Posts tagged with 'Reverse Mortgages'

Reverse Mortgage Information – Who Qualifies For Reverse Mortgages

  • Posted on September 20, 2010 at 9:17 am

Reverse mortgages can be a great solution for seniors who wish to remain in their home but are having difficulty making their monthly payments and meeting other financial obligations. If you are over age 62 and own your own home, the bank will actually pay you money so you can stay in your home, rather than the other way around. It is important to collect as much reverse mortgage information as possible before deciding whether to take out the loan.

Anyone is eligible for a reverse mortgage loan, even if they have no income. Your home must be a single family residence in a one to four unit dwelling, a condominium or some type of manufactured home. Cooperatives and most mobile homes are not eligible. The home must be at least one year old and you have to first meet with an authorized counselor.

You can obtain the loan as a lump sum payment, a fixed monthly amount or as a line of credit that you use whenever you need it. The money can be used for just about any purpose. This can include paying property taxes or medical bills, home repairs and improvements, paying off credit cards or just daily living expenses. The amount of money you receive depends upon your age, the amount of equity in the home, its appraised value and current interest rates. The reverse mortgage loan does not have to be repaid until you sell the home, permanently move out, or pass away. Your loan could also become due if you allow the property to deteriorate, you fail to pay property taxes or hazard insurance, or if the last surviving borrower does not occupy the home for 12 months in a row due to illness.

There are some fees involved with a reverse mortgage loan, similar to those you would incur with a regular mortgage. These include origination fees which cover the lenders operating expenses and are currently capped at the greater of 2,000 or 2% of the maximum FHA loan limit. In addition you will be required to take out mortgage insurance and pay an appraisal fee which ranges between 300 – 400. Other closing costs include fees for a credit report (usually under 20), flood certification, closing and title search, document preparation, recording, courier, pest inspection and a land survey. In addition, a monthly service set-aside fee of 30-35 per month will be charged.

When you meet with your counselor, you should be able to obtain all the reverse mortgage information you require before you make your final decision. It will be nice to have the option of staying in your own home if that is what you desire.

Reverse Mortgages- Seek A Mortgage Calculator

  • Posted on August 30, 2010 at 9:17 am

If you are like most retired adults, you own a home but have very little else for retirement. However, if you sell your house, you won’t have a place to live! So here’s your problem: you need money to live on, but the only thing that you own of value is the place you live.

A reverse mortgage can give you the answer to a common retirement dilemma. This option sells your house piece by piece, instead of all at once but you will get to live in your home. You can use a mortgage calculator to determine the monthly cost of home equity loans or refinancing. Also, you can use this mortgage calculator to figure out how much your loan would cost you in total.

First, get in touch with a real estate agent. They will be more than happy to tell you how much your home would sell for, and how to increase its home equity. Depending on your level of knowledge and the time you can spare, this could pay off handsomely. Reverse mortgage will pay you is based on your home’s value. So, if there is an opportunity to increase the value of your home by doing some home improvements, get it done before applying for a reverse mortgage.

Use a mortgage calculator to find out if you should get a home equity loan or a reverse mortgage. The mortgage calculator will tell you how much a home equity loan would cost you between the time of your repairs and the reverse mortgage. But be careful. Don’t spend more than it is necessarry to renovate your home. Also, if you fancy something about your house, do not alter it. After all, you still get to live in it.

Now that you are aware of how much your house is worth, it is time to look into a reverse mortgage loan. You can use a special mortgage calculator to find out how much each different loan would give you. This mortgage calculator bases its results on four things: your age, your house’s value, your house’s location and your lender. More than one company offers a mortgage calculator, so it is best to check with AARP to see if it is a valid program. The mortgage calculator on their website is very easy to use and is a good place to start.

Once research is completed, it is time to contact a professional. The real estate agent that you spoke to before should be glad to give you a list of good lenders and mortgage brokers and walk you through the process. Read every document. Ask questions about anything that you don’t understand. And you will be able to receive a check instead of paying a mortgage every month

Reverse Mortgages Eligibility Information

  • Posted on August 23, 2010 at 9:17 am

Reverse mortgages can be a great solution for seniors who wish to remain in their home but are having difficulty making their monthly payments and meeting other financial obligations. If you own your own home and is 62 years of age, the bank will actually pay you money so you can stay in your home, rather than the other way around. It is crucial to collect and understand as much reverse mortgage information as possible before deciding on whether to take out the loan.

Your home must be a single family residence in a one to four unit dwelling, a condominium or some type of manufactured home. While ccoperatives and most mobile homes are not eligible for this type of loan. The home must be at least one year old and you have to first meet with an authorized counselor.

The loan can be obtained as a lump sum payment, a fixed monthly amount or as a line of credit and the money can be used for just about any purpose such as paying property taxes or medical bills, home repairs and improvements, paying off credit cards or just daily living expenses.

The approval of loan amount depends upon your age, the amount of equity in the home, its appreciated value and current interest rates indications.

The reverse mortgage loan does not require you to pay anything until you sell the home, permanently move out, or pass away. Your loan could also become due if you do not maintain as agreed or you fail to pay property taxes/ hazard insurance and if if the last surviving borrower does not occupy the home for 12 months in a row due to illness.

The fees involved in a reverse mortgage loan are quite similar to those you would incur with a regular mortgage. These include origination fees which cover the lenders operating expenses and are currently capped at the greater of $2,000 or 2% of the maximum FHA loan limit. Apart from that you will be required to take out a mortgage insurance and pay an appraisal fee. Other costs include fees for credit reports (usually under $20), flood certification, closing and title search, document preparation, recording, courier, pest inspection and a land survey. In addition, a monthly service of $30-35 per month will be charged.

Your counselor will be your principal guide to getting correct information on reverse mortgages and should be consulted for advise before making final decisions.

Reverse Mortgages Benefits From Fed Governments

  • Posted on August 16, 2010 at 9:17 am

Reverse mortgages are increasing in popularity as a way to turn home equity into a liquid asset. Before you jump on a reverse mortgage, you need to understand the impact it can have on government benefits.

The beauty of home ownership is found in the value of time. The longer you own a home, the more valuable it become. On one hand, you are paying off the mortgage over time, which is increasing the equity you have in your property. The other finds your real estate appreciate over time. This double whammy is what makes home ownership so attractive.

Retirement and old age will become an issue when you need to convert your home equity into usable cash. Reverse mortgages are touted as a solution. A reverse mortgage is a loan against your equity that does not need to be repaid until an event happens, usually the sale of the home or your death.. Essentially, you have reversed the process of a traditional mortgage. The lender is now giving you money in exchange for a piece of your home equity. Payments are expedited in lump sums, monthly or through credit lines depending upon the particular package you go with. As the clock ticks, the equity in your home is reduced, but you will have a reliable and predictable monthly revenue source.

Over the years, the fed has tried to find ways to reduce the amount of benefits they pay out to citizens. One of the factors they like to use is the asset value you hold. If you have a certain amount of assets, your benefits are reduced or terminated because they government takes the position you do not need them. An analysis of government benefits is beyond the scope of this article, but reverse mortgages have an impact.

Basically, be assured that taking a reverse mortgage on your home will not affect Medicare or social security benefits. This is true, however, only so long as you spend the full amount you receive each month. The government is always playing with benefit issues, so make sure you get up to date information on the situation. You will want to understand what you are getting into, particularly if you rely heavily on Medicare for the payment of medical bills.

In general, reverse mortgages do not impact most government benefits. That being said, make sure to get an informed opinion on exactly what will happen before you agree to a reverse mortgage.

Reverse Mortgages Basics

  • Posted on August 9, 2010 at 9:17 am

Reverse mortgages are loans against your home that require no repayment for as long as you live there. As opposed to traditional mortgage loans, reverse mortgages does not require proof of income and are based solely on the equity of your home. There are no monthly payments to make as the mortgage will only due when the borrower moved out from the property or in the event of death.

US seniors over the age of sixty two are eligible for reverse mortgages provided they have their own single family dwelling. No health requirement is needed, and you get to keep your Social Security and Medicare benefits if your reverse mortgage is approved. Some benefits, however, such as Supplemental Security Income (SSI) and Medicaid can be reduced under specific circumstances. Tax liability for monies received through a reverse mortgage are a non-issue, as loan advancements are not taxed, although interest on the loan is consequently not tax deductible.

There are no income requirements to be eligible for a reverse mortgage loan. You may be eligible for a reverse mortgage even if you still owe money on an existing mortgage. The reverse mortgage loan must be substantial enough to pay off the existing loan completely, however.

The benefits of a reverse mortgage include increased cash flow almost immediately while many other options are on a fixed monthly income. This way it will fully utilize the equity value in your home. Several options exist to help seniors to plan for their advances so that they can fit into their budgetary concerns and cash flow needs.

Most may feel that borrowing against their home is a risky action to take, especially when they are in their twilight years.
Since they are not borrowing against future income, reverse mortgage does indeed hold minimal risk and many who choose this type of mortgage are able to enjoy what they have worked all their lives for in their post retirement years.

Reverse Mortgage is For You

  • Posted on July 19, 2010 at 9:17 am

Seniors would want to enjoy their golden years but are usually left stranded with decreasing income or the inability to increase their monthly income. One of the better ways to overcome this problem is by obtaining a loan called a reverse mortgage. A reverse mortgage enables homeowners older than sixty two years of age to convert the equity in their homes into tax-free income while they continue to live in that property. Seniors will be paid by the lender according to the current value of the property, in contrast with a traditional mortgage where monthly payments are made to the lender.

How do you know if a reverse mortgage is right for you and that you would not end up sleeping on the streets? Reverse mortgages are indeed an excellent option for many living in their twilight years, but will take careful planning and consideration. Since the pay out terms can be structured in a variety of ways, it is essential to look at the amount you are able to get from your home and your long term financial needs.There are of course no restrictions on the use of funds, meaning you can do anything you like with the proceeds of a reverse mortgage, including home improvements and daily expenses.

Reverse mortgages won’t affect regular Social Security or Medicare benefits. MedicAid eligibility may be affected in some instances. Counseling is a mandatory for those who wish to apply for a reverse mortgage. Look for a counselor from a government sponsored lending agency if you need them to answer all your questions convincingly or those related to benefit reductions.

Reverse mortgages is a very effective method in supplementing your post retirement income but you must be aware of how the pay out structure can positively lessen your worries on the long term financial picture. Make an informed decision. Simply view all the information available before taking up a reverse mortgage. The good news is for those who have paid the majority or their entire home, their post retirement lifestyle need not be hampered by a lack of cash flow.

Reverse Mortgage In A Nutshell

  • Posted on July 12, 2010 at 9:17 am

Reverse mortgages are becoming popular among the senior citizens. They give seniors cash in lieu of the part ownership of their home property

If you want to go for a reverse mortgage, the information below will help you:

For senior citizens above 62 years, lenders offer instant cash without any monthly repayments by converting the equity that has been build up overtime in the seniors’ home into cash.

This mortgage allows you to stay in your own home and get a monthly income which will help you sustain a comfortable standard of living.

The cash received from the mortgage is non-taxable since it is a loan and not income. The advantages seem to be very attractive but in the long term the risks far outweigh the benefits. Unlike a traditional mortgage, the lender pays you money based on the equity in the home. The lender will of course impose some strict conditions on you. You can only get a reverse on a primary residence. If you die, sell home or move out from your existing residence, you need to pay back the loan along with the accrued interest. To do that, you will have to sell off the home. Besides, if you want to leave the house as an inheritance, you will not be able to do so.

How much mortgage will I get?

You can get any amount between 10 to 40% of the value of home obtained after appraisal depending on your age, the present rate of interest and the value of the property.

Online reverse mortgage quotes can be obtained through the internet. There are lots of reverse mortgage websites,whether it be a fed site or a private lender site, which would be useful to you.

Reverse Mortgage Benefits To Seniors

  • Posted on July 5, 2010 at 9:17 am

Reverse mortgages are available through lenders insured by the federal government and can be of great benefit to those who are eligible to apply. There are three types of reverse mortgages currently available in the United States, including Home Equity Conversion Mortgages (HECM), Fannie Mae (FNMA) Home Keeper and Financial Freedom Cash Accounts. The basic premise of a reverse mortgage is that it allows homeowners over the age of sixty-two to convert part of the equity in their homes into tax-free income without having to sell the home, give up the title to the home, or take on a new monthly mortgage payment. The reverse mortgage is titled as such because lenders pay the borrower fixed payments or a lump sum over time as opposed to a traditional mortgage arrangement. Properties that are eligible include single-family dwellings, manufactured homes built after June 1976, town houses and condominiums.

The process for applying for a reverse mortgage is more involved than with a traditional mortgage. Aside from meeting the age and property type restrictions, applicants must discuss the loan with a counselor employed by the U.S. Department of Housing and Urban Development before the signing of the terms agreement. There are 5 different types of payment methods for each fed government insured loans, allowing for flexibility to meet the needs of the applicants. These include monthly, quarterly, semi-annual and annual payments to the borrower for a fixed number of periods or a lump sum that can be invested.

Like traditional mortgage, the interest rates can vary accordingly. Those who choose variable rate mortgages will pay over one percent less since the risk assumed by the borrower for agreeing to monthly adjustable rate calculations can greatly increase their risk over the life of the mortgage. The mortgage is due when the house is no longer occupied by the borrower and will be paid by the borrower or heirs in the event of death.

While many consider borrowing to be a bad idea later in life, reverse mortgages simply allow seniors to enjoy the equity they have already established without carrying the risk of having to meet monthly payments while on a reduced or fixed income. This can substantially increase the quality of life for many older Americans and allow them to enjoy the fruits of their life long labor.

Reverse Annuity Mortgage

  • Posted on June 21, 2010 at 9:17 am

Reverse annuity mortgages (RAM) were created to allow senior Americans to tap into the equity of their paid for or nearly paid for home. Homeowners receive a tax-free payment each month, with the mortgage paid out and when the home is sold. Before you choose a RAM, make sure you have evaluated the risks since this option can limit future housing plans.

Types Of Reverse Mortgages

RAM programs are developed by HUD.To be eligible you must be 62 or older, use the property as your residence, and have paid off your mortgage in full. The fed government will then insure your mortgage.

You might want to talk to private lenders as an option. You will want to review their terms and conditions very carefully to be sure that you are getting the full value of your home and not paying unnecessary and exhorbitant fees.

Both types of RAM will never let you owe more than what your home is worth. When you decide to move out of the property, the loans principal, interest, and fees will be due and any equity remaining from the sale of your home will be yours or can be based onto heirs.

Difference Between A Reverse Mortgage and A Home Equity Loan

The major difference between a RAM and a home equity loan is when the loan balance is due. With a RAM, the mortgage balance will need to be fully paid once you stop living in the property. You dont have the monthly payments of an equity loan and it is much easier to qualify for the mortgage since you dont have to show any prove of income to make monthly payments.

Payouts Options

There are several payout options that you can choose from. A ‘tenure policy’ provides equal monthly payments to the borrower as long as he or she lives on the property itself. A “term policy’ gives fixed monthly payments for a set period of time. A line of credit enable the borrower to withdraw funds only when needed. A modified tenure combines a line of credit with life long monthly payments while a modified term provides a line of credit with fixed monthly payments.

Beware Of Scams

There are several scams related to reverse mortgages that you should be aware of. You should not pay thousands for information about a RAM and should get them from HUD and legitimate mortgage lenders. You should also avoid any terms that require payments before you sell or that sell your house within so many years.

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