Finance Information for Senior Living

from Sharp


A major component of financial planning is factoring in costs toward quality assisted living care. People are living longer than they have at almost any other time in history, which means the need for care will continue to rise. The economy is down and health care costs are up. It’s never too early to incorporate assisted living financial planning into an overall financial strategy. Just as many people start a college fund for their child well in advance, so should people start saving and researching how to pay for assisted living care.

What’s the First Step of Financial Planning for Assisted Living?

The first step is to have an understanding about the different kinds of care available in order to choose the right type of care the loved one will need. Assisted living care is typically non-medical and more associated with assisting seniors with day to day activities such as house work, yard maintenance, transportation, and social activities. There are medical services available but not on a routine basis. Assisted living residents are generally in good health and can take care of most things, but want the security and peace of mind that there are people there to assist them. Many seniors also do not want to have the burden of doing daily chores so they can focus on enjoying their golden years. For people who need more intrusive medical care there are skilled nursing facilities, often referred to as nursing homes.

Assisted living fees vary by state and region. Pricing structures also vary and can be based upon an all-inclusive model or a fee-for-service model where people pay only for the services rendered. In 2009 the average cost of assisted living was $3,100. For people who need Alzheimer’s or dementia care the costs were approximately $1,300-$1,500 more per month. The costs vary greatly from state to state with the lowest costs being in the South where the average was $2,300. The Northeast had the highest average costs coming in at $5,000 per month. To help mitigate costs some people elect to live in an assisted living community outside of the state where they reside.

Is There Financial Assistance for Assisted Living Costs?

It depends on the state where you live and your financial situation. It’s best to look at financial assistance from a three-pronged approach. The first includes researching state and federal programs that offer help. The second approach is to look at your own financial picture and to see what tactics can be done to reduce costs and increase cash flow. The third approach is to liquefy assets to free up large sums of cash to help pay for costs.

Several states have programs such as the Florida OSS for Seniors program or the SSI State Supplement Programs. Federal aid includes Medicaid and Medicare. There are also cost of living reductions such as medical expense tax deductions and credits and elderly care and disabled tax reductions and credits. Despite all these deductions it is important to know that the majority of costs will be out-of-pocket.

How Can I Pay For Assisted Living Care?

Again, the majority of assisted living expenses will be paid for by the private party. For most people this involves tapping into several resource pools such as retirement and pension funds, social security, home equity, insurance coverage, and savings. One of the main ways people pay is tapping into their home equity by selling their home or completing a home equity loan or reverse mortgage.

Many people wrongly assume Medicare will pay for their assisted living costs. It will pay for medically related expenses such as procedures, but will not cover monthly dues or other living costs. Medicaid, as it currently stands, will help people pay for assisted living costs through state waivers. Not all states have waiver programs so it is best to contact the Medicaid office in the state where you live to get the most current information. More and more states are adding a waiver program as it is more cost effective for them to pay for assisted living programs than skilled nursing facilities (nursing homes).

How Can I Develop An Assisted Living Financial Plan?

Financial planning for assisted living is complicated because you do not know what type of health your loved one may be in at the time when care will be needed. In those instances it is best to plan out several scenarios based upon different health care needs. Developing a long term plan will help ensure that your loved one will receive great care and your financial situation will remain stable when the costs begin to be incurred.

There are several individuals and agencies that can help you develop a plan. Since assisted living financial planning involves all areas of your finances it is best to see a certified licensed financial planner or accountant who has the expertise to give sound advice and strategies. It can be dangerous to solicit and follow advice from family and friends who do not have the knowledge of financial planning or assisted living. That doesn’t mean their advice is not sound, but getting a second opinion is critical. The best type of free advice from family and friends is from those who are currently in the situation of paying for assisted living care. They can provide very concrete advice based upon their experience.

Financial planners can look at your overall financial health and see what is best to for your particular situation and then formulate a plan. The sooner you can plan ahead the less impact the costs will have on your finances.

There are also financial planners who specialize in eldercare. Eldercare planners have worked with clients in similar situations and are often times more knowledgeable about resources and strategies concerning assisted living financial planning.

Public benefits counselors can be a good resource as they provide advice free of charge and are usually quite knowledgeable of resources that can assist you at the federal, state, and municipal levels. One downside is they have limited knowledge of overall financial planning strategies, laws, and instruments.

Posted on October 8, 2013 at 11:29 pm
Debi Bloomquist | Posted in News For Seniors |

Assisted Living Checklist

by Nicole on September 19, 2013
on Shart Seniors – A Trusted Senior Living Resource

Moving into an assisted living community is just one of many important decisions that need to be made regarding senior care. The next challenge is choosing the right facility for you or your loved one.

A personalized checklist will help you to make an informed decision, as well as an equal evaluation of every facility that you visit. Remember to make note of the facility name, address, phone number, main point of contact, website and email.

Below are some items you will want to include in your assisted living facility checklist

Initial ‘Over the Phone’ Questions

All of these questions can be taken care of over the phone. This will save the cost and time spent taking a trip and can eliminate a facility before you visit a community.

  • How many residents live at the facility?
  • Are the rooms private?
  • Do the rooms/units have kitchens?
  • Are different size units available?
  • Are there special units for special needs patients?
  • Are additional services available if the resident’s needs change over time?
  • Can residents use their own health care providers/pharmacists?
  • How do they bill residents?
  • Under what condition would a resident leave?

Questions to Ask During Your Visit

The next sets of questions are those that can be answered while visiting the facility. You’ll also want to note whether this is the first visit to the facility, what day it is, and what time you visited. These details can provide important information when making a decision. The questions to ask or take note of should consist of questions similar to the following:

  • What was your initial reaction to the facility?
  • Is the facility clean and organized?
  • Are the staff and patients cheerful?
  • Are the stairs and walkways well lit?
  • Are the exits marked appropriately?
  • Do the rooms and bathrooms have hand rails?
  • Are there safety locks on the windows?
  • Is there a backup power generator?
  • Is the floor plan easy to follow?
  • Are the rooms or units large enough?
  • Are there plenty of common areas for residents to use such as:
    • Game room
    • Library
    • Chapel
    • Computer area
    • TV area
    • Living room
    • Cafeteria
    • Special services such as a bank, café, beauty salon?

    Questions to Reflect On After Your Visit

    Contract and Expenses

    The preceding questions will help you note what your visit was like. After visiting more than one location all of the details can begin to blend together and it is very east to get facilities mixed up. The next portion of the checklist should note details of the contract and expenses. Sample questions include:

    • Is the contract easy to follow?
    • Does the contract contain a lot of fine print?
    • Do you understand all of the provisions of the contract?
    • What are the entrance fees?
    • What is the monthly rental charge?
    • How much is the security deposit?
    • Is the deposit refundable?
    • What utilities are included?
      • Heat
      • Electricity
      • Phone
      • Internet
    • Are there rate increases and how are they announced?
    • What if a payment is late?
    • What specific services are provided?
    • How often are services rendered?
    • What meals are served?
    • Are meals served seven days a week?
    • What times are the meals served?
    • Who determines the level of care patients receive?
    • What level of care is provided at the facility?


    Next you’ll want to ask about the specific amenities. Amenities are an important factor in determining whether or not you or your loved one will enjoy their stay. Questions to ask include:

    • Can residents bring their own furniture?
    • Is laundry provided?
    • Can residents come and go as they choose?
    • Can residents have a pet?
    • Is transportation provided?
    • When are visitors allowed?
    • Does the facility have a worship service?
    • Is transportation to places of worship provided?
    • Are residents charged parking?
    • Are visitors charged parking?
    • Do residents have storage space?

    Lastly, ask friends neighbors, and relatives who have experience with some of the facilities you’re visiting. Word of mouth travels fast and chances are if a facility has an overwhelmingly good or bad reputation, it is likely true. Also check internet chat rooms and forums to get information from real people. By following these steps you are much more likely to make a sound decision and avoid choosing the wrong assisted living facility.

    A checklist allows you to perform a much more detailed and accurate assessment for you or your loved one to make a decision. It’s also good to note the human element when visiting. Take note of your gut reaction to the facility, residents, and staff. The staff will most likely put their best foot forward so be extra aware of the feeling you get when walking in as well as during your tour.

Posted on October 2, 2013 at 10:56 pm
Debi Bloomquist | Posted in News For Seniors |

Buyers: Window of Opportunity Still Open


opportunity windowThe Fed recently announced they would continue their current pace of purchasing bonds until the economy was stronger. This bond purchasing program is the reason that mortgage interest rates are at historic lows. Rates began to increase over the last several months just on the anticipation that the Fed would announce that they would be reducing the level of bond purchases last month. When that didn’t happen, rates actually decreased (4.50 to 4.37).

That was great news for any buyer in the process of purchasing a home. However, this window of opportunity is expected to close in the very near future as most experts expect the Fed to taper the bond purchasers in December. Even Ben Bernanke, Chairman of the Fed, suggested that the Fed could still scale back the stimulus this year. He stated:

"If the data confirms our basic outlook, then we could move later this year.”

Where will mortgage rates head in 2014?

The Mortgage Bankers AssociationFannie MaeFreddie Mac and the National Association of Realtors have each projected that the 30 year fixed rate mortgage will have interest rates in excess of 5% by this time next year. The average of their four projections is 5.3%. The table below shows the impact this will have on the monthly principal and interest payment on a $250,000 mortgage:

Payment A buyer should take advantage of the current window of opportunity before it is too late.

Posted on September 30, 2013 at 11:08 pm
Debi Bloomquist | Posted in Economics, Homeowner News, Real Estate |

Why It’s Wise to Reduce Debts Before Applying for Mortgage


car and  house made of dollars

By   | posted Sep 11th 2013 12:41PM

Updated Sep 12th 2013 1:07PM

By Scott Sheldon

Trying to secure a mortgage right now? From higher mortgage rates, to rising home prices to the contraction in buying power — securing financing, for some, can be no easy endeavor. As prices, and rates rise simultaneously, lenders will still place the weighted emphasis on "real income," or, the amount of monthly payment you can afford — as that's what the loan is truly made against. Unfortunately, the amount of debt you have effectively chips away at your "real income." So before you try to get a mortgage, you might want to pay down your debt. Just make sure you do it the right way.

Before I delve into the specifics, here are some quick terms you need to know:

• Debt to income ratio, or DTI: Represents the total amount of monthly debt payment (including the house payment) divided into monthly income. Whenever this number exceeds 45 percent of the gross monthly income, things get tricky.

• Real Income: Also known as "qualifiable income," the net income considered for the housing payment after present liabilities are factored in. If you have $5,000 in monthly income × 0.45, that gives you $2,250 as a total debt allowance. If your other debts total $250 per month, that means your real income is $2,000 per month. Real income is also equivalent to a proposed housing payment.

• Debt: Refers specifically to the minimum payment obligations the consumer is responsible for. This has nothing to do with the total amount of debt, but what the monthly payments are. Lenders are looking for cash flow, how much or how little of it there is. Tip: Debt erodes income (ability to borrow money) at a ratio of 2 to 1; it takes $2 of income to offset $1 of debt.

Now, the strategy for paying off debt to qualify differs when buying a house from refinancing. Let's look at the differences:

Paying Off Debt When Buying a Home: When buying a home, and prior to attaining an accepted purchase offer, paying off debt to qualify is simply a function of learning how much more buying power is achievable by eliminating debt like credit cards, student loans or car loans. A qualified mortgage lender can run "what if" possibilities, which could become crucial in your endeavor to purchase not only the right home, but ultimately the home you can afford.

Let's say there's $5,000 left on your car loan, you have the cash in the bank and the car loan payment is $600 per month. $600 per month on a car loan reduces your ability to purchase to the tune of more than $100,000 in loan amount. Consider this: A $100,000 mortgage loan at 4.5 percent on a 30-year fixed rate mortgage translates to $506 per month, $94 per month less than if you didn't have the debt. If you pay off the debt in full, your DTI is reduced, improving your ability to qualify and increasing your real income.

How to Pay Off the Debt and Still Meet the Lending Credit Standard: If you're paying it off pre-contract, simply inform your mortgage company and they can do a third-party validation and the debt can be omitted. When paying off during the escrow process, monies will have to be sourced and paper trailed, which is a little more technical, but still achievable. The same goes for credit cards and other payment obligations.

Paying Off Debt When Refinancing: When you're refinancing, the lender's going to require that your credit obligations — such as a car loan or credit card — are paid off in full and closed to prevent the possibility of your accumulating further debt, thus potentially affecting your ability to repay in the future. Moreover, the lender would call for an escrow account to pay off the debt through the loan closing. When it comes to paying off debt to qualify in refinancing, different lenders will vary on their specific approaches. Generally, though, the accounts will have to be closed as well. That won't prevent you from reapplying for credit after the mortgage has closed, however.

How to Pay Off the Debt and Still Meet the Lending Credit Standard: The monies you use to pay off your debt, similar to a purchase transaction, will have to be sourced — and you'll have to have proof that the obligation has been closed. If possible, pay the credit card in full, learn the date the creditor reports to the bureaus, then apply for the mortgage after the creditor has reported it to the bureaus. Doing this will show the updated balance on the credit report, which will improve real income (revealing less debt), making the process more streamlined.

If you have debt that otherwise could be eliminated and have the means to pay off the debt, strongly consider doing so, as higher credit risk mortgages tend to be more pricey overall — compared to those for borrowers with lower debt-to-income ratios and better credit scores.

As you get ready to buy a house or refinance your mortgage, it's important to pull your credit reports and credit scores to see where you stand. You can get your credit reports for free once a year from each of the three credit reporting agencies, and you can monitor your credit score using a free tool like's Credit Report Card.


Posted on September 26, 2013 at 8:52 pm
Debi Bloomquist | Posted in Economics, Home Finances, Homeowner News |

How to Investigate a Potential Neighborhood

You’ve gone to the open house. You’ve had a private showing. You’ve read the disclosures. You’ve decided this is the house for you, and you’re ready to make an offer.

Before you take that step, though, you should fully check out the neighborhood. After all, this is where you’re going to live for years. Is there something you don’t know about that could negatively affect the resale value later? Is there a neighbor who comes roaring home late at night on a muffler-free motorcycle? Is the next-door neighbor operating a day care for pre-schoolers?

Given the high stakes of homeownership, it pays to do your homework before making an offer. For example, a potential buyer was ready to sign on the dotted line for a home in San Francisco, a city famous for its microclimates. The buyer had only been to the home during the day, when it was sunny and warm. On his real estate agent’s advice, the buyer returned at night — to find the house blanketed by cold, windy fog. He continued his home search elsewhere, relieved he hadn’t unknowingly bought into the city’s “fog and wind belt.”

Here are five ways to investigate a neighborhood before you buy.

1. Talk to the neighbors

Without being intrusive, look for an opportunity to chat with your potential neighbors. What’s their opinion of the block and the neighborhood? Do they know of any problem neighbors? Are they aware of any recent car or home break-ins? Is anyone planning a big remodel that could impact other homes or their values? Do they know of someone on the block who might be getting ready to sell? An even more desirable home could be coming on the market.

2. Visit day and night, weekday and weekend

As the San Francisco example shows, don’t just visit the house during the day. Check it out at night to get a sense of what’s going on in the neighborhood after hours. Is it noisy or calm? Visit on the weekend and early morning, too. The more times of day you go, the more chances you’ll have to get the feel for the neighborhood.

3. Check out the local newspaper and the neighborhood blog

Some neighborhoods still have their own newspapers. If there’s one published for the neighborhood you’re considering, check it out for local stories. Pay particular attention to the “police blotter,” which typically lists crimes reported in the area. Also, some neighborhoods have blogs where locals ask for tips and advice, or post issues or concerns affecting the neighborhood. A Google search should help you find out whether there’s a blog for the neighborhood you’re considering.

4. Get an app

Some smartphone apps, such as CrimeReports for iPhone, provide information about crime based on your location or address. Among the problems you may see displayed on a map are noise nuisances, sex offenders and vehicle break-ins. The CrimeReports app gives you some specifics, such as when and where each incident occurred.

Zillow’s real estate apps allow you to see estimates of properties on the block. They also allow you to search recent sales or see rentals, a good indication of whether your neighbors are renters or homeowners.

5. Google the street address

If you Google the home’s street address, you might be amazed at what you find. You might, for instance, discover a nearby home-based business with employees (which could reduce street parking spaces). Using Google’s Street View, where photos can be months if not years old, you might discover that the ground-floor bedroom window once had bars on it.

Be a sleuth before the sale

The Internet is an amazing resource of information. Too often, though, potential home buyers don’t fully use it to find out everything they can before entering into a contract on a home. As soon as you’ve identified a home you want to buy, get online and do your homework. You might be pleasantly — or unpleasantly — surprised by what you learn.

Posted on September 23, 2013 at 9:47 pm
Debi Bloomquist | Posted in Home Finances, Homeowner News |

Stop stressing about your mortgage with these money-saving tips


Are your mortgage payments stressing you out? Beat payments at their own game with these four tips.

If your blood pressure instantly skyrockets every time you open your mortgage bill, it's time to think about how you might start to combat that monthly stress.

Kelley Long, a personal finance expert in Chicago and spokesperson for the National CPA Financial Literacy Commission, says, "We have enough stress in our daily lives from things like work, family, and our go-go-go society. Opening your mail – and your mortgage bill – should not add to it. If you take the time to explore your options, you'll find a few really easy ways to reduce that burden for both the short and long-term."

Ready to learn about how you can take the stress out of paying your mortgage? Keep reading for four easy tips.

Tip #1: Refinance Through HARP

If you're stressing out because you can't refinance your underwater mortgage, stop panicking.

While you're in a difficult situation, you do have options: If your loan was originated before May 2009 and owned by Fannie Mae or Freddie Mac, you could be eligible to refinance through HARP – the Home Affordable Refinance Program.

Paula Pant, founder of, a money management website that serves over 15,000 readers a month, says HARP is a loan program designed by the Departments of the Treasury & Housing and Urban Development for people who are underwater on their mortgage and thus, unable to qualify for a traditional refinance.

"If you find out you're eligible, the purpose of HARP is to help you snag a lower interest rate, thus translating into a lower monthly payment – and less money paid in interest over the remaining life of the loan," says Pant. And a lower monthly payment equals less stress!

Tip #2: Negotiate Your Property Tax Rate

We know what you're thinking – how can you negotiate your property taxes? We'll explain in a minute, but before we jump right in, let's take a little detour to understand how mortgage payments are constructed. Pant says that your mortgage consists of four different portions: principal, interest, taxes, and insurance, collectively known as PITI.

"Taxes and insurance are 'escrowed' monthly," she says. "For example, if you owe $2,400 in property taxes each year, you'll pay $200 per month within your monthly mortgage payment towards taxes. Those taxes are based on your county's assessment of your home value."

But here's the problem. Many counties assessed home value when the housing market was at its peak just a few years ago, and haven't re-adjusted it to reflect current, lower home prices. So there's a chance you might be paying too much for your taxes.

Pant says you don't need an appraisal, just an assessment by the county. And you can get the process started by calling your local county line and voicing your intentions.

But how much can you expect to save? Pant gives an example:

"If you can get your annual tax rate to drop from $2,400 per year to $1,800 per year, you can get your monthly tax payment to drop from $200 per month to $150 per month. That's $50 less you'll need to worry about coming up with every month."

Tip #3: Switch to a Higher-Deductible Homeowner's Insurance Policy

Your homeowner's insurance costs are often lumped in with your mortgage payment, so if you can lower your homeowner's insurance premium, you'll lower your overall mortgage payment.

One way to do this is to switch your homeowner's insurance to one with a higher deductible – but a lower monthly payment. And this may be smart way to reduce mortgage costs since only about 3 percent of people file an insurance claim over the course of their homeownership, says home insurance agent, Vicki Tu'ua. That means there's a 97 percent chance you won't have to pay the high deductible.

The savings from the higher-deductible route was a path that intrigued Pant.

"We had homeowner's insurance with a $1,000 deductible," Pant explains. "We called our agent and got a quote on insurance with a $5,000 deductible. Our agent told us we'd save about $600 a year ($50 per month!) on this new plan, so we switched to insurance with the higher deductible and instantly lowered our monthly mortgage payment," she says.

If you're thinking about taking this route to decrease your monthly payments, Pant also advises creating a "home emergency fund" that could cover the higher deductible – just in case you do need to use it.

Tip #4: Reduce Your Interest Rate by Setting Up Automatic Payments

Out of sight, out of mind…that's the theme of this last tip.

Here's what we're talking about: Long suggests setting up a separate bank account for your mortgage, in which funds are transferred via direct deposits from your paycheck. Then you can arrange for your mortgage company to automatically withdraw your payment from that account. And depending on your bank, you could get a nice interest rate reduction by partaking in this service.

"Some banks will give you a small interest rate discount if you set your payment up for auto-pay through them, which saves you more money as well," says Long.

But how will this help relieve your stress?

"You'll never even have to worry about making your payment, taking all the stress away," says Long. "The reason I suggest a separate account is so that you're never tempted to spend the money designated to pay your mortgage, so you never have to stress about the money being there in the first place."

Posted on September 20, 2013 at 11:52 pm
Debi Bloomquist | Posted in Home Finances, Homeowner News |

Do you really need to spend a lot on home insurance?

By Andrea Duchon | Yahoo! HomesWed, Sep 11, 2013 1:53 PM EDT

Want to make sure your home and family are adequately protected? Here are five questions to help you figure out how much insurance you actually need on your home.

When you buy a new house, it seems like there are a million moving pieces and thousands of documents that need your signature. But how closely did you pay attention when you chose your home insurance policy?

Paula Pant, founder of, a money management website, says that most people gloss over their policy and either end up paying more than they need or simply not enough.

"That's a lose-lose situation," she says. "You need the Goldilocks policy: not too much and not too little."

To make sure you're adequately covered, here are a few questions to ask to help you figure out how much home insurance you need…

How Much Will it Cost to Rebuild Your Home?

When determining how much home insurance you need, understanding the cost of rebuilding your home is crucial.

"You need enough insurance to cover the cost of rebuilding your home at current construction costs," according to the Insurance Information Institute (III). It also warns against confusing rebuilding costs with the price you initially paid for the home, as the current value and reconstruction costs could vary greatly.

Below is a list of some factors that will decide the cost of rebuilding your home, notes the III:

  • Local construction costs
  • The square footage of the structure
  • The type of exterior wall construction – frame, masonry (brick or stone) or veneer
  • The style of the house (ranch, colonial)
  • The number of bathrooms and other rooms
  • The type of roof and materials used
  • Other structures on the premises such as garages, sheds

To gauge how much insurance you'll need to reconstruct your home, the III suggests multiplying the total square footage of your home by local building costs per square foot. You can figure out "local" costs by getting rates from contractors and talking to local real estate agent and builders.

And because there's so much to consider in determining reconstruction costs, Pant suggests walking through your home and taking pictures of everything from your countertops and cabinets to your tile and hardwood floors.

"When you submit a claim to your insurance company to justify the cost of rebuilding your home," she says, "these pictures of the components of your home will be immensely helpful in getting back the value of everything inside."

How Much are the Items in Your Home Worth?

It can be hard to know how much insurance to buy if you don't know what all of your assets are worth, says Pant.

"Many people underestimate the value of their assets because they don't conceptualize them as being worth cash," she adds.

However, Pant says it's important to have a good handle of the monetary value of your possessions as it will put you in a better position to recoup your costs should disaster strike.

To do this, Pant recommends having photographic evidence of your possessions.

"Walk around your house with the video camera, even if it's just the camera on your phone, gathering video evidence of what the interior of your home looks like. Couple that with any receipts or invoices from contractors that you've saved."

The III offers similar advice, noting that homeowners should take an inventory of their personal possessions: "You need to conduct a home inventory. This is a detailed list of everything you own and information related to the cost to replace these items if they were stolen or destroyed by a disaster such as a fire."

What's Your Likelihood of Getting Sued?

Do you have a dog? Swimming pool? Trampoline?

If you said yes to any of the above, you'll want to make sure you have strong liability coverage in the event that someone is injured by your pet or while they're on your property. Being covered is good risk management – just ask Mitchell D. Weiss, an adjunct professor of finance and member of the board of the University of Hartford's Barney School of Business.

"There are three good steps to good risk management," advises Weiss. "You want to identify the risks that concern you, estimate the likelihood of their coming to pass, and determine the cost you'd incur should that thing occur."

Once you take a look at those things, Pant says it's a good idea to carry an umbrella insurance policy to protect you in case someone sues.

"These umbrella policies are generally cheap – less than $100 a year can provide coverage for up to $1 million or more dollars for lawsuits and liabilities. If someone slips on ice in your front yard and sues you, it's good to have the peace of mind that you have additional protection."

Are Earthquakes and Floods Common in Your Area?

"If you're particularly prone to hurricanes, floods, or other natural disasters, make sure you buy added insurance specifically for that. Many standard plans won't cover natural disasters that your neighborhood is most likely to experience," says Pant.

In fact, the III says that floods, earthquakes, maintenance damage (like mold, for example), and sewer backup, are a few disasters that are not covered in a standard insurance policy.

Luckily, you do have coverage options available.

"Ground water flooding is not covered by most (if not all) homeowner's insurance policies. You'll need flood insurance for that, which the government makes available," says Weiss.

He also suggests looking at wind-damage insurance limitations.

"These are used to describe an issue that's common to beachfront – or near beach – properties. Insurance companies set high deductibles for that, which leaves the homeowner to cover the difference," Weiss explains.

So, if you live in an area that's known to experience natural disasters or just bad weather in general, you'll want to add any coverage necessary to ensure you're protected.

How Much Would it Cost to Live Elsewhere if Your Home is Damaged?

You obviously don't want to think about your home being damaged to the point where it's uninhabitable, but it's an important thing to consider when you're talking insurance.

"Remember: you'll unfortunately have to live somewhere else if your home is destroyed," says Pant. For this reason, she suggests that homeowners "opt for a plan that gives you a payout, or stipend, to cover the cost of renting a home for at least six months while your current home is being fixed."

A basic, bare-bones plan usually won't cover this, but many insurance companies offer riders, or a provision of your insurance policy that is purchased separately from the basic policy, which help pay for this cost.

"Of course, adding these riders to your insurance plan also increase your premium," Pant warns. But, paying a little more a month to ensure you have place to live if disaster strikes is probably worth it.


Posted on September 18, 2013 at 3:49 pm
Debi Bloomquist | Posted in Economics, Homeowner News, Real Estate |

Thinking of Selling Your House? 5 Reasons to Do it Now

by The KCM Crew on September 10, 2013 ·in For Sellers, Pricing

Many now realize that it is a great time to buy a home. Today, we want to look at why it might also be an opportune time to sell your house. Here are the Top 5 Reasons we believe now may be a perfect time to put your house on the market.

1.) Demand Is High

The most recent Existing Home Sales Report by the National Association of Realtors (NAR) showed a 17.2 percent increase in sales over July 2012; sales have remained above year-ago levels for 25 months. There are buyers out there right now and they are serious about purchasing.

2.) Supply Is Beginning to Increase

Total housing inventory last month rose 5.6% to 2.28 million homes for sale. This represents a 5.1-month supply at the current sales pace, compared with 4.3 months in January. Many expect inventory to continue to rise as 3.2 million homeowners escaped the shackles of negative equity in the last 12 months and an additional 1.9 million are expected to enter positive equity in the next 12 months. Selling now while demand is high and before supply increases may garner you your best price.

3.) New Construction Is Coming Back

Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. These ‘shiny’ new homes will again become competition as they are an attractive alternative for many purchasers.

4.) Interest Rates Are Rising

According to Freddie Mac’s Primary Mortgage Market Survey, interest rates for a 30-year mortgage have shot up to 4.57% which represents a jump of more than a full point since the beginning of the year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will continue to climb.

Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

5.) It’s Time to Move On with Your Life

Look at the reason you are thinking about selling and decide whether it is worth waiting. Is the possibility of a few extra dollars more important than being with family; more important than your health; more important than having the freedom to go on with your life the way you think you should?

You already know the answers to the questions we just asked. You have the power to take back control of your situation by putting the house on the market today. The time may have come for you and your family to move on and start living the life you desire. That is what is truly important.

Posted on September 17, 2013 at 6:45 pm
Debi Bloomquist | Posted in Economics, Everett, Home Improvement, Homeowner News |

Cultural Trends: How driving trends are impacting the housing market

Posted in Buying by Edward Krigsman 

Windermere Blog


As we have mentioned in previous blog posts, home buyers continue to consider their daily commute when making home purchase decisions. Some Americans are limiting their driving or forgoing cars all together. In recent years, the driving trends of Millennial and Boomer generations have decreased steadily. More Americans in general are embracing alternatives to driving like mass transit, walking, bicycling, car sharing, and working from home.

Recent studies and articles in publications like the Washington Post and theNew York Times document declining automobile use. Driving measured by consumption of auto fuel tells the same story. Whether you are a home buyer, seller, or owner, these trends may impact your decisions in new and surprising ways, with the value of your home being shaped, at least in part, by this trend.

If you are in the market for a home, considering your commute, walk-score, and transportation options could be an important part of determining if a particular neighborhood is right for you. It might also be helpful to seek out the assistance of a real estate agent familiar with such issues.

Real estate companies have started adding search features to their websites to assist buyers with evaluating commuting information. For example, Windermere recently added INRIX DriveTime™ to its website which allows home buyers to search for homes based on commute times. and provide home buyers with a quick and easy way to assess the quality of a community based on walkability and access to mass transit. These online tools highlight those homes with shorter drive times and higher walkability, factors which could end up impacting the value of certain homes as some buyers “vote with their feet,” rather than with their car.

Real estate developers are embracing this trend too by building in locations that reduce car use; this is why you may notice an increase in new housing as you travel from suburban neighborhoods into cities like San Francisco, Portland, San Diego, or Seattle. In some of these cities, it is increasingly common to see townhomes built in more walkable neighborhoods, many without dedicated, private garages. 

City planners are encouraging such construction by changing zoning laws to foster "Transit Oriented Development," (TOD). TOD changes zoning to incentivize developers to create new housing construction close to light rail stations, with progressively lower housing density to about 1/2 mile from their stops. This solves what city planners have come to call the "last mile problem," (getting more commuters home from a transit hub). Cities with TOD initiatives include Seattle, the San Francisco Bay Area, the Salt Lake City Metro Area, and the Portland Metro area.

With experts saying that consumers are trending towards less driving, home buyers may wish to evaluate the location of their purchase by asking themselves the following questions:

  • Does this neighborhood lower the cost of living, while increasing the quantity and quality of free time, by increasing my independence from cars?
  • What is the travel time between the places those in my household frequent most, such as home, work, schools, and recreational amenities?

If you are selling your home, consider highlighting its location as one that might improve the quality of life for the next residents by showcasing drive time, walkability, and proximity to transit—to the extent that such benefits exist.

Studies continue to show that the amount of time a person spends commuting every day is a major factor when buying a home. In recent years, there has also been a significant trend towards mass transit and reducing one’s “carbon footprint” by driving less. This is important for both buyers and sellers to keep in mind, as these factors can have a significant impact on the long-term value of a home – and on the quality of life for you and those in your community.



Posted on September 11, 2013 at 9:52 pm
Debi Bloomquist | Posted in Economics, Real Estate |

Should I Wait for Interest Rates to Come Back Down?





Above is a graph of the movement of the 30 year fixed mortgage rate since the beginning of 2012.

Some buyers are waiting to see if interest rates will come back down before making a decision about buying a home. Though no one can guarantee where rates will be in a few months, we don’t believe waiting is a good strategy.

Most experts believe rates may actually move higher. The Mortgage Bankers AssociationFannie MaeFreddie Mac and the National Association of Realtors are in unison projecting that rates will continue to climb.

With home prices increasing and interest rates projected to also increase, the cost of buying a house could quickly increase rather dramatically.

Posted on September 10, 2013 at 11:07 pm
Debi Bloomquist | Posted in Economics, Home Finances, Homeowner News, Real Estate |