We are both disabbled on fixed SSI. income . I am 62 and wife 57.
Posts Tagged ‘Mortgages’
Annuities and Mortgages math questions?
03
May
Marie bought a house for $151,000. She put down 10% in cash and financed the rest with a 30-year mortgage at 6.3% annual interest.
1. What are her montly payments?
2.If she repays the entire loan as planned, what is the total amount she will have repaid?
Mortgages In Syracuse Ny
30
Nov
In need of Mortgages in Syracuse NY? Note Deals has got you covered! Real Estate Note Sales, Inheritances, we do it all! Call us today to hear about our great rates! 315-420-2278
Advantages and Disadvantages of Reverse Mortgages
29
Sep
Guide to Reverse Mortgage Pitfalls and Benefits
For many people, a Reverse Home Mortgage (now referred to as RM) is a good way to increase their income in retirement – positively affecting their quality of life.
Advantages:
The main advantage of RMs is that they are an extremely flexible financial planning product with very few – if any – restrictions on how you receive and use the money.
To many people, a RM simply sounds too good to be true. But, there really are no catches. Given the right set of circumstances, a Reverse Mortgage is an ideal way to increase your spending power in retirement.
Key advantages and benefits of RMs include:
· No Risk of Default:
o Unlike a home equity loan, with a Reverse Home Mortgage your home can not be taken from you. If you default on a home equity loan, you could lose your home.
o The RM Lenders have no claim on your income or other assets.
· No Downside: With a RM you will never owe more than your home’s value at the time the loan is repaid, even if the RM lenders have paid you more money than the value of the home. This is a particularly interesting advantage if you secure a Reverse Mortgage and then home price declines.
· Tax Free: The money from a RM is typically tax free, since it’s a loan when the homeowner receives the funds, as either additional fixed income or a lump sum.
· No Restrictions: How you use the funds from a RM is not restricted – go traveling, get a hearing aid, purchase long term care insurance, pay for your children’s college education – anything goes.
· Flexible Payment Options: You can receive the RM loan money in the form of a lump sum, annuity, credit line or some combination of the above.
· Easy Pre-Qualifications: There are no income qualifications to get a RM.
· Home Ownership: With a Reverse Mortgage, you retain home ownership and the ability to live in your home.
· Guaranteed Place to Live: You can live in your home for as long as you want when you secure a Reverse Mortgage.
· Federally Insured: The Home Equity Conversion Mortgages (HECM) is the most widely available Reverse Mortgage. It is managed by the Department of Housing and Urban Affairs and is federally insured. This is important since even if your Reverse Mortgage lender defaults, you’ll still receive your payments.
· Recently Increased Lending Limits: As of Nov. 6, 2008 the Department of Housing and Urban Affairs increased the loan limit on the HECM to $417,000. And, for loans written in 2009, the loan limit is $625,500.
Disadvantages:
A RM may not be for everyone, consider the following:
· Beware if You are Eligible for Low-Income Assistance: If you are currently or will be eligible to receive low-income assistance from the Federal or State government (like Medicaid), you will want to be careful that income from a Reverse Mortgage does not disqualify you from that assistance. (NOTE: Social Security and Medicare are not impacted by a Reverse Mortgage.)
· Reconsider if You Are Planning to Move in the Near Term: Since a Reverse Home Mortgage loan is due if your home is no longer your primary residence and the up front closing costs are typically higher than other loans, it is not a good tool for those than plan to move soon to another residence.
· Evaluate if You are Willing to Reduce Your Heirs Inheritance: Many people dismiss a RM as a retirement option because they want to be sure their home goes to their heirs. And it is true, a RM decreases your home equity – affecting your estate. However, you can still leave your home to your heirs and they will have the option of keeping the home and refinancing or paying off the mortgage or selling the home if the home is worth more than the amount owed on it. There are numerous potential Estate and Retirement Planning benefits to a RM- see Innovative Uses of a Reverse Mortgage for more information on these options.
Reverse Mortgages – Get The Money You Need – Part 1 of 4
27
Sep
Reverse Mortgages are loans that allow you to borrow back the equity in your home. Just as you once paid the bank, the bank now pays you. Isn’t that a nice change ?
If you are 62 years of age or older, they are a way to borrow against the equity in your home (the value of your home minus any mortgage debt you now have) to provide you with tax-free income. Seniors struggling because of falling retirement account balances and increases in the cost of medical care are looking for new sources of cash to maintain their standard of living.
The amount you can borrow depends on your age, the value of your home and interest rates.
Fortunately, you continue to own and live in the home for the life of the loan. There are no loan payments until you sell the house, die or move out for a period of a year or longer.
You can get the money as a line of credit, a monthly payment, a lump sum, or a combination of all of these. A monthly payment is a guaranteed of income for as long as you live in your residence, whereas; a lump sum could be used as you wish, such as to purchase an annuity that could provide you with a life long income. With a line of credit, you don’t have to pay interest on money you haven’t withdrawn and your money will earn interest while it’s waiting to be used by you.
A Reverse Mortgage might be worth considering if:
-You plan to stay in your home.
-You want to enhance your lifestyle and enjoy your golden years.
-You want funds for major expenses such as medical bills, or for major home repairs.
-You need additional income to live on and your only significant asset is your home.
-You want the peace-of-mind that comes from knowing your financial needs are taken care of.
-You own your home free and clear, or you have a small first mortgage.
-You don’t plan to leave your home to your heirs.
What are some of the potential advantages of Reverse Mortgages?
-It can help you maintain your financial independence or improve your quality of life.
-You can stay in your home and keep title to the property.
-The money you receive is tax-free and is not usually considered income.
-You make no payments until the loan ends or the house is sold.
-Your income is not a consideration in obtaining the loan since there are no payments until the loan ends.
-You cannot owe more than the value of the home at the end of the loan.
If you’re a senior, I hope you can see the benefits of taking advantage of this income source, if you need it.
This is a four part series, one each week right here, same location. In Part 2 next week, we’ll explore much more, including the drawbacks of a reverse mortgage and what types are available.
Secure Power Through Reverse Mortgages
26
Sep
Sometimes, life plays a crucial role and hits a person on a wrong side. Especially, if a person is a senior citizen and is continuously struggling to meet the every day expenses by sacrificing little wish. However, not any more, as if the elderly person owns a house then he or she can definitely opt for reverse mortgages without thinking or taking enough time. Reverse mortgages can be a reason for their smile as they turn dreams into reality.
Reverse mortgages are loans available to senior citizens above or 62 years of age. These loans are used to release the home equity in the property as one lump sum or multiple payments. The homeowner’s obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves the house and moves out somewhere else. In a typical mortgage, the owner of the house makes a monthly payment to the lender; after each payment the equity increases within his or her property, and typically after the end of the term for instance if the term is of 30 years then the mortgage is paid in full and the property is released from the lender. Whereas in reverse mortgages, the homeowner makes no payments and all interest is added to the lien on the property. If the owner receives monthly payments, then the debt on the property increases each month.
However, the American authorities generally advise that Internal Revenue Service do not consider loan advances to be income, annuity advances may be taxable, and interest charged is not deductible until it is actually paid, that is, at the end of the loan. The loan ends when the owner of the property dies, sells the house, or, depending on the loan conditions, moves out of the house for 12 consecutive months for example, into an assisted living home. At that point, the reverse mortgages can be paid off with the proceeds of the sale of the house, or be refinanced by the heirs of the debtor. If the proceeds exceed the loan amount, the owner gets the difference; however, if the owner dies, then the heirs get the benefits of the deal.
For cases where the proceeds are not sufficient to pay off the loan, then the bank or the insurance that the bank has on the loan absorbs the difference. It has been noticed that many borrowers move out of the property or die, as long as the borrower or his estate provides proof to the lender that he is attempting to sell the home or obtain financing to pay off the outstanding debt, the investor will allow him up to one year to do so. Here the lender looses all his powers and cannot force the debtor to leave his property after the completion of one year. The various types of reverse mortgages are single-purpose, federally insured, and proprietary and covers the benefits also along with the drawbacks of the deals. Even the costs associated with getting reverse mortgages are similar to conventional mortgages. So do not wait and apply for these loans immediately.
Reverse Mortgages Basics
25
Sep
If you are looking to find out more about reverse mortgages then you should be able to discover some answers to at least some of your questions. An annuity reverse mortgages is a home loan product that is specifically addressed to homeowners that are over 62 years old and in order to qualify you will need to own at least 75 percent interest in your home. The way it works is very simple and it implies that you get a home equity loan that is based on the current market value of your home and the amount that you still owe on the property. Although you receive the cash when you make the reverse mortgages there are some programs that allow you to spend them however you find fit while some programs have strict rules when it comes to the usage of the money.
One of the best features of reverse mortgages is that you do not have to pay monthly mortgage rates but if you decide to sell your home or pass away then the loan will need to be repaired by the proceeds from the sale or from your estate. Keep in mind that not every mortgage lender that offers home loans will also offer a reverse mortgages program. The best approach to find reverse mortgage deals is to talk to mortgage brokers or to non-profit organizations such as HUD. If you find the persons that deal with these types of loans you will be able to find out more information about how the loans work and they will be able to direct you to lenders that offer reverse mortgage.
For more resources regarding loans for senior or even about reverse mortgage and especially about reverse mortgage costs please review these pages.
Retirement Planning In Florida Include Reverse Mortgages
24
Sep
http://pensacola-financial.com Annalee Leonard helps Florida investors with IRA rollovers, retirement planning, and maximizing retirement income with annuities, reverse mortgages and insurance
What’s Wrong With Reverse Mortgages
22
Sep
Red flags are warning signs. If you see the warning sign then you won’t fall off the cliff, hit the pothole, or go where no one should go. Take a look at the red flags listed here and don’t see these as negative aspects of reverse mortgage but just reminders of the fact that when big money is involved, there are a few people out there who might get a little greedy now and then. Surprising, yes but it’s true. Reverse mortgages can be wonderful tools for seniors trying to make ends meet by putting their home equity to work. And, like anything else, you’ve got to know where those potholes and cliffs are to get to where you want to be. Here are some reverse mortgage red flags to keep an eye out for.
Red Flag #1. Complicated paperwork may have unforeseen consequences. If you don’t understand the document, you won’t understand the consequences. Take the time to get proper guidance, second opinions, and a review of appropriate alternatives.
Red Flag #2. High cost of a reverse mortgage may outweigh the benefits of alternatives. As in any loan, there are going to be associated fees and costs. These should be clearly spelled out up front. Consult your lawyer, accountant, or other trusted adviser to review any loan application before making a major financial commitment like a reverse mortgage.
Red Flag #3. Uncertain benefits. The strange thing about reverse mortgages is that you cannot calculate the true cost of this loan because it depends on how long you are going to live. But, if you want to pass anything to your heirs, it’s worth considering the alternatives. There is no way to predict the home appreciation and future interest rates so consider the reverse mortgage carefully. Yes, payments come to you tax free but the debt on that asset is going up. This may be fine as long as you live and as long as you live there. Again, just know your options.
Red Flag #4. Tight-lipped lenders. Lenders who don’t fully disclose fees and terms are a big problem. As we’ve just seen in the sub-prime lending mess, many consumers didn’t understand what they were getting into. Some sleaze-ball lenders have gone so far as to work themselves into the deal to gain a large percentage of the property’s appreciation. Ask your lender if they are attempting to gain any percentage of the appreciation as part of their profit.
Red Flag #5. Forcing borrowers to buy additional financial products such as variable annuities. In this case, consumers can lose their principle and the earning potential of that money. Sometimes it’s alright to combine financial products but if you do, please double check the terms with someone who understands both types of products.
Red Flag #6. Numerous front end and back-end fees can be exorbitant. Artificially inflated fees raise the cost to the borrower and deflate consumer benefits fast. Oh yes, the definition of exorbitant can be debated all day long but that is exactly why you need to take the time to educate yourself, get several reverse mortgage proposals, and obtain advice from a trusted expert like your accountant, lawyer or financial adviser.
Red Flag #7. Reverse mortgage counselors imply that they are there to protect the interest of the seniors applying for the loan. This may be legitimate but if they present themselves as a counselor yet, have an affiliation with the lender; there is an inherent conflict of interest. Unfortunately the government still allows this practice. Your tax advisor doesn’t work for the IRS does he? Well then your reverse mortgage counselor should not work for the lender he is trying to protect you from.
Red Flag #8. Borrowers should not pay a referral fee for an agent just for the privilege of introducing you to a lender. That fee has been as much as 10% of the loan amount in some cases. Don’t pay referral fees or finder’s fees for reverse mortgages just find a new agent or broker.
Red Flag #9. You don’t know your lender. Laws and recourse vary from state to state. It’s a good idea to know your lender. Get referrals from family and friends and ask for references from the agent you are talking with.
Red Flag #10. HUD might be a DUD. You cannot assume that because Uncle Sam is guaranteeing some aspect of a reverse mortgage that it is safe or good for your situation. HUD does provide some helpful and free info on its website but it is very limited. If the sales rep says this loan is safe because it’s backed by the U.S. Government, don’t be overly impressed.
Red Flag #11. Information is withheld. When Total Annual Loan Costs (TALC) rates are not disclosed, be careful. When information is withheld and real costs and fees are not fully explained up front, there’s trouble on the horizon.
Red Flag #12. If a borrower’s ability to make a major decision is in anyway questionable, everyone including the agent, the lender, and family members should slow down and get additional professional assistance. If you are dealing with agents and lenders with any degree of integrity they will certainly offer any senior who doesn’t understand the consequences of the reverse mortgage, the resources and time to get more assistance. Families should work together to keep tabs on senior family member’s financial needs and lend a helping hand and a second set of eyeballs to major financial decisions such as reverse mortgages.
Red Flag #13. Alternatives to reverse mortgages are not known. There are several safe and secure alternatives that should be considered.
The bottom line to reverse mortgages is this. There are reverse mortgage alternatives beyond lines of credit or selling your home. Get the facts, recognize the red flags and take the time to do your homework.
Elder abuse is an ongoing concern when it comes to reverse mortgages or other financial products. The best way to fight this problem is to punish lenders who have no ethics and to teach seniors and their family members the facts and the alternatives. Families need to keep closer tabs on senior members and do the homework when it comes to reverse mortgages.
The Different Types Of Reverse Mortgages- Reverse Mortgage V
20
Sep
How you receive your money from a reverse mortgage depends on your age, your home value, how much you owe on the property and the type of term you choose. For instance you can get a lump sum, a li…
Gallegos Insurance Services- Reverse Mortgages In Santa Ana,
18
Sep
We Are Proud To Be Serving Our Community With Their Insurance Needs For The Past Decade. We Offer A Broad Variety Of Coverage Plans With A Focus On Health Care Policies. Call Today (714) 542-1478.
Reverse Mortgages and Retirement Planning
17
Sep
There is currently a lot of talk in the press about how reverse mortgages can be used to supplement your retirement income. Some sources advocate the use of reverse mortgages while others preach against them. First of all, reverse mortgages, like virtually every investment or financial decision, are good for some and bad for others. How they apply to you depends on your circumstances and what you’re trying to accomplish. Let’s set the record straight on reverse mortgages and retirement planning.
A reverse mortgage, as the name implies, is the opposite of a regular mortgage. Instead of making monthly payments on your home mortgage, the equity you’ve build up in your home over the years pays you. To qualify for a reverse mortgage you must meet two conditions: first, every person on the deed must be age 62 or better, and second, you must have enough net equity in your home to make a reverse mortgage loan feasible. The same lenders that offer traditional, or forward, mortgages also offer reverse mortgages.
A reverse mortgage is not related to your ability to repay the loan, having a job, your income or net worth. The only requirement other than being age 62 or better is that the equity in your home must be sufficient to justify the reverse mortgage loan. When you apply for a reverse mortgage you’ll go through the normal steps of obtaining a mortgage: an appraisal, title search, confirmation of insurance coverage, inspection, etc. The reverse mortgage closing costs can be taken from the loan proceeds so you can avoid out-of-pocket costs.
The interest on a reverse mortgage loan is accrued and added to your loan balance. Accordingly, the loan balance will grow throughout the life of the reverse mortgage; however, you have no personal liability to repay the reverse mortgage since the home is the only collateral for the reverse mortgage loan. If the home is not sufficient to repay the reverse mortgage loan, the shortfall is not your concern. When you pass on or move on, the loan can be repaid from the sale of the home with any shortfall being the responsibility of the lender and any excess going to you or your estate. The reverse mortgage can also be repaid by getting another loan, paying the balance from your savings or investments or the children/beneficiaries could repay the loan and obtain clear title to the home.
You cannot be evicted nor can the you be foreclosed as long as you are alive, living in the home, maintaining your insurance coverage and keeping the home in reasonably good repair. If you are married, the reverse mortgage loan is not repayable until the death, or moving, of the last spouse. You can take the reverse mortgage loan proceeds, less closing costs, as a lump-sum, installment payments or have a line of credit established with the lender that you can access at any time. There are no restrictions on how you can use the money from a reverse mortgage: vacations, new car, investments, vacation home, giving money to children, or whatever. Before reverse mortgages you had access to the equity in your home only by selling (and generally moving) or by refinancing (meaning payments would start all over again). This third option — reverse mortgage — is something you need to know about and consider should you ever need the equity from your home to help improve your retirement lifestyle. The reverse mortgage allows you to stay in your home and turn your home equity into spendable cash for other uses. The question is: why would you do a reverse mortgage? First and foremost, you might need the money for retirement or to cover an emergency. Secondly, a reverse mortgage could be incorporated into your estate planning by using the equity in your home to purchase a paid-up life insurance policy to pay tax-free death benefits to your children, charity or beneficiary. Third, you just might want to splurge and take an around-the-world vacation, buy that sports car you’ve always wanted or buy a second home on the lake rather than leaving the equity in your home to be fought over by the kids.
A better question is: why would you not want take a reverse mortgage loan? Many retirees use a reverse mortgage loan to finance investments. In fact, the reverse mortgage specialist helping you might even recommend making an investment with the loan proceeds. Generally, this is not a good idea because rarely will the return from the investments cover the interest and closing costs associated with the reverse mortgage. Far too often, a retiree will unlock the equity in their home using a reverse mortgage loan and then turn right around and buy a long-term investment that keeps their money locked up and out of their reach. This is generally a bad idea.
The one exception that oftentimes makes a great deal of sense is using the reverse mortgage money to purchase a guaranteed lifetime income to supplement your Social Security or other retirement income. A guaranteed lifetme income is generally obtained by purchasing an annuity from a life insurance company. Annuities now allow you to obtain a guaranteed lifetime income but still retain control of your money in case you change your mind about the lifetime income, need a lump sum to cover an emergency or get an opportunity to purchase a higher lifetime income should the economic/financial picture change. By using the reverse mortgage loan, which you do not have to repay during your lifetime, to purchase a guaranteed lifetime income you cannot outlive, you could remove the anxiety and fear of running out of money before your death. All the while you are assured of a place to live, no mortgage payments and the peace of mind of knowing that you’ll have a new income source for the remainder of your life.
The reverse mortgage loan is a great tool that can be used to improve your retirement and you definitely should learn more. But, before taking out a reverse mortgage loan make sure you have a sound reason and have a definite non-risky use for the money or need extra income to supplement your retirement income. If you simply want to “be prepared” just in case you need money for an emergency, leave the reverse mortgage money in a line of credit at the lender.
Generally, the costs associated with a reverse mortgage are no greater than you’d incur if you sold your home to free up the equity, but shop the market for the lowest closing costs. Also, there are several programs – some government sponsored while others are private – and you’ll want to review all your options. Again, don’t do a reverse mortgage just because you want to take the money and invest it hoping to “beat the market” or speculate you’ll make a higher return than the reverse mortgage loan is costing. Also, make sure you get professional help by talking to your banker or financial advisor before proceeding.
Have questions about your retirement investments? View questions and answers in our Expert Archive that we’ve given to others inquiring about their retirement investments: http://www.theretirementpros.com/ask_expert.php
Join Dr. Shelby Smith’s video seminar online (usually 10 min long or less) on safe retirement planning: http://www.theretirementpros.com/Tele-Seminar-MRM.php
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Demand For Senior Reverse Mortgages On The Rise
11
Sep
Property values are decreasing while the cost of living continues to climb. As interest rates and purchasing power steadily decline, those who are living on a fixed income are at financial risk.
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Reverse Annuity Mortgages
09
Sep
The reverse annuity mortgage was made with the purpose of giving senior citizens and easy way to tap into the equity in their homes. This type of loan has the lender paying the borrower every month rather than the other way around. This included with the fact that the loan is not paid for until the home is sold or the owner dies makes it a beneficial way for someone over the age of sixty two to get a hold of money without the fear of losing their home. Just like any other loan however you need to make sure this is the right choice before proceeding.
This type of loan similarly to a home equity loan can either be taken on in a lump sum, monthly payments, or in some cases in a line of credit. The main difference between this and a home equity loan is of course that the borrower will not have to pay back the loan in their life time unless they decide to sell the home. They will be able to continue living in the home for as long as they want.
This means that the home however cannot be willed to anyone since it will need to be sold in order to pay for the loan. There are cases that lenders will be willing to work something out with the family if they are looking to keep the home.
For more resources about mortgage rate or even about mortgage loan and especially about second mortgage, please review these links.