and a little longer than they probably should have...

Only one sister remained nearby ..., close enough to stop in and visit mom and dad regularly...

It's comforting to know they have a nice living space to spend their latter days...

My mom is getting exercise like never before and my dad now has an audience for his political editorializing...

It can be a difficult journey, but the outcome can be the peace of mind you deserve and an improved quality of life your parents deserve.

No new trends for seniors moving, just increased fear

Help! It's time for my elderly parent to move

Boomers and Beyond

2009-04-09T12:26:24-05:00

I've been invited to be a part of a panel discussion on ways Baby Boomers can plan ahead to live those retirement years to their fullest. The title of the event is "Boomers and Beyond: Hot Topics to Prepare You for the Times Ahead. The panel consists of a financial planner, elder law attorney, funeral pre-planner, president of a home health care company, and your's truly.

You're all ~~invited~~ encouraged to attend. Of course, there's no charge for admission, but you do need to register by calling 952-292-5801

Where: Grace Church, 9301 Eden Prairie Road, Eden Prairie MN 55347
Access seminar through door #4 at Grace Church
www.atgrace.com
When: Tuesday, April 28
7 pm – 9 pm

There's a difference between "alone" and "lonely"

2009-03-30T14:15:22-05:00

I love being alone. Perhaps it's because I'm seldom in a room alone (I'm not counting my dog or parrot here), or just because I'm an only child. I look forward to time alone to read, reflect, write, or do whatever I feel like doing. I revel in it. I rejoice in it.

But, plunk me into a room full of people where I don't know anyone and it's excruciating. I feel downright lonely. Yes, I'm outgoing and truly like getting to know new people, but I do not like being lonely. Going out to eat alone is another lonely experience I avoid like the plague.

We don't often draw the distinction between being alone, and feeling lonely.

One of the topics I often talk about with families of elderly loved ones is support networks. If the adult children are adamant that their mom or dad must move because they no longer have friends in the neighborhood, I often ask about the support network. Is there someone their elderly parent can call on if needed? Perhaps it's OK if their parent is alone. It doesn't mean they're lonely. And, if the senior isn't complaining about feelings of loneliness, perhaps being alone is not a criteria for a senior to move.

On the other hand, perhaps loneliness is a reason to consider moving. A recent study at the University of Chicago found that loneliness or feelings of isolation can have a negative impact on senior's mental health:

The most socially connected older adults are three times as likely to report very good or excellent health compared to those who are least connected, regardless of whether they feel isolated.

Older adults who feel least isolated are five times as likely to report very good or excellent health as those who feel most isolated, regardless of their actual level of social connectedness.

Social disconnectedness is not related to mental health unless it brings feelings of loneliness and isolation.

As we discuss whether or not it's time to move with aging loved ones, consider whether being alone truly means being lonely.

Other Blog Articles

Is it dementia or is depression?
10 Laws of Moving for Aging Parents and Their Families
8 Tips for Finding the Right Assisted Living Community

What does Medical Assistance have to do with selling a home? More than you might think!

2009-03-25T09:28:22-05:00

I received a phone call yesterday morning from Amy*. Amy was referred to me by A Place For Mom, a company that helps families find senior housing. Amy holds a Power of Attorney for her elderly mother. Her mother has been living with her for 18 months, and Amy has been trying to get her mother’s house sold so she has the money to pay for health care services. Amy has a full time job, small children, and is trying to take care of her mother, which has become another full time job. Amy is stuck in the sandwich generation until she gets money, or benefits, to help with her mom’s care. Amy just received a denial letter from Medical Assistance, denying benefits to her mother for an unusual reason. Not because her mother didn’t financially qualify, not because her mother didn’t need health care services, but because her mother’s house, which is still listed for sale, is priced below the home’s tax assessed value. (I’ll wait here while you finish shaking your head in disbelief).

This isn’t a new rule. The rule was created so Amy’s mother doesn’t try to sell her home to a friend or family member for $100, and then have the government (Medical Assistance or Medicaid) pay for her healthcare. The rule protects the system and the taxpayers from being ripped off, which is certainly a legitimate concern. (Lately it seems if rules aren’t in place, people get ripped off, i.e. American taxpayers and AIG).

We know that tax assessed values of properties tend to lag behind market values. A few years ago when home prices were selling well above the tax assessed value, we seemed to have forgotten about this rule. Now that it seems more common for homes to sell below the tax assessed value, it has become an issue for many adult children and seniors who are selling homes due to health issues.

So if you are a senior, the adult child of a senior, hold a Power of Attorney for a senior, or are the nominated executor of an estate, here is what you need to know to protect yourself against additional taxes, denial of benefits, or potential property liens:

1) Plan ahead. If there’s even a remote chance the homeowner is going to need some kind of health care in the next several years, make sure you follow these steps.

2) Work with a REALTOR who specializes in working with seniors. They’ll be able to make referrals to professionals that can walk you through this process.

3) Know and work with a good elder law attorney. Not only can they potentially help you protect assets, but also ensure you don't do anything today in the sale of your home that could (i) cause you to pay more taxes (ii) have a lien placed on your home (iii) limit benefits available to your elderly loved one.

4) Build a body of evidence to show you are selling (or at least trying to sell) the home for fair market value.

a. Get at least one (two is better) independent appraisals to document the home’s actual fair market value.

b. When you first put the home on the market, list it at the tax assessed value, then work with your agent to lower the price to the ACTUAL fair market price. This shows that you did try to sell the home at the tax assessed value before lowering it, and that a sale at the tax assessed value simply was not going to happen. (As a REALTOR I don’t like this one, but it is at the suggestion of an elder law attorney** I trust, so naturally I’ll suggest it to my clients.)

5) Keep all of your documentation in a safe place. In addition to keeping a copy yourself, you may have your agent scan your documents, so they’ll be stored electronically for at least 7 years. Real Estate Brokers are required to keep copies of their files for 7 years, and an appraisal and records of tax assessed values and list prices are within the realm of what a broker could keep.

6) If you are in the process for applying for Medical Assistance, and the home is listed for sale below the tax assessed value, be prepared for your application to automatically be denied. The denial can be appealed, however. If you’ve taken the previous steps, you’ve armed yourself with documentation to show you really are trying to get the house sold for a fair price, and not trying to take advantage of the system. This will be extremely beneficial to you during the appeal process.

*Name changed to protect privacy

DISCLAIMER. This information is not to be construed in any way as the author providing legal advice to the reader. Every person’s situation is different and thus the most appropriate legal advice for any particular situation could deviate from this information somewhat. You should consult with a qualified Elder Law attorney if you have any questions about this information.

**Craig P. Goldman is an attorney who concentrates his practice on Elder Law, Estate Planning, Disability Planning, and Probate. He can be reached at the following:

Craig P. Goldman

Messerli & Kramer, P.A.
150 South 5th Street, Suite 1800
Minneapolis, MN 55042
(612) 672-3640
cgoldman@messerlikramer.com

Healthcare in Retirement: Quality & Cost Savings

2009-03-18T14:09:42-05:00

If you are within just a few years of retirement you have probably begun to think about your dream retirement location. Perhaps this is your chance to finally build that log home in Montana and hit the slopes or head south to a balmy beach getaway for your year-round residence. You may even have taken the next steps: planning for that move financially and considering how you will spend your time - maybe lots of tennis and golf or taking up new hobbies like snowboarding, sailing or starting a rock band. (You never know…) If you’ve gotten that far, you are well on your way to enjoying satisfying retirement years.

Many of the articles posted on this blog are centered around elder health and housing. I don't spend a lot of time talking about those vital retirement years, because most baby boomers don't have difficulty figuring out how to spend their retirement time. If anything they continue to not have enough time for all of their interests!

If our parents have not done adequate planning we see them have limited choices available to them for long term care.

During your busy active early retirement years, I hope you'll consider the resources needed to cover healthcare and insurance costs for your healthcare. A little planning now can open more health care choices to you in the future, AND allow you to spend less on your health care and more on enjoying retirement!

While you're planning, it's a good idea to invest some time to find the best-ranked doctors and hospitals and to learn more about ways to save on healthcare costs.

A colleague of mine with a very unique business helps baby boomers with healthcare planning. If you are wondering what kinds of healthcare options might be available to you, and how planning ahead might help you, I encourage you to give her a call and investigate what kind of planning you can do to help meet your retirement goals.

Nancy O'Brien, MPA-Health Health Resource Planning & Transition Consulting Evergreen Health Advocates 651-336-3728 Cell

Helping Families Navigate Healthcare, Housing, Medicare & Insurance

nancy@evergreenhealthadvocates.com