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Your Housing Account

VIEWS: 8 PAGES: 19

									NC Office of State Personnel
Life Planning Program




                         Your Housing Account
               RENTING VERSUS HOME OWNERSHIP

                            Home Ownership



        Advantages                              Disadvantages


Tax benefits (deductible interest        Cost and inconvenience of selling a
and property taxes).                     home, if the need arises.

Protection against inflation.            Inconvenience and cost of maintaining
                                         a home.

Pride of ownership, independence,        Money invested in home is not readily
and security.                            available if the need arises (non-liquid
                                         asset).

Monthly payments/costs are               Equity in home used for home
relatively fixed and more                investment rather than income
predictable than rent.                   producing investment.




                                Renting Your Home

        Advantages                               Disadvantages


Greater mobility, freedom to travel       No tax benefits or other financial
without the responsibility of a           returns on rental payments.
house.

Less work, less maintenance.              Little control over the quality of
                                          maintenance, environment noise,
                                          etc.

Little or no cash investment.             No build-up of equity.


Often desirable amenities the             No control over increasing
individual home-owner could not           monthly rent other than to move
afford.                                   somewhere else.
No permanent commitment, a       No security of remaining any
good way to test a new area      longer than the limit of the existing
without jeopardizing financial   lease. May have to move when
assets.                          least convenient for you to do so.
What Are My Housing Priorities?

What do you value in a home? This worksheet is designed to help you think about the kind of
features that are important to you. Everyone in the home should complete a separate sheet.
Consider each item carefully – how important is it to you? Why? Many times what we see is a
reflection of the housing experiences from our past – even from our childhood. Compare
differences and discuss among family members. Are these desires consistent with our current
lifestyle?
Must Have:               You wouldn’t consider purchasing a home without this
feature.
Would Like:             You would really like to have this feature, but would consider
                        purchasing a home that didn’t have it.
Can Live With:          You would prefer not to have this feature, but wouldn’t rule
                        out a house that had this feature.
Don’t Want:             You would not consider purchasing a home that had this
                        feature.

Home Feature                     Must Have           Would Like        Can Live With     Don’t Want

Convenience to:
Work
Shopping
Church
Social Activities
Other requirements:

The Neighborhood:
Safety
Privacy
Quiet Street
Active Street
Cul-de-sac
Friendly Neighbors
Other requirements:

The Home:
Single-family
Multi-family (duplex,
townhome)
Manufactured Home
Condominium
New
Pre-Owned
Other requirements:

Living Spaces:
Space for Hobbies
Space for entertaining
Home Feature                            Must Have                 Would Like            Can Live With         Don’t Want

Space for Children
Living Room
Separate Family Room
Dining Room
Basement
Eat-in-kitchen
Other requirements:

Bedrooms:
More than 2 bedrooms
More than 3 bedrooms
Bedroom for each person
Bathrooms:
More than 1 bath
More than 2 baths
Other requirements:

Automobile/Tool Storage:
Attached garage
1 car garage
2 car garage
Carport
Other requirements:

Yard:
Small, little maintenance
Large private lot
Fenced yard
Space for pets
Space for children’s toys
Garden for vegetables
Flower beds
Other requirements:

Amenities:
Fireplace
Dishwasher
Central heat and air
Porch
Patio
Deck
Other requirements:

Adapted from:
Merrill, J. (1990). Buying a home: The first time around. Madison, WI: University of Wisconsin-Extension.
Peart, V. (1993). Find your house. Gainesville, FL: Florida Cooperative Extension Service. Reichel, C.H. (1996)
Mapping your way to the right home. Baton Rouge, LA: Louisiana State University Agricultural Center, Louisiana
cooperative Extension Service. Varcoe, K.P., Costello, C., and Emper, H..H. (1996) Buying your home – putting the
pieces together. Riverside, CA: University of California, Cooperative Extension Services.
Evaluating Your Financial Resources

Complete the following form to determine how much money you have
available for monthly housing expenses. (Use average monthly rates/costs).
Step 1.   Calculate monthly income
          Gross pay (exclude overtime and other unreliable income)                 $ ____________
          Interest and dividends                                                   $ ____________
          Other: ________________________________________                          $ ____________
          Total income                                                             $ ____________


Step 1A. Calculate deductions from pay.
         Federal income tax                                                        $ ____________
         State income tax                                                          $ ____________
         Social Security tax                                                       $ ____________
         Retirement                                                                $ ____________
         Health and life insurance                                                 $ ____________
         Other, for example, charity                                               $ ____________
         Total deductions                                                          $ ____________
          Take home pay (Subtract total deductions above, from the total income,   $ ____________
          Step 1)

Step 2.   Calculate long-term monthly debt (in excess of one year).
          Car payments                                                             $ ____________
          Installment payments (e.g., Furniture)                                   $ ____________
          Credit Card Payments                                                     $ ____________
          Child support/Alimony                                                    $ ____________
          Other ________________________                                           $ ____________
          Total long-term monthly payments                                         $ ____________


Step 3.   Calculate total monthly non-housing expenses
          Food and beverage (home and work)                                        $ ____________
          Car Insurance                                                            $ ____________
          Car Repairs
          Clothes and grooming                                                     $ ____________
          Child care                                                               $ ____________
          Entertainment                                                            $ ____________
          Education                                                                $ ____________
          Gas and Oil                                                              $ ____________
          Medicines and health care (Including dental)                             $ ____________
      Other Transportation (Bus Fare, Tax)                                   $ ____________
      Savings                                                                $ ____________
      Taxes                                                                  $ ____________
      Total monthly non-housing expenses                                     $ ____________


Money available for monthly housing expenses (Subtract totals from Steps 2   $ ____________
& 3 from take home pay from Step 1.)

Money Available for Down Payment and Closing Costs

      Mutual Funds                                                           $ ____________
      Savings                                                                $ ____________
      Stocks, bonds, other investments                                       $ ____________
      Life insurance, cash value                                             $ ____________
      Loans or gifts from family                                             $ ____________
      Other ____________________________                                     $ ____________

      Total                                                                  $ ____________

Current Housing Expenses
       Rent (or Mortgage)                                                    $ ____________
       Utilities                                                             $ ____________
Total Current Monthly Housing Expenses                                       $ ____________
Move or Stay? The Retirement Housing Decision
This checklist presents factors related to staying in or leaving your existing home and
community. It includes both PUSH FACTORS (things you want to get away from) and
PULL FACTORS (things you would like to have). Older homeowners and renters can
rate each item in terms of possibility or priority to their lives, then discuss with spouse or
family.
Reasons to Stay:
   My paid-up mortgage gives me a “safe haven in old age” - with only taxes and insurance to
   pay.

   My property taxes and special assessments are low or stable and not expected to increase
   drastically (plus I may be entitled to special tax breaks as an older homeowner).

   Hazard and liability insurance on my house is affordable and adequate.

   The cost of living is lower where I am.

   My home is in good condition and doesn’t require extensive maintenance - either physically
   or financially

   My home is thermally efficient (or I can seal off extra rooms during the cold season), so
   drafts, heat bills, or hypothermia won’t force me out.

   My home is adaptable to decreasing physical abilities: compact and easy to care for, with
   minimal yard care.

   My home is all on one level ( or I can live on one floor) with no barriers (e.g., bathroom doors
   less than 30-32” wide), so I could live there in a wheelchair. Or it’s easily adaptable at an
   affordable cost.

   My home has built in safety features to guard against falls, burns, and other accidents (e.g.,
   handrails, nonslip floors, no or few steps, easy to reach shelves, and range/burner controls,
   and brightly-lit rooms).

   My home could be converted to share or rent rooms, or economically add a second unit for
   company, safety and security, or income.

   The climate here suits my situation.

   The home’s location is good for daily needs and social activities, including shopping, medical
   facilities, and nearby family and friends.

   I want to stay in similar surroundings with family, friends, church, doctor, etc.

   My neighborhood is pleasant, quiet, safe and secure, and not likely to deteriorate.

   I want to live near people of different age levels.

   I could live here without a car because a Senior Transit service or people are available to
   give me rides (or I can walk nearly everywhere.)

   My children have moved away, but that’s good - - they’re on their own.

   I am willing and physically and financially able to live here alone.

   It’s a whole lot easier not to move (besides, it takes time to sell a house).
  I want to keep equity in my home for a rainy day -- to provide an income if I outlive my other assets, or
  leave to my heirs.

  In this community, state, or region, the advantages available to older people outweigh the
  problems we face.

Reasons to Move:
  Home maintenance and operating costs are (or will be) too high for my retirement income.

  My home is the most valuable it’s ever been and the property taxes are too high. I want to
  move where taxes are lower.

  Homeowner’s insurance coverage is limited and expensive - if available at all - due to
  insurance relining in my declining neighborhood.

  I can’t afford the utility bills (especially heat and air conditioning), and I’m “too rich” to qualify
  for low income energy assistance programs.

  Services such as lawn care are not cheap and not always available - at any price - in this
  area.

  I want to move where the cost of living is lower.

  The age or condition of my home results in high-cost, uncomfortable living: old furnace,
  inadequate or no insulation, too many single pane windows.

  I am overhoused: the house and yard are too large for one or two people to clean and
  maintain (and I/we can’t find or afford qualified, reliable help).

  My home could limit my ability or freedom to travel on short notice and stay away for
  indefinite periods.

  The design and layout of my home could limit my mobility or present safety hazards, for
  example: interior space or exterior steps, no bath or bedroom on the first floor, the “lure” of
  the basement’s contents.

  The climate here is not good for my health: severe winters, snow-shoveling, can’t get around
  in bad weather, too much humidity, allergy problem, etc.

  My neighborhood is becoming rundown and unsafe: too much noise, vandalism, harassment,
  crime, etc.

  My children, other relatives, and friends have moved away and I want to be closer to them.

  The location of my home would make it impossible to live here without a car. No other
  transportation alternatives, walking is not an option for me.

  I want a change and new friends. I like the looks of (southern) retirement communities or
  _______________.
  I want to get away from ________________________________. I want to live with people my
  own age.

  I’d like to move to a community with more cultural opportunities, planned activities, and
  special health and medical facilities for older people, or where I can fish, golf, or swim year-
  round.
   I can sell my owner-occupied home one time after age 55 and can be exempt from capital
   gains tax on $125,000 of profit without having to buy another one as (or more) expensive. If I
   want, I can become a renter, invest the house profit, and live on the interest.

   Problems faced by seniors in this area are great enough for me to consider moving
   elsewhere.

   I’ll move, but I want to keep this house as an income resource or as a place to return if I don’t
   like my new living arrangement. I’ll wait to sell it to support me if I have to move to a nursing
   home later.

By Dr. Betty Jo White, Professor of Housing, College of Human Ecology, Kansas State
University.   Information obtained from: National Resource and Policy Center on Rural
Long-Term Care, May, 1995.
                              MY HOUSING GOALS

List the housing goals most important to you (and your family).

1
___________________________________________________________________

2
___________________________________________________________________

3
___________________________________________________________________

4
___________________________________________________________________

5
___________________________________________________________________


If your goal involves another person, write that person's name down. For example, if
you are considering buying a home, you would include your spouse in helping make
that decision.

Goal 1: (person's name)____________________

Goal 2: (person's name)____________________

Goal 3: (person's name)____________________

Goal 4: (person's name)____________________

Goal 5: (person's name)____________________


.
                                         LIFE PLANNING: HOUSING RESOURCES
The following agencies provide valuable housing information. Visit the websites to learn more about the topics indicated.


AGENCY/RESOURCE                   INFORMATIONAL                                                    LINKS
                                      TOPICS

Part I.   Home Buying/Renting

US Department of             1.   Homeownership               http://www.hud.gov/local/index.cfm?state=nc
Housing and Urban            2.   Rental Help
Development (HUD)            3.   Local HUD offices
                             4.   Other (a variety of
                                  housing topics)


North Carolina State              Mortgage Services           http://www.ncsecu.org/Resources/Publications/PDF/Brochures/MortgageServices.pd
Employees’ Credit Union           Brochure                    f


North Carolina Housing       Home Buying Information:         http://www.nchfa.com/
Finance Agency               1. Calculators:
                                o Mortgage Calculator
                                o How Much Can I
                                    Afford?
                             2. First Home Mortgage
                             3. Down Payment
                                Assistance

                             Renter Information:
                             1. Affordable Apartments
 AGENCY/RESOURCE              INFORMATIONAL TOPICS                                                 LINKS


Part II. Retirement Housing

North Carolina Division       1. Adult Care Homes            http://www.dhhs.state.nc.us/aging/housing.htm
of Aging and Adult            2. Assisted Living
Services                      3. Continuing Care
                                 Retirement Communities
                              4. Elder Housing Locator
                                 Service
                              5. Housing Help
                                 o Consumer Tips: How
                                     to Begin the Decision
                                     Making Process
                                     About Retirement
                                     Housing
                                 o Locating Housing for
                                     Older Adults
                                 o NC Homestead
                                     Exemption
                                 o Reverse Mortgages
                                 o Types of Housing
                                 o Nursing Homes
                                 o Services
 Implementation and Review

Use the following Decision Tree to establish a Plan for Action. Draw or check your
alternatives based on what is best for you (and those closest to you).




DECISION                  ALTERNATIVES                                        ACTIONS
                                                                       (Check if important to you)


                          House Adequate
Stay Put:          or
                          Alter House              then        _____Repair
                                                               _____Age proof
                                                               _____Reduce upkeep
                                                               _____Improve security
                                                    or         _____Change financing
                                                                      ____Reduce mortgage
                                                                 or   ____Use equity
                                                               ____Alter for income producing
                                                                     ____Small business
                                                                  or ____Rental room/apt.
                                                                     ____Garden/hobby


                          Same Area
Move to:      or
       (Area)             New Area                 then        _____Climate
                                                               _____Topography
                                                               _____Rural/city
                                                               _____Cost of living
                                                               _____Proximity to family
                                                    or         _____Proximity to friends
                                                               _____Proximity to leisure
                                                               _____Proximity to health care
                                                               _____Proximity to public transportation
                                                               _____Proximity to activity
                                                               _____Proximity to services
                                                               _____Proximity to present location
                                           Life Planning
                                       Resources and Options

    The following resources provide additional information that may be useful to you in the
    planning process.


                              An Online Guide to Resources and Options

              Financial Planning
Cash Management

Your Family Finances
http://yourfamilyfinances.com
About: Financial Planning
http://financialplan.about.com
My Money Management
http://www.mymoneymanagement.net/


Risk/Insurance Management

         Department of Insurance
http://www.ncdoi.com/Consumer/Consumer.asp

       State Employees’ Credit Union

http://www.ncsecu.org/Insurance.aspx

       WeSave, Inc

http://www.wesave.com

       North Carolina Retired Governmental
       Employees Association

http://www.ncrgea.com

       State Employee’s Association of North
       Carolina

http://www.seanc.org

       Agency Specific Benefit Plans (visit
       your agency Human Resources office)




                        ://www.ncdoi.com/Consumer/Consumer.asp


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