< item kind="application/x-shockwave-flash" style="size:425 px; elevation:355 px;" data ="// www.youtube.com/v/w1tTIQ1EU6E?color2=FBE9EC&version=3&modestbranding=1" > Suze Orman discusses exactly how a Reverse Mortgage can help a loved one. If you want a Reverse Home loan in Colorado, telephone call Steve! He will certainly locate you the very best deal and also uphold you to earn certain you enjoy!
Most likely to his site at: http://www.ReverseMortgageInstitute.net or call -LRB-877-RRB- 854-1720.
Hello, and welcome to Your Money 2.0. I’m Justin Lally, a reverse mortgage specialist at Cambridge Credit Counseling Corp. Over the next 20 years, over 70 million baby boomers will be entering a retirement, and if current statistics are correct, a large percentage of these individuals are woefully underprepared. According to reports from Reverse Mortgage Magazine, only 38% of baby boomers had saved enough to get them through retirement. Although that statistic in and of itself is unsettling, a review of the overall retirement landscape is even more startling. Approximately 78 million Americans have no retirement savings plans. The sad fact is social security will do little to accommodate the financial circumstances of retirees, and many may need to rely on the equity in their home for survival.
Some of you may be saying, “That’s what Social Security is for.” Well, Social Security was never intended to be the sole source of income for retirees. Social Security was created to provide retired persons and with the resources to cover basic expenses. When it was established, the average life expectancy was 65 years old; however, the average lifespan for Americans has increased by almost 30 years. Needless to say, this has compromised the effectiveness of Social Security. The average senior citizen receives ,000.00 a month for Social Security; however, their median annual expenses are ,000. The math alone tells us we must do far more to build appropriate retirement funds.
For those of you who are retired, or will soon be, there are financial tools available to help you if your retirement savings are lacking. A reverse mortgage enables homeowners who are 62 years or older to convert part of the equity in their homes to subsides retirement. The unique aspects of a reverse mortgage can provide much needed funding without having to sell the home, transfer title, or take on a new monthly mortgage payment. In essence, a reverse mortgage is a regular mortgage reversed – instead of the homeowner making payments to a lender; they receive money from the lender. Reverse mortgage loan advances are not taxable, and generally don’t affect your Social Security or Medicare benefits.
There are three types of reverse mortgages homeowners can choose from, each with its own purpose. A Single-purpose reverse mortgages is generally the least expensive, and restrictive option. These mortgages are offered by state and local government agencies and nonprofit organizations. As is indicated by their name, this type of reverse mortgage can be used for only one purpose, which is stipulated by the lender. Homeowners can also apply for a Home Equity Conversion Mortgages (HECMs) which are backed by the U. S. Department of Housing and Urban Development (HUD). And finally, proprietary reverse mortgages are private loans that are backed by the companies that develop them. The proceeds from a HECM or proprietary reverse mortgage can be used for multitude of options including supplemental retirement income, home repairs, meeting healthcare needs, preventing foreclose, and so on.
Before applying for a HECM, and some proprietary reverse mortgages, you must receive a counseling session as a condition of financing. The counselor must review additional options available to the homeowner, including home equity conversion options currently available. Furthermore, the counselor will discuss the financial implications of entering into a reverse mortgage, including tax consequences and the impact of a reverse mortgage on the homeowner’s estate. Most counseling agencies charge around 5 for their services, and the fee can be paid from the loan proceeds.
Just how much can a reverse mortgage add to your retirement portfolio? The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, and the lower the interest, the more you can borrow. To learn more about reverse mortgages, please visit www.aarp.org/revmort, a website established by AARP’s Reverse Mortgage Education Project or contact your local HUD Certified Housing Counseling agency. Well, that’s it for this edition. As always, we welcome your feedback and ask for your thoughts and suggestions by e-mailing us at email@example.com. Thank you for watching. Until next time, I’m Justin Lally for Cambridge Credit Counseling. Video Rating: / 5
Want to know how much you would qualify for?
“How Does a Reverse Mortgage Work?” is clearly and simply explained in this short video. Completely understand HECM in 4 minutes.
Hi, I’m Deborah Nance and today we’re going answer the question – “How Does A Reverse Mortgage Work”
So here we go. First the lender must determine the loan amount. They will use a formula set out by FHA that takes into account the value of the home, the age of the borrowers and the current interest rates to determine the loan amount.
Once they know what you qualify for, then they will want to know how you would like recieve your loan funds. The closing costs of the loan will be rolled into the loan itself. This means you will have a starting balance equal to those costs plus any other funds you decide to take at closing.
Perhaps you have your home paid off and do not need to have all of the loan money right now. You could choose to take the loan proceeds in the form of TENURE, (a monthly payment for as long as you live in the home.) In this scenario, on the first of every month you would recieve tax free funds from the lender. Each month you would also recieve a mortgage statement showing you the prior month’s loan balance, the amount of the payment to you, the amount of interest and insurance charged and the new loan balance.
Or perhaps you would like to have all the loan funds ready and available as you need them, in a line of credit. In this scenario, you would receive a statement each month from the lender showing the existing loan balance, and the amount of funds previously available in a line of credit. The statement would also show any withdrawals you made from the line of credit the prior month and the new available line of credit.
One of the coolest features of this particular scenario is that the line of credit on a reverse mortgage grows over time. The amount available to you in a line of credit grows at a rate equal to the rate charged on the loan itself, plus 1.25%. So, a reverse mortgage line of credit in the amount of 0,000 today could be 4,000 plus next year. That is a great incentive to limit your withdrawals for emergencies building up the line of credit over time so that when you are 70,80, or 90 and really need the funds for home health care or other emegencies, you have more to draw from.
Another scenario would be to take all the money right now. Maybe to make a major purchase, like a second residence or investment property.
The last (and most popular) scenario is to combine the different payout options. Perhaps taking some funds at closing to payoff other debts and leaving the rest of the proceeds in the growing line of credit. It’s your choice. I have had clients who choose some cash, some line of credit and a tenure payment as well. It’s up to you.
If you currently have a traditional or forward mortgage, you can use the reverse mortgage to pay it off. In fact it is required by the lenders that any existing mortgages on the property must be paid off with the reverse loan proceeds..
You know the bank is going to make money on the Reverse Mortgage, right? They’re a bank, that’s what they do. I mean really!… they’re in those big tall buildings downtown and they are happy to make money off the millions of us living in our little home sweet homes.
Basically, the banks and investors are just very patient. They wait. They wait until you die, sell, or permanently leave the home due to medical reasons. Then all the funds that have been borrowed, plus all the accrued interest and insurance is due and payable. Usually the heirs will sell the home, payoff of the reverse and keep the change. But, if the home does not have enough value to payoff the balance, then what? This part is pretty cool….The reverse mortgage is a non-recourse loan. This means if the proceeds from the sale of the home are not sufficient to payoff the mortgage the bank has “NO RECOURSE” to the borrower (or their heirs) for the shortfall. So, the worst that can happen is that your kids get nothing from the home when you pass away.
Well that took a little longer than I thought, so thanks for sticking with me.I hope you found it to be helpful. I’d appreciate you leaving a comment and any other questions you might have in the comments section below. I’ll be answering more questions in the following weeks so don’t forget to Subscribe to my YouTube Channel and be notified when a new video is released.
If you want to know specifically what you or your parents might qualify for on a reverse mortgage, please click on the link below to provide me with the basic information needed for an analysis. You’ll have your numbers in no time at all!
The postings and opinions on this site are my own and do not necessarily represent the position of my employer.
Deborah Nance, NMLS#202003 Equal Housing Lender
If you are a senior, who thinks that it is not that important, which reverse mortgage interest rate you select, because nothing will be paid back during the running time, please change your attitude right away! The interest rate is one of the costliest element in the final costs.
1. The Longer The Running Time, The More Difficult Is The Predict The Rates.
The interest rate is the cost of the money, which the lender uses to pay his interest rate, the operating costs and the profit. The central banks regulate the economy with the interest rate. When the rate is low, the borrowers take more loans and when it is high, the demand of the loans decreases. The loan amount influences on the operating costs of the borrowers and thus to the whole economy.
We can quite sure say, what is the reverse mortgage interest rate for the next year, but it is quite difficult to predict the average rate for 20 years, for example. Here also the history is not a good source of prediction, which we have seen during the finance crises, for instance.
The longer is the running time of the reverse loan, the more difficult is to predict the development of the economy and thus the interest rate. But if the borrower uses his or her own, strong idea of the rate development, then he may trust on that.
2. The Variable Rates And The Risks.
the variable rate means, that the rate follows some index during the running time of the loan. This means, that the rate can exceed the fixed rate alternative, but also be below that. This rate is for a risk taker, who trusts that the market rates work better, than the fixed rates.
3. The Fixed Rates And The Risks.
The good feature of the fixed rate is, that the borrower knows in advance, how much the rate will be for every single year of the running time. This helps the financial planning and gives quiter nights. If the borrower is interested, he can calculate afterwards, what would the difference have been between the variable and fixed rates.
4. Remember, That You Pay Interest On The Top Of The Earlier Interests.
Because with the reverse loan nothing will be paid back during the running time, all costs will be accumulated. This means, that the total loan amount includes the original capital, all earlier interests and costs and fees. So the borrower pays interest, which is calculated every year, or month, based on the total loan amount, which he owes.
5. Trust On The Idea, Which Fits To You.
Because nobody can say, what reverse mortgage interest rate is better for the whole running time, the solution to select one is to trust on your own idea. If you want the risk free alternative, then your choice is a fixed rate, but if you think, that the variable market prices fit to you, then the variable alternative is for you. It is wise to talk with the reverse loan counselor or your bank manager to get the expert view also. However, the responsibility is always with the borrower.
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Are reverse mortgages really a good option for cash strapped retirees?
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With a reverse mortgage, seniors have the ability to stay static in their homes as long as they want and never have to sell their property and take in new monthly mortgage payment. Seniors won’t under any conditions resulting from reverse mortgages, be required to keep their houses providing they generate their real estate property income tax and insurance coverage repayments and keep the residence in reasonable problem.
In addition, unlike other your retirement tools or mainstream loans, there is absolutely no income qualification with a reverse mortgage. Consumers aren’t expected to make monthly home loan repayments on a reverse home loan through the entire life of the loan. The mortgage becomes repayable as soon as the final borrower on subject offers the home or forever moves completely. In addition, the repayments amount wont exceed the fair market worth of home.
Many homeowners become enthusiastic about reverse mortgages for them to repay their existing mortgages, equity financial loans and high interest charge cards. Attempting to sell and moving somewhere else aren’t really attracting most seniors. In fact, many senior grownups prefer to enjoy their pension in comfort of the home.
Unfortunately, seniors usually discover that unforeseen problems, increasing debt and diseases make remaining in the house difficult. For seniors residing on a fixed income, unforeseen and increasing costs may be financially crippling. Usually seniors tend to be forced to lower their quality lifestyle or sell their house. Luckily, with a reverse home loan seniors are able to augment their particular pension earnings and stay in their home for a lifetime.
The single simplest way to guage a reverse mortgage would be to compare it from what might be your only real choice: attempting to sell your house and with the proceeds to buy or hire a brand new house. Do you realize:
How much cash you can get by attempting to sell your home?
* exactly what it might cost to get (and maintain) or hire an innovative new house? * How much money you might safely earn on any money left when you purchase a fresh house? * maybe you have recently looked at purchasing a less expensive residence, renting a condo, or moving into assisted lifestyle or other alternate housing?
Until such time you have experienced and considered other housing choices, how will you understand that another housing choice wouldn’t be much better for your needs than a reverse home loan? For your needs own satisfaction, explore what else might be available. It doesn’t harm to explore any options before deciding.
Most likely you will definitely visited one of two conclusions:
* you might find another housing alternative that is more appealing than you thought; or * you could confirm that which you had been fairly certain of all along: that where you live now is a good option for you to be.
Regardless of what you conclude, you’ll have a much better concept of the entire expenses – and benefits – of keeping versus going. That provide you with a significantly better feeling of what’s key to you. Then it should be simpler for you to guage the expense and great things about a reverse home loan.
Kaye Reverse manages Reverse Mortgages for its many senior clients in Michigan. To see if a reverse home loan suits you and you are a Michigan home owner log onto: http://www.kayereverse.com/dvd.html to get the COMPLIMENTARY DVD.
A reverse mortgage might sound like a good idea when you hear the ads on TV. But like everything else that’s too good to be true, there’s a ton of fine print and strings attached. Here are many reasons why you should just say no to a reverse mortgage.
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For information on Aging in Place, Reverse Mortgage options, paying for home health care and other useful tools for keeping a place to live for the rest of your life, visit http://www.charlesguinn.com. Call Charles directly at (310) 616-6965
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http://www.flickr.com/photos/137713708@N03/24297182062″> All Reverse Home mortgage 1 . Understanding Home owner finds out about reverse mortgages from an information short article, ad, word of mouth etc.
2. Upfront Education Homeowner contacts a reverse home loan lender to get more information concerning reverse home mortgage programs. Ask for a reverse home mortgage calculator or full totally free, no obligation evaluation from Kaye Financial.
< br/ > 3. Counseling Home owners look for therapy from a regional HUD authorized therapy agency, or a nationwide counseling agency, such as AARP (800-209-8085) Money Management International (MMI, 877-908-2227) or National Structure for Credit score Therapy (866-698-6322). Therapy is required for all reverse home mortgages and is conducted by telephone.
< br/ > By legislation a therapist must evaluate (1) alternatives other compared to a reverse home mortgage that might be readily available to the potential debtor, including housing, social services, health and monetary alternatives (2) other residence equity conversion alternatives that are or may appear to the possible borrowers such as real estate tax deferrals (3) the financial implications of becoming part of a reverse mortgage and (4) the tax effects impacting the borrower’s eligibility under state of government programs as well as the influence on the estate for his or her successors.
4. Application/Disclosure Homeowner submits a loan application as well as picks a payment plan, whether fixed monthly payments, lump sum repayment, line of credit history, or a mix of these. Loan provider reveals to property owner the estimated overall expense of the loan as called for by the government fact in Offering act. House owner gives lending institution with required information, including verification of Social Security number, copy of deed to home, info on any current home mortgage(s) as well as therapy certificate.
< br/ > 5. Processing < br/ > Loan provider orders an assessment, which the home owners spends for, to place a value on the house. The appraiser ensures the physical condition of the home meets the FHA guidelines. If any structural defects are discovered, the house owner must work with a service provider to complete the repairs after the reverse mortgage shuts.
6. Underwriting After obtaining all essential details and data, loan provider finalizes loan specifications with resident (i.e., figuring out settlement choice, regularity of lending rate of interest changes) and also sends car loan plan for last approval. It can take anywhere from 4-8 weeks (occasionally quicker, in some cases longer) to finance a loan package.
< br/ > 7. Closing If the loan package is accepted, closing (signing) of loan is scheduled. Passion prices are determined. Closing documents as well as final numbers are prepared. Closing prices are generally financed as component of the funding. Lender or title business has property owner authorize the finance documents.
8. Dispensation Homeowner has three company days after signing papers in which to cancel the lending. After expiration of this period, the car loan funds are paid out. Property owner accesses the funds through settlement alternative selected. Any kind of existing financial obligation on the residence is repaid. A new lien is tied on the home. The house owner could make use of the car loan earnings for any kind of function. The finance “servicer” manages the account and also is responsible for disbursing month-to-month repayments to the property owner (if this option is selected), progressing line of credit score funds after demand, gathering any kind of repayments on the line of credit, as well as sending routine declarations.
< br/ > 9. Settlement House owner does not make any monthly repayments throughout the life of the financing. The funding is paid off when the homeowner discontinues to inhabit the residence as a principal residence. The loan could be repaid by the homeowner or the heirs/estate, with or without a sale of the residence. The settlement responsibility can not surpass the residence’s value or list prices.
Kaye Reverse deals with Reverse Home mortgages for its numerous elderly customers in Michigan. To see if a reverse home mortgage is best for you and also you are a Michigan property owner log into: http://www.kayereverse.com/dvd.html and obtain the FREE DVD.
Seniors counting on securing the most money they can from a reverse mortgage need to act now while interest rates are low and loan limits are high, according to Jim Cory from Legacy Reverse Mortgage.
The amount of cash available to homeowners through a reverse mortgage is limited by federal regulations. For now, the Federal Housing Administration (FHA) has decided to leave the limit at $ 625,500, but industry experts believe that could change come next year.
In response to the financial crisis, the FHA raised the maximum amount a reverse mortgage borrower’s property value could be calculated at from $ 417,000 to the current level in February 2009. FHA officials had previously announced that loan maximums would revert back to pre-February levels on October 1, 2011.
However, they now say the higher limit will likely remain in place at least through the end of the year.
October 1 is the beginning of the government’s fiscal year. Historically, officials make changes to many programs effective that day. So there is a possibility for seniors counting on maximizing the amount of money they can receive could be in for a disappointment if they wait too long.
Many industry experts expect to see a number of changes from FHA in the next six to twelve months.
These same industry experts believe that by acting now while interest rates are at records lows, reverse mortgage borrowers will maximize their options.
Regulatory uncertainty is only one factor driving seniors to consider locking in a reverse mortgage sooner rather than later. Low interest rates allow homeowners to unlock the most equity from their homes, while 10-year Treasury notes, a key industry benchmark rate, sit at historic lows.
In many areas, home values are continuing to decline. Since reverse mortgages limits are contingent on property appraisal amounts, borrowers are looking to lock in higher values before the real estate market gets potentially any worse.
The industry is doing all it can to help keep the higher loan limits so that seniors can get the most benefit from their homes.
Peter Bell, president of the National Reverse Mortgage Lenders Association has said, “We’re glad to see FHA take this interim step. It eliminates uncertainty for loan applicants who might have been concerned about not getting their loans before the limits possibly dropped.”
The focus now, according to Peter, will be on persuading HUD and lawmakers to retain the higher limit beyond calendar year 2011.
Since loan limits vary in some parts of the country, it’s also important that seniors considering a reverse mortgage contact a loan specialist to learn about the specific benefits available for their unique situation.
If you’re a California senior interested in learning more about securing the most money your home equity can afford you through a reverse mortgage, please take a moment today to call and speak with a Legacy Reverse Mortgage representative by dialing (800) 991-4613.
Legacy Reverse Mortgage offers Senior Reverse Mortgage services in California. If you’re a California senior interested in learning more about securing the most money your home equity can afford you through a reverse mortgage, please take a moment today to call and speak with a Legacy Reverse Mortgage representative by dialing (800) 991-4613.