There was a time when U.S. homeowners could proudly point to their homes as the key to their retirement years. Home values, after all, were soaring every year during the great housing boom. Homeowners could dream of selling their residences for big dollars, enough to fund their retirement plans. However, those days are long gone. Today, even homeowners in the top real estate markets in the country have to scramble to find new ways to boost their retirement savings.
Too many U.S. residents have forgotten how to save for retirement. That’s because they were relying on their homes to constantly increase in value. Unfortunately, with the dawn of the housing crash, and the Great Recession’s lingering after-effects, there’s no guarantee that anyone’s home will increase enough in value to fund retirement. Remember, people are living longer than ever. This is good, but it also means people need more income than ever to make it through their retirement years.
And home values just aren’t increasing enough to provide the money people need. In fact, home values are falling. The National Association of Realtors reported the national median existing-home price for all housing types stood at $170,500 in October. That’s down 0.9 percent from one year earlier.
Those homeowners who purchased their homes at the peak of the real estate boom – in 2004, 2005 or early 2006 – are often underwater. Their homes have lost value since they purchased them, so they owe more on their mortgage loans than what their homes are worth.
Even though home values have dipped, there has been no let-up in the importance of saving for retirement. This means, then, U.S. residents have to look for other means to fund their retirement years.
Those who work for companies offering 401(k) plans need to invest as much as they can every pay period into their accounts. This will help boost their retirement dollars at a far faster clip.
Those who don’t work for such companies will have to open their own retirement savings accounts, such as traditional IRA or a Roth IRA. Again, it’s important for residents to invest as much as possible into their retirement savings accounts if they want to maximize the amount of retirement money they have available to them after they turn 59-and-a-half.
Accumulating enough retirement savings has never been an easy task. It’s more difficult than ever today. Fortunately, those residents who take the time today to start investing in a retirement savings account will greatly increase their odds of being able to live comfortably once their working years are behind them.
Those who continue to rely solely on their homes to provide their retirement savings? The odds are good they’ll be struggling financially long after they’ve sold off their homes.
Homeowners Coming to Terms with Actual Home Prices
The real estate smart search engine Trulia just recently released its March 2010 Reduction Report revealing that homeowners were finally coming in line with agents about what their homes are really worth. March marked a record low in residential property price reductions due to a more realistic outlook of the real estate market by the American public as a whole.
The news comes as President Obama’s $8,000 credit for first-time home-buyers and $6,500 tax credit for repeat home-buyers comes to an end in the near future. Contracts must be signed by April 30, and loans must be closed by June 30 in order to qualify for the credit. The incentive is credited with many American’s purchasing homes for the first time last year.
Trulia’s Reduction Report cites increasingly positive news that the real estate market is indeed on its way to recovery. Home price reductions in February managed to drop to its lowest levels in 10 months. Moreover, prices in 19 percent of homes on the market as of March 1 were reduced.
Although home sales have dropped, many agents blame external factors such as bad winter weather, and pricing disputes between agent and seller. In fact, many states are still facing disagreement between buyer and seller.
The overall consensus, however, is that as homeowners face the reality of fair home prices, the market will stabilize. If a house is priced for this market – then that means less time on the market and more turnaround. Stagnant houses are simply bad news for the economy.
Help Arrives for Distressed Homeowners
Help could soon arrive for homeowners who don’t have the financial resources to make their mortgage loan payments. Mortgage rates and home prices could become a distant memory, while releasing owners from any liability.
One of the nation's largest mortgage servicer providers, CitiMortgage, just launched a new program aimed at helping homeowners facing home foreclosure.
Instead of allowing borrowers to fall further behind on their mortgage loans each month – ending in foreclosure, it will allow owners to stay in their homes for up to six months if they agree to hand over the deed of their home.
The program targets borrowers who are already seriously delinquent, having missed at least three monthly mortgage loan payments. Typically those homes are most at risk of falling into foreclosure in the housing market. By giving the house back to the lender, in a transaction called a deed-in-lieu of foreclosure, the lender saves considerable expenses, especially on legal fees.
CitiMortgage will pay borrowers a minimum of 1,000 dollars to help with relocation expenses. It will also provide relocation counseling, and may even cover some monthly property expenses while the borrowers remain in their homes. It will also forgive any difference between the value of the home at time of repossession, and what the borrower owes. Once the deed goes back to the lender, the borrowers walk away free and clear.
In return, borrowers must agree to keep the homes in good condition and to meet with trained relocation professionals every couple of months to facilitate their final moves. It says the program is ideally suited for borrowers considering walking away from their mortgage.
How to Qualify for the Program:
* First mortgage must be with CitiMortgage.
* Homeowners must be living in the home.
* Must be delinquent on mortgage payments by at least 90 days.
* No second mortgage.
The pilot program is starting in six states: Texas, Florida, Illinois, Michigan, New Jersey and Ohio. If it works in those states, CitiMortgage says it will open the program to the rest of the country.
Stay tuned, we'll keep you informed on how this test program works out, and if it is to be expanded nationwide.
Help Arrives for Distressed Homeowners
Help could soon arrive for homeowners who don’t have the financial resources to make their mortgage loan payments. Mortgage rates and home prices could become a distant memory, while releasing owners from any liability.
One of the nation's largest mortgage servicer providers, CitiMortgage, just launched a new program aimed at helping homeowners facing home foreclosure.
Instead of allowing borrowers to fall further behind on their mortgage loans each month – ending in foreclosure, it will allow owners to stay in their homes for up to six months if they agree to hand over the deed of their home.
The program targets borrowers who are already seriously delinquent, having missed at least three monthly mortgage loan payments. Typically those homes are most at risk of falling into foreclosure in the housing market. By giving the house back to the lender, in a transaction called a deed-in-lieu of foreclosure, the lender saves considerable expenses, especially on legal fees.
CitiMortgage will pay borrowers a minimum of 1,000 dollars to help with relocation expenses. It will also provide relocation counseling, and may even cover some monthly property expenses while the borrowers remain in their homes. It will also forgive any difference between the value of the home at time of repossession, and what the borrower owes. Once the deed goes back to the lender, the borrowers walk away free and clear.
In return, borrowers must agree to keep the homes in good condition and to meet with trained relocation professionals every couple of months to facilitate their final moves. It says the program is ideally suited for borrowers considering walking away from their mortgage.
How to Qualify for the Program:
* First mortgage must be with CitiMortgage.
* Homeowners must be living in the home.
* Must be delinquent on mortgage payments by at least 90 days.
* No second mortgage.
The pilot program is starting in six states: Texas, Florida, Illinois, Michigan, New Jersey and Ohio. If it works in those states, CitiMortgage says it will open the program to the rest of the country.
Stay tuned, we'll keep you informed on how this test program works out, and if it is to be expanded nationwide.
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