Retirees need sufficient income to get them through their golden years. If your home is your largest asset, though, what do you do?
The FHA started the reverse mortgage program for seniors just like you. Unlike a traditional mortgage with required monthly payments, the reverse mortgage pays homeowners age 62 and older some of their home’s equity. You may choose from a lump sum payment, monthly payments, a line of credit, or a combination.
In the last few years, the media ran wild with horror stories of scam artists taking advantage of seniors with reverse mortgages, but they’ve come a long way. Today, the reverse mortgage program offers seniors access to their funds without selling their home.
(BPT) – Across the nation, thousands of seniors have used a Home Equity Conversion Mortgage (HECM), commonly called a reverse mortgage loan, as a savvy way to access the equity in their homes as part of their retirement strategies.
Those who are interested in a reverse mortgage loan should know that there are six main phases to the process: 1) educating and qualifying 2) counseling, 3) approval, 4) funding, 5) using and 6) settling.
1. Educating and qualifying
The HECM process begins by contacting an FHA-approved lender who will review the borrower’s situation, educate them on the HECM program, and determine if they would likely qualify for a reverse mortgage loan. This is a controversial type of loan and must be carefully considered as a part of your retirement strategies.
“Once the lender has determined that the borrower is eligible, they work closely with them to shape the loan so it fits their needs,” says Paul Fiore, Chief Sales Officer for American Advisors Group, the leading reverse mortgage lender in the nation. “At AAG, this is a highly personalized process View full post…
How To Know If a Mortgage Refinance Is Your Best Option?
When interest rates are low, applications for a mortgage refinance are a major portion of the total of all mortgage applications. This is due because when mortgage interest rates fall, many borrowers see an opportunity to restructure their debt hoping to get a more favorable rate or term.
Simply having a drop in mortgage interest rates doesn’t mean that its the right thing to do for everyone. We all have different situations and lifestyles and everyone doesn’t fit into the “average” cookie cutter mold. Because of this, the following 9 points may help you if you are considering refinancing your mortgage.
The equity in your home
Equity is one of the first items that a refinance lender will look at. If it’s not there within the banks’ guidelines, most conventional lenders will decline your request. During the last recession, many homeowners were underwater, some very deep.
The value of homes has been rising as of late and the number of underwater loans has dropped. This varies from state to state and is determined by a number of factors. If your home has little equity, a conventional lender probably View full post…
How Does Reverse Mortgages Program Work? – The Ultimate Guide
If you’re getting near retirement age you may have come across this financial product. Just about everyone asks the same question, just how do reverse mortgages program work? They continue to grow in popularity and the basics are relatively simple.
A reverse mortgage is designed for senior adults getting near retirement or already retired. Its similar to a conventional mortgage in one respect – it allows you to borrow against the equity that you have in your personal residence.
If you were to ask the question, what is a reverse mortgage, to the average citizen, you would hear a number of different answers, many of them incorrect. The reverse mortgage program was initially designed to assist senior citizens who primarily were “house rich and cash poor”.
This would be done by providing them funds to meet their living expenses and remain in their homes. They would be able to borrow against the equity in the home and not have to repay it until they either sold the home, moved away, or died.
Practically from the very beginning, the program was rife with problems due primarily from confusion with the borrowers because no one took the time to answer the question, what is a reverse mortgage? View full post…
We all have dreams about our future. Maybe your dreams look like this: by the time you are middle aged, you are living comfortably but still working hard and smart. When you are older and have figured out how to retire early, you are living the good life without a care in the world. You’ve had great success and look back on your past with great pride.
Life has a way of getting ahead of us all before we know it. Sometimes our dreams get lost in the fact that time passes too quickly with too much to do, much less thinking about how to retire early. We struggle more than we ever thought we were going to. We tend not to focus on our retirement because we are so busy trying to be a success right where we are at. Most people are really good at living in illusion and ignoring the reality. Sometimes if people look at the future, they have to truly admit where they are. Too much of ignoring the reality leads to a life that is not very productive; as the road becomes harder to travel, the illusions begin to crumble in a very painful way. View full post…
Reverse Mortgages – 7 Ways to Clean Up the Industry
Reverse mortgages are legal instruments designed for homeowners 62 years of age and older, that will allow them to borrow money against their home and not pay it pack until they move, sell the home, or die. From day one, this program has had problems, due partly to borrower ignorance, as well as some aggressive and shady promoters.
Several of the large banks have ceased making reverse mortgages, more particularly Bank of America and Wells Fargo. They cited their reason for departure, as not being able to properly determine if the borrowers had the ability to repay the loan, plus declining housing prices. Met Life also has stopped being a lender for reverse mortgages.
With the exit of the large lenders, the market has been flooded with small mortgage brokers, many interested only in the fees they can generate. Many of these brokers sell this type of loan to elderly homeowners who simply can’t afford the high fees, and then on top of that, home repairs and maintenance, real estate taxes, and insurance.
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