5 Requirements to Get a Reverse Mortgage To Fund Your Retirement

5 Requirements to Get a Reverse Mortgage To Fund Your Retirement

5 Requirements

to Get a Reverse Mortgage

To Fund Your Retirement

You’ve worked hard all your life and your planning for your retirement. The best way to do that is to have a solid, practical plan in mind. This calls for financial planning that is specific to you and your life.

 

First off, start with a list. Not unlike a grocery list. You know what you need and you know the few things that are a splurge you’ll get if the budget allows.

Ask yourself a few questions when making your list:

– What are your biggest priorities to have a comfortable retirement?

– What is your budget going to be like?

– Will you want to travel? If so, where and how often?

– How much do you want to leave your kids?

– What is your health like? Do you anticipate medical bills or increased insurance?

One financial product that can help you achieve your retirement goals is a reverse mortgage. If you qualify and if your home meets the criteria it can be a powerful financial planning tool for some families and individuals.

Just don’t be fooled by television commercials and magazine ads. There is much more to it than those sources suggest. Basically, owning a piece of property that is your primary residence can give you excellent options for funding your retirement.

 

It may be that you can leverage the equity you have in the home to make wise investments and ultimately help secure your desired lifestyle in retirement. You may even be able to do this without selling your home and moving elsewhere.

If you want the straight up details on reverse mortgages and wonder whether you should even consider one, here are 5 critical factors to know about a reverse mortgage:

1) A Reverse Mortgage is a Type of Home Equity Loan

The use of the term “mortgage,” which can be misleading. In reality, a reverse mortgage is a type of home equity loan. The amount borrowers can receive depends (to some extent) on how much equity is in their home.

With a reverse mortgage you are borrowing your own home’s equity. However, unlike regular home loans, no loan payments are due until the loan becomes due.

**To qualify for a reverse mortgage the home owner must have homeowner’s insurance, pay the property taxes and keep regular maintenance on the home.

These are things you probably already do but because the lender now has an interest in the property it’s a requirement to receive the loan.**

 

2) The Primary Borrower MUST Be 62 or over

The fact is, reverse mortgages aren’t right for or even available to everyone. One of the first questions you’ll be asked is how old the homeowner is. The borrower must be at least 62 years old.

Recent changes, according to the Consumer Financial Protection Bureau, now allow the younger (non-borrowing) spouse to live in the home should the borrower pass away first.

Although, it would be wise to have an attorney advice before moving forward with the signing.

3) The home MUST be the borrower’s primary residence

You can own additional property such as a vacation house. However, it means the home the reverse mortgage will be taken out on must be where the borrower lives most of the time.

4) One Day… The Loan Will Be Due

A reverse mortgage lets you live on (and enjoy) the equity you’ve built up in your home.

You can choose to use this loan for your living expenses in retirement or use it for other types of investments. Including, real estate and various financial products.

However, as with any loan, it must be paid back in the end. This happens when the owner dies or moves away from the home.

5) The Heirs

It’s important to note that your heirs have rights to the equity in the home. They can choose between keeping the home or selling it. There are conditions to each option though.

There are 2 options:

#1 – If the loan balance is less than the property value, they can take over the property by paying-off the loan balance. They can do this using cash or a new mortgage.

#2 – The heirs can sell the home and keep the equity remaining after paying off the loan.

However, if the loan balance is equal to or more than the value of the home, then the bank keeps the difference.

Your heirs then have the choice of paying 95% of the appraised value or the balance owed to keep the home, whichever is less. Or, they can choose to sell the home or let the bank keep it and owe nothing.

Is a Reverse Mortgage Right for You?

Statistically, less than half of all Americans are adequately prepared for their retirement.

That’s why the time is now to talk to someone who can help you figure it all out. You deserve to have a happy and stress free retirement.

The fact is this, you’ve spent years of accumulating equity in your home and it’s one of the most accessible sources of cash for retirement.

A secure future is within your grasp and Real Property Money Associates can help.

Real Property Money Associates has a group of dedicated individuals waiting to help you figure it out. Our consultations are always free.

We can help you plan a retirement strategy and help you understand exactly what a reverse mortgage is and whether it is right for you. Why? Because it’s not right for everyone.

We’ve lived and worked in the tri-state area all our lives.

We know the market. We know the mortgage business.

We’ve got connections with lawyers, realtors, insurance brokers and all the other professionals needed to get the loan done right.

Contact Bob Anselmo today –  516-850-1399

admin@realpropertymoney.com

What is a Reverse Mortgage & What Can it Do for You?

What is a Reverse Mortgage & What Can it Do for You?

What is a Reverse Mortgage & What Can it Do for You?

In a nutshell, a reverse mortgage is basically the opposite of a traditional home loan.

As you pay off a regular mortgage the smaller the loan becomes. With a reverse mortgage, the longer you have it, the larger it gets.

You may be thinking, home mortgages don’t work that way. And normally they don’t.

Reverse mortgages are fairly complex financial products that allow the home owner to borrow money using the equity in their home as security.

The home owners who are best served by this product are those over 60 years of age. A reverse mortgage can be one of the best ways to fund your retirement.

 

Question: So how does that work? Well, let me tell you.

The structure of a reverse mortgage can be underwritten to be paid out as either:

– a lump sum
– a regular stream of income
– a line of credit
– or a combination of these options

Interest is charged like any other loan, except you don’t have to make repayments while you live in your home. The interest compounds over time and is added to your loan balance.

This calculation will be the barometer used to determine the amount you can borrow against the home. Additionally, the age of the younger spouse is taken into consideration.

You remain the owner of your home and can stay in it for as long as you want.

However, you must repay the loan in full (all interest and fees included), when you either:

– sell the home
– die
– or move into an eldercare facility

 

Question: Who is best suited for this type of financial product?

It’s simple. The best candidates are people who have either retired or are soon to be retired.

Let’s look at an ideal reverse mortgage scenario:

There are 2 ideal candidates:

#1 – A retired person, 65 years old, who owns a lot of asset based wealth (mostly in their home) but has almost no available cash.

#2 – A senior citizen who’s looking for cash to supplement their pension or part time income. Someone who would have difficulty paying for their day to day activities in their golden years.

A reverse mortgage can be used to convert the current value of your home into available cash.

It’s best if the senior person owns their property free and clear although it’s not usually a problem if there’s a small balance remaining on the original mortgage.

Question: How much will it cost?

To set up a reverse mortgage it’s usually in the neighborhood of $1000 to $2000.

After that, the monthly fees may be $20 or nothing at all. This depends on many factors mostly on the lending institution you set up the reverse mortgage with.

Keep in mind, that the interest rates will probably be 1% or 2% higher than a regular mortgage because no monthly payments are required.

Also, in some cases, the receipt of a reverse mortgage may impact the homeowner eligibility for a pension.

However, like any other banking product, it’s best to obtain financial, as well as, legal advice before you move forward with a reverse mortgage. In fact, many lenders will insist on it.

Let’s break down the Pros and Cons of obtaining a reverse mortgage:

Pros

– The debt owed to the bank is normally capped at the market value of your home

– It helps mortgage free but cash strapped homeowners fund their retirement

– There are options for payouts (eg. regular payments, line of credit or lump sum)

– It could allow homeowners to stay in their homes, whereas they may have had to sell otherwise

– If you must, you can always sell your home and pay off the debt

Cons

– There are higher interest rates than on a regular mortgage

– The interest starts accumulating from the first day

– If you’re the sole owner, your spouse or other occupants may have to leave the property when you die

– The younger you are and the more you borrow against your home now, the less equity you’ll have in your home in the future

*****

There is a lot to consider when looking at signing on for a reverse mortgage.

Our associates at Real Property Money can help you. Our consultations are always FREE.

Contact us today: admin@realpropertymoney.com

Eldercare Financing

If your parents are over 62 and you’re concerned about how to help them you may want to consider a reverse mortgage for a whole lot of very good reasons.

If you’re the one over 62 you may want to consider eldercare financing with the equity in your home for a comfortable retirement.

Take a look at the many types of projects you can accomplish with a reverse mortgage:

– Home renovations
– Pay off your current mortgage
– Boost your retirement income
– Pay medical bills
– Help your adult child with a down payment on their first home
– And more…

In simple terms, a reverse mortgage allows you to take part of the equity in your home and convert it into cash. This is without having to sell your home or pay additional monthly costs.

With a traditional mortgage, you make monthly payments to the bank or lender. With a reverse mortgage, you receive the money but in most cases don’t have to pay it back for as long as you stay on the property.

The loan is repaid in one of 3 different ways:

– When you sell the home
– When you move or the property becomes your secondary residence
– When you pass away

Proceeds of a reverse mortgage are often tax-free. As well, there are usually no income restrictions when applying for a reverse mortgage.

There are three types of reverse mortgages:

Single-purpose reverse mortgages

Federally-insured reverse mortgages. Also known as Home Equity Conversion Mortgages (HECMs) and backed by HUD.

Proprietary reverse mortgages. These are private loans that are backed by the companies or group of lending institutions/individuals that develop them.

Single-purpose reverse mortgages are the cheapest but the most restrictive in terms of what you can use the money for AND they’re not available everywhere.

Single-purpose reverse mortgages can only be used for one purpose which will be determined by the government or nonprofit lender giving you the loan.

For example, the lender may state the money can only be used to pay for home improvements or repairs. The majority of homeowners, with low to median income, usually qualify for these loans quite easily.

HECMs and proprietary reverse mortgages are usually more expensive than regular home loans. The upfront costs can be high. However, HECMs are widely available, can be used for ANY reason and have no income or medical requirements.

Meeting with a counselor before applying for an HECM is mandatory. Often lenders for proprietary loans will require you see a counselor before hand too.

Exactly how muchyou can borrow from either an HECM or proprietary reverse mortgage lender depends on several factors. These include the homeowner’s age, the type of reverse mortgage you want, the current market value of your home, and interest rates.

In general though, the older you are and the more equity you have in your home, the more money you can get.

Contact us at: admin@realpropertymoney.com

Reverse Mortgages Are A Good Choice & Help For Flood Victims

Reverse Mortgages Are A Good Choice & Help For Flood Victims

REVERSE MORTGAGES

Do you have a home which is paid off? If so, you can use this to your economic advantage without losing equity or out of pocket costs. For example…

Do you want to finance your daughter and son-in-law’s first home, renovate your basement or invest in the stock market or mutual fund? If so, a reverse mortgage could be the advantage you’re looking for.

It wouldn’t cost you, the homeowner, anything in terms of value on your home and there would be no upfront costs.

We’ve been creating and executing unusual deals like this for 25 years. So, this arrangement is right up our alley.

We have investors and building professionals who can help you get the job done. We can provide 100% financing on a property, as well as, the labor and expertise to execute the job.

Not many companies offer this combination of money and know how. We’re the total package.

So, find out how a reverse mortgage can create an amazing financial opportunity.

Additionally, if you need a private lender to give you a hand let us know. We can help get your financial Life back on track!

Call Bob Anselmo at 1-516-850-1399 For a FREE Consultation

Bob will answer all your questions. He won’t waste your time either. Within minutes he will know if we can help you or not… and we usually can.

 

HURRICANE VICTIMS

Are you still suffering in the aftermath of Hurricane Sandy?

Was your home damaged or completely washed away during the store?

Are you still struggling to get insurance money? Do you have any insurance money coming at all? How are you living? Where are you living?

These are important questions and sadly many of the answers are tragic. We can help rebuild your Life and your home during this difficult time. Contact us to see how we can help you today.

Call Bob Anselmo at 1-516-850-1399 For a FREE Consultation

Bob will answer all your questions about reverse mortgages and hurricane and flood damage recovery. He won’t waste your time either. Within minutes he will know if we can help you or not… and we usually can.