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Archive for the ‘Reverse Mortgages’ Category

Are you over 62 or do you know someone that is over 62 and wants to have a second home, fractional property or condo hotel to ski, golf, visit grandchildren, or just enjoy more time away from home? By using a Reverse Mortgage, you can achieve the best of both worlds by using the equity in your home to acquire a second home, fractional property or condo hotel unit and enjoy the benefits of a vacation home while keeping your primary residence. With so many types of vacation homes on the market today, a Reverse Mortgage can help you leverage your existing home equity and get you access to the beach, the mountains and much more.

For example, a Reverse Mortgage can be used for the down payment on a retirement home in Florida and still allow a Senior to live in their current residence in Michigan until they finally decide to sell their Michigan home and relocate full-time to Florida. The proceeds from a Reverse Mortgage can be used for any purpose and the proceeds are generally tax free.* The proceeds can be used for the down payment on a second home or a retirement home, the annual expenses for a fractional or condo hotel such as property taxes, maintenance or insurance.

Reverse Mortgages are excellent tools to diversify a real estate portfolio by leveraging the equity in the primary residence to acquire a second home, fractional property or condo hotel. These represent lifestyle purchases which are sometimes just as important as using a reverse mortgage for day to day living expenses. Reverse Mortgages provide the means for financially sophisticated seniors to pursue their dreams for travel, spend more time with the friends and family, and enjoy the benefits of their hard work.

It is very hard to resist the urge to buy the latest and greatest things out on the market, especially when it seems like everyone around you seems to have the next step up of whatever you nave. We live in a very competitive and consumer driven society so it is very normal to want to buy the best of what is out there. However, whether you are truly in need of something or just really want something out on the market, it can be very disheartening to realize that you do not have enough money to fund your purchase.

If you want or need to buy something but do not have the money for it, you might begin looking into loan options such as reverse mortgages. Of course, when you start to realize how many different types of loans are available, you may start to wonder if they are all safe. One thing to keep in mind when thinking about taking out a loan is that they are all different and that it is important to do your research and consider several different loan types before making your final decision.

It can seem overwhelming when trying to decide whether to go with reverse mortgages or other loan types because you might worry about not choosing a safe option. One way to be sure that you are selecting a safe loan type is to make sure that you have read through and understand all of the loan documents. There are sometimes hidden stipulations within loans that people do not catch until it is too late and they are in financial trouble. If you have any questions about the loan documents, it is a good idea to meet with reverse mortgage lenders to discuss these.

One of the biggest factors in determining if it is safe for you to take out reverse mortgages is your ability to repay the money that you borrow. It is a good idea to take a close look at your finances to make sure that you can afford a loan and that it is the best time for you to borrow money.

You can also talk with other people that have taken out the type of loan that you are considering and ask them all of the questions that you have such as whether or not it is a safe option. Most loans, such as reverse mortgages are going to be safe options for you, however it is always a good idea to be on guard to make sure that you are protecting your money and your financial reputation. Also keep in mind that it is important not to become overwhelmed or frustrated with the variety of loan types that are available. There are many resources out there to help you find the right loan type, so if you have any questions, do not hesitate to utilize them. Hopefully by doing this you will find the loan type that is right for you and will quickly be able to get the money that you need.

The right to buy council scheme in the UK allows the council tenants to own a home of their own. This scheme allows the eligible tenants to purchase the property they have been living in since long. With the help of right to buy mortgages, it is possible for these tenants to own a property of their own. What makes this scheme different from several others is that the tenant would have to pay lesser than what they would have to pay when they purchase the house from open market. The tenants are entitled to discounts for living in the property for a number of years.

The discount rate that would be applicable would depend on quite a lot of different factors like the residence location, kind of residence etc. Any tenant that lives in a house would be eligible for a 30% discount along with a 1% discount for each year that has been spent residing in the property. For maisonettes and flats, the discount can be anywhere between 44 to 70% not exceeding GBP 38,000. Only in a rare few occasions the maximum discount rate would be admissible.

Are you eligible? In order to be eligible for this scheme and to get right to buy mortgages in the UK, you will have to be council tenant. A tenant like this is one who has been living in the property for five years or more in a county council or a body similar to that, housing action trust, registered social association or lender, the London borough council or district council. If you qualify these terms, then you would be eligible for the right to buy scheme. However, there would be further eligibility norms for the mortgage, depending on the lender that you approach.

Finding a mortgage There are quite a lot of loan companies and banks in UK that offer these mortgages to borrowers. Lenders realized the necessity of the scheme and have designed mortgages that would be suitable for borrowers purchasing a right to buy property. Right to buy mortgages are not very difficult to find in the UK since there are a large number of companies that offer it to borrowers today. A mortgage like this would help you arrange for the funds that you would need in order to purchase the property.

One of the best things about this mortgage is that it would offer to pay the full price of the property which is an added benefit to tenants to take benefit of this scheme. The property can be purchased outright and then can be repaid in easy monthly installments to the lender. In most cases, the installments are actually lower than the rent that the tenant would be paying. This would be a good opportunity for the tenant to own a property. However, it would be necessary for the tenant to understand the various requirements and the formalities that are involved for getting right to buy mortgages in the UK since the process for getting an approval for this scheme and the mortgage is quite lengthy.

Thousands of seniors are gaining financial freedom through the government insured Reverse Mortgage program. This unique program was first signed into law by Ronald Reagan in 1988 and has seen lasting improvements over the years that make it a financial tool for senior homeowners.

To qualify a senior must be 62 years of age, own a home with enough equity to qualify and declare the property as their primary residence. They also can not be delinquent on any federal debt and participate in a counseling session given by an approved government counselor.

Reverse Mortgages apply the opposite principles of a traditional forward mortgage. Traditional mortgages gain equity in a home by making monthly payments, while a Reverse Mortgage turns equity into tax free income or usable cash. Payments on the money owed are not required as long as the home is being lived in.

Senior homeowners have gained the freedom to buy cars, do home repairs and travel. Many simply feel more secure with a larger monthly income or a line of credit to draw upon, without the burden of a home equity loan that must be repaid. Some are just tired of penny pinching and want to improve their quality of life.

Now seniors have a safe, secured means by which to achieve financial security, while retaining home ownership. The U.S. Department of Housing and Urban Development (HUD) guarantee seniors who use the Reverse Mortgage program will not pass debt onto their heirs. A Reverse Mortgage is the safest mortgage someone can get. There is no due date unless the senior passes away, sells the home or moves out permanently.

For seniors, the recession is a terribly uncertain time. Rising living and housing costs and potential cuts to government assistance mean less social security and pension earnings to take care of their increasing health needs. The recession is troubling for all families, but is particularly difficult for seniors who do not have time, ability or opportunity to re-enter the job market.

Moreover, they are at an age when they have earned their right to a relaxing retirement. In this recession, reverse mortgages become a lifeline to seniors, helping them save their home and make the most of their retirement years. Many homeowners are not aware of the opportunity that the reverse mortgage provides them. At no penalty to the borrower and great interest rates, the reverse mortgage is a great return for the previous years spent paying a mortgage.

The reverse mortgage helps senior homeowners who are struggling to manage their rising medical bills and other expenses during their retirement on top of mortgage payments. The program allows these homeowners to convert equity in their homes to a tax-free income, without increased mortgage payments, and without the risk or reality of having to sell their home or sign over the title. But what happens to even the most stable and reliable of programs in the midst of an economic recession? When it comes to Reverse Mortgages, they only gather strength and continue to support borrowers.

These days, a new, higher lending limit will enable borrowers to obtain a greater benefit if their home value is higher than the previous HUD limit, when it is needed most. The U.S. Department of Housing and Urban Development raised the reverse mortgage limits to $625,500 to help stimulate the economy and provide immediate relief to senior homeowners facing unaffordable payments.

Now is the greatest time in history to qualify for a Reverse Mortgage. The implementation of this limit has increased financial options for senior homeowners during this difficult time and will significantly ease the burden of retirement during the economic downturn. The new limit is nearly double that of the limit from before the last increase in 2008, which consisted of a jump from $362,790 to $417,000.

Reverse Mortgage rates are at an all time low. It is now that financial stability become most important. Seniors simply cannot afford to overlook the benefits of a Reverse Mortgage during an economic downturn. Seniors may be in the prime of their life, but become more financially vulnerable and less resilient when outside circumstances threaten their retirement funds. Seniors who own their home may not realize they are sitting on a nest egg that could allow them more financial freedom in a recession than in a time of economic abundance.

Reverse Mortgages are a very good tool for many senior borrowers to enable them to access the equity in their home while never having to make another payment as long as they live in those homes. However, a Reverse Mortgage has always been a fairly expensive proposition, usually carrying a price tag of a 2% origination fee as well as a 2% government mortgage insurance fee, plus third party costs such as appraisal, title, escrow or closing, etc. In all, in some of the higher HUD areas, the total of all fees could total as much as $17,000. Even though these fees are not paid out of pocket and are rolled into the loan, the fees can still scare some borrowers away from obtaining a loan which could otherwise improve the quality of their lives until now!

The numbers don’t work with all reverse mortgages, but for those borrowers who planned to take a minimum of $200,000 or more on their reverse mortgage at the very beginning (not hard to do if you have to pay off an existing mortgage or if you already have plans for the funds and need them right away), borrowers can now obtain a reverse mortgage called the Independence Plan which will contain no origination fee! The lender has priced the loan so that the originator does not have to charge any fee to the homeowner for the loan. What more, if the initial drawn amount is over $275,000, then there aren’t any third party fees either because the lender will give a credit to off-set these fees as well.

Sound too good to be true? You start thinking that the interest rate has to be at or above 10% to offer this good of a deal, right? Well, it’s not too good to be true and the rate is excellent in fact much lower than many of the other programs available in the marketplace. So is there a catch? Well, the amount of money you get may not be quite as high as with some other programs, but considering that you only pay back what you receive plus interest and ultimately the amount you or your heirs pay back depends largely upon the interest rate at which the interest accrues, this plan might well be one of the best plans available in the market today. You don’t pay any costs or interest on any costs to start the loan, we’ve seen borrowers qualify for payments to them up to $3,5000,000 and the interest rate for a proprietary or jumbo product is among the lowest in the marketplace.

So if you have always thought that a reverse mortgage might be a good thing for you but always shied away from the high initial costs and your initial draw or loan amount would be $200,000 or $275,000 or more, now might be a good time to look into a reverse mortgage with no closing costs.