Posts Tagged cost of living
Valuable Reverse Mortgage Information
Posted by Victoria Belle-Miller in Finances on 02/20/2010
A reverse mortgage is not just another typical home loan. It offers several benefits that other mortgages usually do not and most are insured by the Federal Housing Administration. This type of financing is for senior homeowners who may need financial assistance and have sufficient equity in their homes that can be turned into cash. This loan will allow them to stay in their home without making monthly payments and they may even be eligible to receive additional cash back.
How the Loan Works
If a homeowner qualifies for a reverse mortgage, he or she will not be required to make any monthly mortgage payments. The loan does not need to be repaid at all until the homeowner no longer occupies the home and it is sold. He or she will be able to stay in the home without worrying about the possibility of foreclosure due to missing mortgage payments. Also, if there is enough equity in the home, it can be turned into additional cash. The amount of money a homeowner can receive depends upon the homeowner’s age, the value of his or her home, and current interest rates.
Homeowners can choose how the money they receive is to be disbursed so that the amount and schedule fits their lifestyles and personal needs. The disbursement options include a lump sum, line of credit, monthly payments or a personalized combination. There are absolutely no restrictions on how homeowners can spend they money they receive from their loans. Seniors can use the money they receive for medical bills, home maintenance or other expenses.
Loan Eligibility & Requirements
In order to qualify for this loan, applicants must own their home and be at least 62 years old. The home must be the applicant’s primary residence in order to qualify, which means he or she resides in the home at least six months out of the year. Because there are no monthly payments with this loan, there are no income or credit score requirements. Therefore, homeowners can still be eligible for this type of financing even if they have limited incomes or less-than-perfect credit histories.
Borrowers are not required to pay back their loans until they no longer own or occupy their home. The only instance in which a homeowner would be required to repay the entire loan amount is if he or she did not keep the homeowner’s insurance, property taxes, or home repairs up to date.
Before a homeowner can take out a reverse mortgage, he or she will be required to participate in loan counseling, which will explore all of their financing options. This loan may not be the right option for everyone, so counseling will let homeowners know if this type of financing is the best option for their financial needs.
Don’t Buy into the Hype
Many people attempt to discourage reverse mortgages by spreading misleading information about them. While this type of loan may not be the right option for every homeowner, it is by no means a bad option for senior homeowners who need to supplement their incomes or reduce their monthly expenses.
This type of financing is a great option for homeowners who plan on staying in their homes for many years and do not need to preserve their equity for any reason.
Victoria Belle-Miller is the newest member of the Senior Reverse Mortgage writing staff. Her background in journalistic writing and ability to evaluate the issues that Americans face in daily life make her a strong addition to the team and a valuable source of sound mortgage advice.
In a Journalistic World Full of Opinions on Reverse Mortgages, Where is the Truth?
Posted by Anne Johnson in Finances on 02/08/2010
One month into the year 2010, many people have heard at least something-good or bad- about reverse mortgages. This product has become extremely popular in the last couple years and its popularity continues to rise. However, with popularity also comes criticism. Every article that is published seems to be a minimal amount of information clouded by a storm of opinions.
Although this product is different from any currently on the market, reverse mortgages are a still lien on a person’s home, just like traditional mortgages. Unlike traditional mortgages, a reverse mortgage does not require a person make monthly mortgage payments for as long as they live in the home.
Reverse mortgages are used so homeowners over the age of 62 can pay off their existing mortgage and obtain access to additional funds. Once a homeowner has taken out a reverse mortgage, they will never have to make a monthly mortgage payment again. This federally insured product does require that the homeowner remain current on real estate taxes, homeowner’s insurance, and home repairs. Provided that the homeowner maintains his obligations, the reverse mortgage will not become due until the homeowner moves away or otherwise vacates the home. If the homeowner fails to meet these obligations, the reverse mortgage could become due and payable before the homeowner leaves the home.
The federally insured reverse mortgage does have costs associated with it, just as all financial products do. Most of the up front costs associated with the product go directly to the government so that the reverse mortgage remains a non-recourse product. It is considered non-recourse because, assuming the homeowner continues to respect his contractual obligations, he will never owe more than the fair market sale value of the home.
Reverse mortgage benefits can help people who cannot comfortably afford their mortgage payments, health care, and daily expenses. Important to note is that this product is something which should be discussed with the homeowner’s heirs. In order for the home to remain in the family after the homeowner has passed away, the estate will be responsible for paying off or refinancing the reverse mortgage. This loan should not be considered if a homeowner wishes to leave a mortgage-free home to their heirs because it is a loan and does need to be repaid.
It seems that some critics are unclear on many important facts about this loan. The fees can be a little higher than traditional mortgages, but the interest is not. Also, the largest fees go directly to the government for insuring the reverse mortgage, not to the banker to make a quick buck. For homeowners who could use this product, the benefits strongly outweigh the costs.
There is a lot of misinformation surrounding reverse mortgages. This product is not right for everyone, but also should not just be used in the case of last resort. It can greatly help senior homeowners enjoy their retirement and the protections surrounding the mortgage continue to improve. Hopefully, the product will be around for many years to help seniors without enabling anyone to take advantage of them.
As a former psychology major, finding solutions to resolve people’s problems has always been a subject of interest to me. I hope that my writing will give people the knowledge and confidence to make important decisions about reverse mortgages. In addition to writing, I love to read, knit, spend time with friends and family, and watch the Missouri Tigers and Green Bay Packers!
Reverse Mortgages: How They Work
Posted by Anne Johnson in Finances on 01/30/2010
Reverse mortgages are a unique product that has been available in various forms and with various features for over two decades, though it was not until recently that these loans gained the widespread attention of retired homeowners, news media, federal regulators, and the mortgage industry, in general. This new-found attention has been accompanied by a great deal of misinformation, misunderstanding and, probably as a direct result, heavy criticism of the product.
The bottom line with any legitimate financial product is that it is only as beneficial as it is appropriate. In other words, if the product is right for your situation, it is the right choice; if the product is not right for your situation, it is the wrong choice. Legitimate financial products are amoral – they cannot be inherently good or bad. It is how the consumer chooses to utilize these types of products that determines whether they are “good” or “bad” for them.
That being said, the next concern is how a consumer is to go about determining whether a particular financial product is right for them. The only way for a consumer to make an appropriate choice is to be well-informed about the decision he or she is making. This is especially true in when it comes to reverse mortgages because they are so different from traditional financing.
So what is a reverse mortgage? The aptly named reverse mortgage is so-called because, rather than borrowers incrementally reducing their loan balance by making monthly payments to the lender, they receive monthly payments from the lender that incrementally increase their balance. There are other options for how the borrowers can receive their funds, but the monthly payment option best illustrates how these loans compare with traditional home loans.
When an applicant chooses to purse a reverse mortgage, there are several factors that determine how much money they can receive. The options available to the homeowner are to receive monthly installments or a lump sum, access their funds as needed through a line of credit, or a combination of these options. The lender will use several factors, including the disbursement option that is chosen, to estimate how much can be disbursed to the borrower. The goal when making this determination is to ensure that, when the loan becomes due to be repaid, the amount owed to the lender will not be more than the value of the home.
A reverse mortgage must be repaid in full when the borrower(s) no longer occupies the home. At this time, either the borrower or borrower’s estate will sell the home and use the net proceeds of the sale to repay the lender. The balance will consist of the total of all disbursements made to the homeowner or on the homeowner’s behalf, as well as the interest and service fees that accrued while the loan was outstanding.
Most of the reverse mortgages issues today are Home Equity Conversion Mortgages (HECMs), which are insured by the Federal Housing Administration. This means that the homeowner will not be required to repay any balance that exceeds the market value of the home at the time that the loan becomes due. So, if home values decline or if the balance ends up being higher than initially anticipated, the homeowner is not left ‘holding the bag.’
The only exception to the protection that is offered by a HECM is if the homeowner fails to abide by certain terms of the mortgage contract. Fortunately, these mandates consist of staying current on the real estate taxes and homeowner’s insurance and keeping the property in good repair. These are responsibilities that exist with or without a reverse mortgage, but failing to meet these obligations with a reverse mortgage can result in the homeowner owing the full balance of the loan, regardless of the home’s value.
Any homeowners who are interested in considering a reverse mortgage for themselves should speak with a knowledgeable home loan specialists who can describe all aspects of this type of loan, as well as other types of mortgages, before making a decision about their home financing.
As a former psychology major, finding solutions to resolve people’s problems has always been a subject of interest to me. I hope that my writing will give people the knowledge and confidence to make important decisions about reverse mortgages. In addition to writing, I love to read, knit, spend time with friends and family, and watch the Missouri Tigers and Green Bay Packers!
International Cost of Living Index Rank 2010
Posted by Steven Coleman in Career on 01/24/2010
The January 2010 International Cost of Living Ranking covers 276 global locations across the world.
We have reported the 10 most expensive countries to live in, the 10 fastest movers up and down in ranking and the 10 most expensive locations per basket item.
Tokyo is still the most expensive place for an expatriate to live with the highest overall cost of living index while Tianjin in China takes over from Zimbabwe with the lowest cost of living index.
The 10 most expensive ranked international cost of living locations as at January 2010, together with the previous Quarter’s rank as at October 2009, is as follows:
January 2010 Rank Country, City (October 2009 Rank)[Change in Rank]
1) Japan, Tokyo (1) [0]
2) Switzerland, Geneva (3) [-1]
3) Brazil, Brasilia (12) [-9]
4) Switzerland, Zurich (5) [-1]
5) China, Hong Kong (2) [3]
6) Norway, Oslo (10) [-4]
7) Denmark, Copenhagen (6) [1]
Venezuela, Caracas (7) [1]
9) Central African Republic, Bangui (4) [5]
10) Chad, N’Djamena (9) [1]
10 Fastest Movers Up
The fastest movers up in the rankings as a result of an increase in relative cost of living are:
1) 107 Guinea, Conakry (184) [-77]
2) 185 Fiji, Suva (247) [-62]
3) 84 Seychelles, Victoria (145) [-61]
4) 137 Australia, Adelaide (196) [-59]
5) 176 Macedonia, Skopje (235) [-59]
6) 128 Poland, Warsaw (183) [-55]
7) 151 Malawi, Lilongwe (206) [-55]
169 Uruguay, Montevideo (216) [-47]
9) 214 Lesotho, Maseru (256) [-42]
10) 69 Colombia, Bogota (111) [-42]
10 Fastest Movers Down
The fastest movers down in the rankings as a result of a decrease in relative cost of living are:
1) 171 Timor-Leste, Dili (79) [92]
2) 179 Ghana, Accra (117) [62]
3) 153 Ukraine, Kiev (106) [47]
4) 139 Georgia Republic of, Tbilisi (101) [38]
5) 225 Ethiopia, Addis Ababa (191) [34]
6) 208 Congo Democratic Rep, Kinshasa (176) [32]
7) 133 Sierra Leone, Freetown (102) [31]
205 Bulgaria, Sofia (174) [31]
9) 147 Liberia, Monrovia (119) [28]
10) 219 Armenia, Yerevan (193) [26]
The Top 10 most expensive international locations for each basket group
We make use of 13 basket groups which are the result of extensive research of actual spending habits. The cost of living indices reflect a reality-based international expenditure pattern. To compare the cost of living between 2 locations, the difference in the aggregate cost of all the items in each of the 13 baskets were compared in each location using the average price in each location for the same quantity of each item. Cost of living is the difference in the local cost of the basket in the same currency. The baskets are weighted according to expat spending norms.
Alcohol & Tobacco Top 10:
1) Kiribati, South Tarawa
2) Comores, Moroni
3) Korea Republic of, Seoul
4) Norway, Oslo
5) Thailand, Bangkok
6) Qatar, Doha
7) Colombia, Bogota
Brazil, Brasilia
9) Djibouti, Djibouti
10) Papua New Guinea, Port Moresby
Clothing Top 10:
1) Bahrain, Manama
2) Russia, Moscow
3) Croatia, Zagreb
4) Lebanon, Beirut
5) Brazil, Brasilia
6) Angola, Luanda
7) China, Beijing
Slovakia, Bratislava
9) United Arab Emirates, Dubai
10) New Caledonia, Noumea
Communication Top 10:
1) New Caledonia, Noumea
2) Kiribati, South Tarawa
3) Cameroon, Douala
4) Burkina Faso, Ouagadougou
5) Latvia, Riga
6) Cape Verde, Praia
7) Germany, Berlin
Gabon, Libreville
9) Papua New Guinea, Port Moresby
10) Colombia, Bogota
Education Top 10:
1) Venezuela, Caracas
2) Brazil, Brasilia
3) Angola, Luanda
4) Bermuda, Hamilton
5) Solomon Islands, Honiara
6) New Caledonia, Noumea
7) Central African Republic, Bangui
Australia, Sydney
9) Gabon, Libreville
10) Bahamas, Nassau
Furniture & Appliances Top 10:
1) Mali, Bamako
2) Cameroon, Douala
3) Brazil, Brasilia
4) New Caledonia, Noumea
5) Central African Republic, Bangui
6) Chad, N’Djamena
7) Cameroon, Yaounde
Togo, Lome
9) Russia, Moscow
10) Vanuatu, Port Vila
Groceries Top 10:
1) Solomon Islands, Honiara
2) Japan, Tokyo
3) Kiribati, South Tarawa
4) Central African Republic, Bangui
5) Denmark, Copenhagen
6) Congo, Brazzaville
7) Gabon, Libreville
Korea Republic of, Seoul
9) Norway, Oslo
10) Bahrain, Manama
Healthcare Top 10:
1) Japan, Tokyo
2) Kiribati, South Tarawa
3) China, Hong Kong
4) Brazil, Brasilia
5) Angola, Luanda
6) Venezuela, Caracas
7) Australia, Sydney
Comores, Moroni
9) Chad, N’Djamena
10) Bermuda, Hamilton
Household Top 10:
1) Japan, Tokyo
2) China, Hong Kong
3) Venezuela, Caracas
4) Taiwan, Taipei
5) Korea Republic of, Seoul
6) United Arab Emirates, Dubai
7) Angola, Luanda
Qatar, Doha
9) United Arab Emirates, Abu Dhabi
10) Croatia, Zagreb
Miscellaneous Top 10 (costs related to general goods and services such as domestic help, dry cleaning, linen, and office supplies):
1) Central African Republic, Bangui
2) Norway, Oslo
3) Guinea-Bissau, Bissau
4) Guinea, Conakry
5) Finland, Helsinki
6) New Caledonia, Noumea
7) Qatar, Doha
Denmark, Copenhagen
9) United Kingdom, London
10) Greenland, Nuuk
Personal Care Top 10:
1) Kiribati, South Tarawa
2) Gambia, Banjul
3) Comores, Moroni
4) Algeria, Algiers
5) Slovakia, Bratislava
6) Brazil, Brasilia
7) Chad, N’Djamena
Samoa, Apia
9) Australia, Sydney
10) Burkina Faso, Ouagadougou
Recreation and Culture Top 10:
1) Papua New Guinea, Port Moresby
2) Vanuatu, Port Vila
3) Central African Republic, Bangui
4) Mozambique, Maputo
5) Chad, N’Djamena
6) Benin, Cotonou
7) Switzerland, Geneva
Niger, Niamey
9) Gabon, Libreville
10) Switzerland, Zurich
Restaurants, Meals Out and Hotels Top 10:
1) United Arab Emirates, Dubai
2) Greece, Athens
3) Belgium, Brussels
4) Qatar, Doha
5) Slovenia, Ljubljana
6) Russia, Moscow
7) Korea Republic of, Seoul
Norway, Oslo
9) United Arab Emirates, Abu Dhabi
10) France, Paris
Transport Top 10:
1) Norway, Oslo
2) Cameroon, Douala
3) Switzerland, Geneva
4) Switzerland, Zurich
5) Liechtenstein, Vaduz
6) Denmark, Copenhagen
7) Netherlands, Amsterdam
Germany, Berlin
9) Comores, Moroni
10) Solomon Islands, Honiara
The definitions of each basket and the full cost of living rankings for all 276 locations are available on the Xpatulator Website.
Steven is Chief Instigator at Xpatulator a website that provides cost of living index information and calculates what you need to earn to compensate for cost of living, hardship, and exchange rate differences.
Expatriate Engagement
Posted by Steven Coleman in Leadership on 01/14/2010
Engagement is a fairly recent term in business. In the past the talk was about “attracting, motivating and retaining” expatriate employees. All three strategies focused primarily on money. A competitive salary that takes into account the relative cost of living, exchange rate and hardship together with global expatriate benefits such as longer vacations, flights home, private school, club membership and the like were typically used to “attract” expatriates to where their skills were needed most. Bonuses, performance based pay, and recognition plans were used to “motivate” expatriates. Shares, retirement plans and tax-free gratuities were typically used to “retain” expatriates using the so-called golden handcuff approach.
The financial crises and recession have in my view provided further proof that money alone is not enough. When money gets tight will your expatriate employees stay and will they be motivated? Money on it’s own will not motivate or retain an expatriate when annual salary increases are reduced, bonuses are negligible if they are paid at all and shares are not performing.
To ensure expatriates will stay when times get tough, an engaged expatriate is required. An engaged expatriate is one who is committed to the organization (i.e. the host organization). An engaged expatriate is willing to exert extra effort in accomplishing tasks important to the achievement of the organizations goals.
Recruitment and Promotion
Ensuring that expatriates are put in the right job is a prerequisite for engagement. In reality expatriates are often hired because their skills are not locally available and because they are willing to relocate to a location that most people would not want to live in. As a result expatriates are often hired for their technical skills and not for their behavior, which in their home country would have been closely analyzed and subject to rigorous reference checking. It is critical that the right expatriate is recruited into the right job taking all aspects into account, including personality, age, culture, attitude, and previous track record through quality reference checks.
High Performance Standards
Average performance is usually associated with easy, low demand work. Responsibilities and accountabilities need to be well defined with clear perceptible differences compared to those they report to and to those who in turn report to them. Where differences in accountability are not clearly defined the result is a “non-job”. It is not possible to perform in a non-job as it is not clear who is accountable for what!
For engagement, expatriates need to be challenged with high standards of performance that will test their abilities fully. Hiring over qualified, over experienced expatriates into jobs that are too small for them will leave them unchallenged. Expatriates often perform badly when unchallenged by the job, but rise to accomplish the most difficult tasks when properly challenged.
Feedback
An engaged expatriate requires feedback. With this information the expatriate can control their outputs, measure how they are doing, guide themselves to reach their goals, and accept complete responsibility for their tasks, assignment and job.
In conclusion I ask again. When money gets tight will your expatriate employees stay and will they be motivated? A competitive salary that takes into account the relative cost of living, exchange rate and compensation for the hardship of living in an unfamiliar/foreign location together with global expatriate benefits will attract and to some degree retain expatriates. However if you really want your expatriates to stay motivated when times get tough you need to ensure you have engaged expatriates. Engaged expatriates are committed to the organization. You can better engage your expatriates by ensuring that expatriates are put in the right job, are challenged with high standards of performance that will test their abilities fully, and by providing feedback on how they are doing.
Steven is Chief Instigator at Xpatulator.com a website that provides cost of living index information and calculates what you need to earn to compensate for cost of living, hardship, and exchange rate differences.