Borrower Qualifications

Finding Out If You Qualify for Remortgage

Almost anyone who meets the basic requirements can get a reverse mortgage. You don’t need perfect credit, you don’t need a down payment, and you don’t need a steady job. In fact, none of those points matter in a reverse mortgage.

Aging gracefully

Though you may feel discriminated against because of your age in some facets of life, reverse mortgages were designed especially for you. In order to receive a reverse mortgage you must be at least 62 years old. No exceptions.

But wait, it gets even better. The older you are, the better you’ll do on a reverse mortgage. Why? Because lenders know that the younger you are, the longer they’ll have to pay you. Lenders use actuarial charts (just like insurance companies) to guess how long you’ll be in your home. The charts aren’t a crystal ball, and they’re not always right, but they give a pretty good estimation. Then lenders calculate your loan based on your age, your home’s value, and whatever the current interest rates are.

Look at Table 3-1 for an example of how your age can work for you in a reverse mortgage. Let’s say our borrower, Nathaniel, owns a home worth $235,000 in Jenkintown, PA, and owes no outstanding mortgage debt. He’s choosing a Home Equity Conversion Mortgage (HECM) reverse mortgage product and wants a lump sum, giving him all his money in one big check. We’ll pretend for our purposes that interest rates don’t change into the future (although in real life, Nathaniel’s initial loan amount would be affected by rising and falling rates). The table shows how much Nathaniel could expect to borrow if he closed the loan at particular ages. Notice that the older our fictitious borrower gets, the more money the lenders are willing to loan him.

How Age Affects Your Loan

Age at time of Total loan amount loan closing available

1. 62 $116,754
2. 67 $126,806
3. 72 $137,401
4. 77 $148,796
5. 82 $160,349
6. 87 $171,433
7. 92 $182,354

The typical age for reverse mortgage estimates is 75, because by then you’re old enough to get a pretty hefty check but young enough to be able to enjoy your new income. When you see examples of reverse mortgage calculations (in this book and in the world at large) you’ll probably notice that the hypothetical borrower is 75. It’s not a magic number, and by no means should it be seen as any sort of limitation, but as far as the lenders go it’s the perfect win-win age.

There’s a disadvantage to this age system, however. If a couple, ages 62 and 75, want to get a loan, you may think they should be able to get a pretty good-sized check since 75 is just about the ideal reverse mortgage age. But that’s not the case. For most reverse mortgage loans, the age used to calculate the loan is that of the youngest borrower (sneaky, isn’t it?). If Nathaniel (age 75) and his youngest brother (age 62) want to live together to save some money, their reverse mortgage will be calculated using his brother’s age, which means a lower loan amount. On the other hand, Nathaniel and his brother may find that they can get a larger sum with a Fannie Mae Home Keeper loan (see Chapter 6) because Fannie Mae uses a combination of borrower ages to determine the available funds.

No matter what your age, if you are interested in getting a reverse mortgage, find out what your options are from your originator

Read more...

Knowing when you shouldn’t get a reverse mortgage

As a rule of thumb, reverse mortgages are designed for people who plan to live in their homes for at least five years (but more likely 8 to 12 years). Some senior homeowners are over optimistic about their current living situations, believing that they can continue living in their homes indefinitely, even though their doctor or concerned family has other ideas. Others aren’t patient enough to wait a few years to make the loan worthwhile before picking up and moving to Cancun. Of course, if you’re on the elder end of the borrower spectrum and need the funds from a reverse mortgage despite the fact that you may only hold the loan for a couple of years, don’t let that five-year timeframe keep you from seeking out the loan. Again, only you and your lending professionals know what’s right for you, but you’ll probably want to think twice about getting a reverse mortgage if any of these apply to you:

Your home is damaged beyond the point of repair. Reverse mortgages are great for revamping a few rooms, or making a home more accessible, but they don’t work miracles. Unlike the shows you may have seen on TV, you won’t be able to tear down your home and build a new one if there are major structural or foundation problems. Dangerous electrical or plumbing may also be an issue. Sometimes it’s better to cut and run. You may be able to purchase a new home with the Home Keeper for Purchase, but don’t expect anyone to let you stay in a house that’s crumbling.

You’re young and have plenty of money. Just because you’re 62 doesn’t mean you need to run out and apply for a reverse mortgage. The lenders aren’t going anywhere — there’s no rush. In fact, as we noted earlier, the younger you are, the less money you’ll get from your loan. If you can live off your nest egg for a few years, wait to get your reverse mortgage. Not only will you save money, you’ll get more money as well.

You think you’ll want to move out in the next couple of years. Reverse mortgages get less expensive the longer you have them. Moving out too soon means you’ll pay more for the privilege of having a loan, which is less money you’ll have for your fun and extravagant lifestyle or for the needs you took the loan out for in the first place. If you stay longer, you win. A reverse mortgage isn’t usually the best short-term solution.

You are ill and don’t believe you’ll live as long as the lender predicts. Just like moving out too soon, it doesn’t make sense to take out a loan that you know you’ll never be able to fully enjoy. Keep in mind, however, that sometimes need overrides financial considerations and the reverse mortgage is still your best choice. The loan may allow you to live out your last years more comfortably than your could otherwise manage. Make sure your counselor explains the pros and cons, and don’t be afraid to tell him or her about your condition. They need to know all the facts.

You have a spouse or other person living in your home who doesn’t qualify for a reverse mortgage. The loan becomes due and payable when the borrower (or last remaining borrower) permanently leaves the residence. That means if you get the loan when you’re 65 and your spouse is 57 and you die or move out for any reason, your spouse will be responsible for paying off your mortgage, which often means selling the house. If you can’t add all residents to the mortgage, you may want to wait or seek out a different option.

Read more...

Remortage How to Keeping Your Options Open ?

There are some cases in which a reverse mortgage just isn’t right for you. There are a few main alternatives that counselors often suggest when a reverse mortgage is too costly, or your profile doesn’t fit with the needs of a typical reverse mortgage borrower. If your counselor feels that one may be a better choice for you, take his or her advice to heart. You can always reconsider when your situation changes.

Waiting: In many cases, waiting a few years to get a reverse mortgage really pays off. Since the lender calculates your loan partially based on age, the older you are, the more money you will most likely receive. Interest rates play a big part in determining your loan amount as well — when rates are low, you can probably expect a more out of your reverse mortgage. In a low interest rate market, you can figure on an extra $8,000 to $15,000 for every five years you wait, depending on the value of your home. If you can afford to hold off for five years (or more) it’s definitely worth it. For example, if you’re 65, own a $200,000 home, and are considering an HECM loan, you could probably get about $10,000 more out of your loan if you waited until you were 70. On the other hand, higher interest rates will produce less available funds. If rates seem to be rising, you may want to jump on current rates before they get too high. Either way, don’t wait too long — you want to have time to enjoy your newfound financial independence.

State loans: Some state loans, like the Deferred Payment Loan (DPL), work like a reverse mortgage — they give you money and you pay it back when your leave your home permanently. But there’s a catch . . . the DPL can only be used for a specific purpose, usually to repair something dangerous or unlivable in your home, whereas a regular reverse mortgage can be used for anything your heart desires. Another option is property tax deferrals that allow you to forego paying your property taxes for a while. These vary by state; some let you defer your payments forever, some only for a set timeframe. Both of these state loans offer very low interest and very low closing costs (if any). Check with your counselor to find out if other state loans exist in your area.

Selling your home: This is often the obvious answer to your problems — sell your home, use the money to buy something smaller or simpler to maintain or easier to maneuver around, and live on the excess money from the sale of your house. If you think you’ll be moving soon anyway, selling your home is usually the way to go. This assumes, of course, that you want to move, and that your home is worth enough to buy a new home with the equity. If you live in an average town in the Midwest and think you can buy a condo in San Diego with your equity, you’re in for a big surprise. Housing prices vary greatly across the country, so do your homework if you plan to retire in another area.

Another non-traditional alternative to selling your home is to work out an agreement in which someone (usually a family member or friend) buys your home and rents it to you for a nominal fee. They get the benefit of the home’s appreciation, and you get to stay in your home, collect on the sale of the house, and reduce your payments. Still, some people prefer not to mix family and money, and for good reason. Be sure to discuss this kind of arrangement in detail, and involve a real estate professional if appropriate.

Sharing space: Your financial situation might be such that you don’t need a huge sum of money for any big vacation or fancy new bathroom. You just need money for the essentials or to supplement your Social Security. Your counselor could bring up the idea of sharing a home with a friend or relative in a similar situation. Do you have a sibling or sewing club friend who is also in need of a little monthly help? Invite them to live in your spare bedroom, charge them a fair rent, and meet your monthly requirements. You may also consider moving in with an adult child. This is an ideal situation for some families, but it can be a huge lifestyle change and is not a decision to be taken lightly.

Refinancing with a forward mortgage: Okay, maybe the idea of having a new payment to worry about doesn’t thrill you, but if you can reduce your payments, a forward mortgage may help cushion the savings or retirement income you’re living off of today. ARMs (adjustable rate mortgages) always have lower interest rates, which means a lower monthly payment.

Keep in mind that because forward ARM interest rates change frequently (usually once per year) what may have been a great interest rate last year can suddenly skyrocket next year. If you’re uncomfortable with an unpredictable interest rate, an ARM may not be the best choice for you.

Home Equity Lines of Credit can also be a good option, offering another way to use your equity now. Downsides are that they sometimes have a higher interest rate over the long term; they have a minimum monthly payment (that’s you paying the lender); and some have a balloon payment built in, which forces you to pay more after a certain time period.

Public assistance: Many people think of public assistance as a negative, and would often rather protect their pride than get the help they need. Don’t be one of those people. Public assistance is nothing to be ashamed of, and can give you all kinds of breaks on daily expenses. There are meal delivery programs for those who can’t cook anymore (whether it’s due to inadequate funds or mobility), prescription drug benefits, medical assistance, transportation for those who can’t drive, in-home helpers, and many, many more opportunities for help. Several resources aren’t being utilized by enough people. You’ve paid for these public assistance programs through taxes all your working life. This is the time to reap the benefits of your own tax dollars.

A great resource for all types of help is the Area Agency on Aging. They can give you information about some of the options listed here, plus reduced energy bills, tax support, and more. Contact them at 800-677-1116 or online at www. eldercare.gov. Another great resource is a Web site called www.BenefitsCheckup.org. BenefitsCheckup is sponsored by the National Council on the Aging and works by creating a profile of you and your needs and matching it to all the programs out there that may be able to help you. All you have to do is fill out a questionnaire and let the Web site do the work. Your results will include information about each organization and how to contact them to apply for benefits.

Of course, with hundreds of thousands of individual circumstances, your counselor may be able suggest another alternative that’s tailor made just for you. The point is: You have options. Just because you’re reading up on reverse mortgages doesn’t mean you’re locked into a loan. Before you meet with your counselor or your originator, keep an open mind to all options so you find what works best for you.

Read more...

Reverse Mortgage Is Right for You ?

Reverse Mortgage Is Right for You

Human needs can be broken into categories, with some areas carrying more weight than others — like a what-you-need pyramid. At the base of the pyramid, you may place things like food and shelter, and toward the top, less tangible items such as self-esteem and independence. Reverse mortgages can address all of the essential human needs when the mortgage is taken out responsibly and in your best interests. It can help pay for your basic needs, while affording a sense of peace and financial independence that only comes with the security of money in the bank.

As great as that sounds, reverse mortgages aren’t a magic solution for every household. Before you start buying up toys and timeshares, create a detailed budget of what you need per month. The things you need depends on how loosely you use the term, but you can consider the things you need as the non-extravagant items that get you from day to day. Food, medicines, health care, a safe place to live, electricity, water, gas, car payment, insurance, taxes — these are all needs that you’ve probably become accustomed to. Include everything from toothpaste to home repairs to your pet’s medications . . . anything you wouldn’t be willing to forego.

Preparing a needs budget

To account for your needs, simply look to your wallet. Each of your essential needs has a price, and knowing what you spend your money on is an easy way to focus in on your true needs versus your want-to-haves. Start paying attention to every item or service you pay for, and write it all down in a specially designated notebook or pad that you can carry with you. After a few weeks, take a hard look at your list and circle the expenses that you simply aren’t willing to give up. These are the things you personally need. Now consider what your needs alone are costing you per month. It can be a shock to see how quickly it adds up! Check out Table 2-1 for a sample needs budget. Notice that the list of needs isn’t strictly food and shelter, but also costs that have become associated with this imaginary senior’s standard of living.
Table 2-1 Sample Needs Budget

Need Cost per month

Phone bill $39.99
Electric bill $22.00
Cable bill $45.00
Water bill $10.00
Car insurance $115.00
Gasoline $40.00
Groceries $150.00
Prescriptions $67.89
Pet food $12.50
Pet medication $35.00
Hair cut and/or set $45.00
Life insurance $60.00
Daily paper $15.00
Postage stamps $7.35
Weekly lunch with sister $60.00
Internet connection $9.95
Club membership $35.00
Housekeeper $50.00
Total $819.68

You can see how quickly these things add up. Now take an honest assessment of your own list. Determine if you can pay for all of these needs now. If not, figure out how much more money you need to meet your expenses. Don’t forget to consider cutting back on your expenses to meet your budget.

However, even when you live on a tight budget, your expenses may be more than you can handle. Many people find that their pennies are pinched so tightly they’ve got “one cent” permanently imbedded in their thumbs, and yet their monthly expenses still come up higher than their monthly income affords. A reverse mortgage can change all that, giving you the extra padding you need to keep your life running normally, without giving up your necessities. If the things you need have become the things you’re struggling to get, a reverse mortgage may be able to give you the economic boost you need to make ends meet.

Paring down your needs

When you look at what you spend each month, or even each week, you may be shocked by how much money goes flying out of your wallet. You spend $5 here and $2 there, which all seems perfectly harmless until you realize that you’ve spent $150 in one month on ceramic toothbrush holders and yet another pair of slippers.

We would never tell someone not to buy the things they really need. By all means, if your feet are cold, buy more slippers. But first, take a peek under the bed and see if you can save yourself a few bucks by using what you already have. We know a woman who moved out of her home after 10 years and found 38 pairs of nearly identical sunglasses throughout her house — she just kept buying new ones each time they were lost. At $10 a pair, that’s $380 down the drain.

You may be surprised at how much you can save by simply eliminating one small thing. While this is by no means a complete list, here are some simple suggestions to get you thinking about how you can reduce some of your expenses:

Try going to the movies less frequently. If you can’t forego having a weekly movie night or several nights a week dedicated to movies, try renting or hit the matinees (and don’t forget to ask for the senior discount!).

• Consider getting your hair done every 12 weeks, rather than every 6 weeks.
• Assess whether you really need to go shopping for junk at the bargain store every weekend.
• Experiment with different, less expensive brands at the grocery store.
• Sniff out the bargains. Check out whether you can find a similar item somewhere else for a better price.

Keep track of your things. If you find yourself repurchasing things because you lost the original . . . for the sixth time, perhaps you can devise a way to make sure the items you lose most often have a special place of residence.

Pare down to basic cable (who really watches all those channels anyway?) and you could save about $400 per year.

Make coffee at home every morning instead of going out to a café and you could save around $900 per year!

Hopefully, this list gets you thinking about your spending habits — perhaps you don’t need more money, just less spending! Many seniors need to make every dollar count, especially since newly retired people may not be used to living on such a fixed income. It takes some planning and careful spending to make any income, including a reverse mortgage, work for your budget.

If you can afford your current lifestyle by budgeting a little tighter, you may not need a reverse mortgage for your daily living. Mortgages cost thousands of dollars in fees, interest, and little incidentals. You may be able to skip all that hassle and expense by simply watching your wallet a bit closer. If you think you’ll need access to more money in the future (your income is running out or you’re expecting big medical bills) you may be able to wait a few years and still save yourself some money. On the other hand, if you need a little extra so that your necessities don’t have your wallet running on empty, a reverse mortgage may be just the thing.

Read more...

Poor Credit Loans Payment Options

You know how lottery winners get to choose whether they want their money in installments or one lump sum? Well you may feel like you won the lottery when you decide how you want your reverse mortgage funds to arrive. Each loan has its own set of payment options (that’s payment to you, from the lender). Listed here are the main payment options, along with which loans offer them. As you read down the list, think about which one would fit best in your lifestyle.

Tenure (HECM and Home Keeper): If you like the security of having stable, steady monthly checks deposited in your bank account, monthly tenure payments may be for you. The biggest advantage of this option is that no matter how long you have the loan (stay in your home), the lender continues to pay you — even if you’ve gone beyond what the lender originally agreed to lend you, and even if you live 30 years longer than anyone expected. The downside is that fixed monthly payments don’t allow for sudden large expenses and don’t adjust for inflation down the road.

Term (HECM and Home Keeper): A monthly term payment has the security of getting equal monthly checks like the tenure plan, but you decide how long you continue to receive payments. The shorter the term, the more money you get per check. For example, if a lender sets your principal at $100,000 and you want to receive it over eight years, that’s about $1,041 per month. If you decide instead to get your payments over five years, you’re looking at $1,666 per month. That’s a sizeable difference! But remember, once that term is over, you’re out of money.

Lump sum (HECM, Home Keeper, and one Cash Account option): Have you always dreamed of rolling around on a pile of money? Choosing a lump sum means you get the entire amount of the loan in one big check. It’s up to you how you want to budget it per month, and it’s up to you to make sure it lasts as long as you plan to live in your home. If you have a very large expense that you absolutely must pay in full, a lump sum could do the trick, although a better option is often a line of credit (see the next bullet).

Line of credit (HECM, Home Keeper, Cash Account): A line of credit (also called a credit line) works very much like a savings account. You have access to the entire loan amount, but since you have to send in a form to get it, people are often more mindful of how their money is spent than they may be with a lump sum. In addition, depending on the loan, you can earn interest on the money you haven’t yet borrowed.

Combination (HECM and Home Keeper): Can’t decide? Maybe a combination of payment options is your best bet. You can choose how much you want to receive upfront (through a lump sum, line of credit, or both) and designate the rest to a monthly payment. Or work backward — figure out how much you need per month, multiply that by the number of months you expect to stay in your home, and leave the rest in a line of credit. The combinations are virtually endless because they’re tailor-made for you.

Read more...

Remortgage Getting Paid

Of course, what you’re really interested in is the money. This is one time in your life when it’s perfectly okay to be focused on material things. After all, that’s what a reverse mortgage is all about — lending you the money you need to buy the things you want. This is also the easiest part of getting a reverse mortgage: The lender determines how much you can borrow and you simply pick your payment option and start receiving money. No sweat. Still, there are some things you need to know about payments, your current financial issues, and the country’s financial issues before you make a decision.
Figuring out how much you can get

Without sitting down with an originator, there’s no way to tell you for sure what you can borrow from a reverse mortgage. We wish we could give you a simple formula, but there just isn’t one.

Your age: Generally, the older you are, the better off your loan situations because the lender figures it won’t have to work on your loan as long as if you were a spring chicken.

Your home value: More equity equals more money available to borrow.

Your area: Higher home values in the area means higher loan values for you if you choose an HECM or Home Keeper (which both use county medians to determine your loan principal).

Interest rates: This is the one factor where less is more — the lower the interest rates, the higher the principal.

If you can wait a few years to get your loan, it will be worth it in the increased principal. Most people who wait at least five years are pleasantly surprised to find their loan amount has gone up . . . to the tune of a few thousand dollars. Don’t wait so long that you can’t enjoy the cash flow — that trip down the canals of Venice will probably be a lot more fun at 68 than at 98 — but don’t rush out and get a loan on your 62nd birthday if you don’t really need it yet.

Also, each loan has its own system of determining loan value. For example, no matter what your home is worth, Fannie Mae’s Home Keeper bases the amount available to you on a scale as compared to the national lending limit ($359,650). On the other hand, the Cash Account has no set limit. It bases its principal solely on your age, home value, and interest rates.

You can get an estimate of what each loan may be able to offer you using online reverse mortgage calculators. The NRMLA calculator (find it at www.reversemortgage.org) is a good indicator because it breaks down the entire loan, from what your estimated costs are to how much you get per month. However, they don’t show you what you could get with a Cash Account, only HECM and Home Keeper. For a side-by-side comparison of all three loans, visit www. financialfreedom.com and take a spin on its reverse mortgage calculator.

Read more...

Figuring Out the People in Your Mortgage: Appraiser

Unlike the counselor and originator (who hold meetings at their office), the appraiser comes to you. No matter which reverse mortgage product you decide on, an appraiser is required to come out to your home and give it the once over to determine its value.

Depending on home values in your area and the last time you had your home appraised, you may be pleasantly surprised to find out what your home is worth in today’s market. Keep in mind that appraisals are largely subjective, and although they follow a certain protocol, appraisers have to simply use their best judgment to set your home’s fair market value.


The appraisal visit is nothing to worry about, as long as you’ve kept up your home maintenance over the years. Either way, it couldn’t hurt to do a bit of sprucing up; clear your yard of any debris, clean your home the way your would if very special company was coming over, and fix any little things that you’ve been putting off if you can reasonably afford to do it. Also, gather up your home records — if you’ve ever had work done on the home (and who hasn’t?) try to find those statements. The appraiser will be impressed by a home that’s well-kept, but they won’t be impressed by receipts for granite countertops. Don’t start waving your credit card statement under the appraiser’s nose to prove how much you spent refurbishing the master suite. The money you put into a home never fetches an equal value when it’s appraised.

Since you can’t sway the appraiser’s evaluation with cookies or compliments, the best thing you can do during the process is sit back and let him or her work. Be ready to answer questions, but don’t hover or even follow the appraiser from room to room. If you need something to do, make a list of all the fabulous things you can do with your reverse mortgage income.

Read more...

Figuring Out the People in Your Mortgage: Originator

Your originator is the person who sets your loan in motion. The originator meets with you to determine whether the loan you’ve decided on is really the best for your unique circumstances, helps you fill out the application, and submits it to the underwriters (who verify your information) and the lender (who actually signs your checks). You’ll probably have at least two meetings with the originator: one to fill out the application and another to finalize details at closing. However, most people end up at their originator’s office three, four, or more times over the course of their loan process. You may not choose a loan to apply to right away, have questions regarding your loan in progress, need to bring in additional information, or a whole host of other reasons to visit. That’s why you and your originator become such close friends before your loan is completed.

Time is money, and although originators don’t charge by the hour, there are fees involved for originators’ services. Many of the fees you see on the Good Faith Estimate originators are required to provide are additional closing costs unrelated to the originator’s efforts. A Good Faith Estimate lists all of the approximate costs involved in getting your loan, from appraisal services to stamps. All told, these fees can add up to several thousand dollars. That’s a whole lotta cash to plunk down all at once, and the originators and lenders realize that it may present a burden. After all, if you had a few thousand dollars to spend, you may not need this loan. Because of this, you can roll the amount of most, if not all of your fees and closing costs into your loan. That way, the costs are absorbed into the reverse mortgage and become spread out over several years.

Finding a reverse mortgage originator is easy once you know where to look. Keep these points in mind when you’re narrowing down the search:
Originators should be experienced in reverse mortgages.

Do not pick a traditional loan originator, because they probably don’t have the expertise that a reverse mortgage originator has.

While it’s not a requirement, you may feel better if your originator is a member of the National Reverse Mortgage Lenders Association (NRMLA). They have access to all kinds of resources and materials that others may not.

Your originator should be patient, never pressure you, and encourage your family to attend your meetings (if you feel comfortable having them there).

Most of all, you have to feel comfortable with your originator. If he or she doesn’t feel like someone you’d trust with your future financial well being, trust your instincts. You won’t hurt his or her feelings.

Read more...

Figuring Out the People in Your Mortgage: Counselor

Your first stop on the road to reverse mortgages is the counselor. They’re not here to analyze your childhood or interpret your dreams; instead, these counselors offer up sound advice and the information necessary for you to make an informed decision about your own loan. They are required to remain completely unbiased and can only give you the facts — they never tell you what to choose or take away your power to make the best choice for you. It sounds great now, but come choosing time, you may probably wish someone would just tell you what to do!

Even the most independent homeowners are required to seek the advice and educational offerings of an approved counselor. Typically, an “approved” counselor refers to HUD-approved, but Fannie Mae and Financial Freedom each have their own set of preferred counselors. Unless you know for a fact that you need the Home Keeper or Cash Account loan, it’s usually best to see a HUD counselor. These professionals are acceptable for any of the major loans discussed in this book, and if you decide to get an HECM (even after you’ve been to a Fannie Mae or Financial Freedom counselor) you still need to make an appointment with a HUD counselor as well. You can save time and energy by going to a HUD-approved counselor from the get-go.

Many counselors (especially HUD) operate free of charge, although some have a nominal fee for their services (usually around $75). Unless you live in an area where the only counselor for 50 miles charges a fee, try to use one who’s free. The ones who charge offer the same exact information, so if you have a choice, go with the free ride.

During your counseling session, the counselor asks you all sorts of personal questions about your finances, your health, your family, your home, and your lifestyle. Don’t keep anything from them or stretch the truth even a little bit. Counselors only have about an hour with you and need all the information they can get in that time to show you the options that may work best for you. It can be a bit off-putting to spill the beans to a stranger, but it’s necessary to make a smart decision regarding your loan. You can rest assured that counselor sessions are completely confidential — only you and your counselor have access to the information you provide, unless, of course, you bring someone with you to the meeting.

It’s a good idea to bring along any trusted family members or friends who may be able to help you get a better perspective, supply information, ask questions you hadn’t even thought of, or just lend you some moral support. Counselors encourage families to come together, and you may probably find that you’re glad to have someone else there. This isn’t a requirement by any means, but consider it when you make your appointment.

Read more...

Jumbo Cash Accounts

For the house-rich among you, the Financial Freedom Cash Account is probably your best bet. Although it doesn’t offer the flexibility of the other two major loans, Financial Freedom’s reverse mortgage provides bundles of cash that HECM and Home Keeper only dream of. Here are some of its general characteristics:

There’s no maximum lending limit; in theory, you could get a cash account reverse mortgage on a $20 million mansion and expect to receive a pretty hefty amount.

Designed for homes valued at $359,651 or above (but is best when your home is worth at least $700,000).

Almost all homes will qualify, including some co-ops.

Interest rates and fees are usually higher than other loans.

There are three types of Cash Accounts — each with different costs involved — that may generate different available funds for you.

If reverse mortgages aren’t for everyone, then the Cash Account is for even fewer — rates and fees are higher, and there are some restrictions to the ways you can withdraw your money. However, if you own a high-priced home the tradeoff is probably worth it. Consult your counselor and financial planner about your Cash Account choices.

Read more...

Home Keeper Loan

There are two loans created by Fannie Mae, America’s largest loan funder, but they both have the same basic foundation. Since the Home Keeper and the Home Keeper for Purchase were modeled after the HECM.

Here are, however, some quirks that separate these loans from the pack:

Home Keeper for Purchase lets you use a reverse mortgage to help buy a new home.

Loan calculations are based on the combined ages of the qualifying borrowers, so married couples get less than singles.

Eligible homes are single-family homes, condos, homes in planned unit development projects, townhouses, or manufactured homes that meet Fannie Mae requirements.

Lending limits are based on an adjusted property value, which is a national lending limit rather than a county limit.

The national lending limit is $359,650 (based on 2005 lending limits).

Home Keeper often costs less than HECM but you’ll probably receive less money in the long run.

Although Fannie Mae’s Home Keeper loans may not bring you as much income as an HECM, their benefits (such as the ability to buy a new house with the reverse mortgage money) may make these the loans for you.

Read more...

Home Equity Conversion Mortgage

By far the most prevalent of the three main options, the Home Equity Conversion Mortgage (HECM, sometimes pronounced heckum; Take a look at some of the main points of an HECM loan:

The loan is calculated based on the age of the youngest qualified borrower.

Eligible homes include most single-family, condos, townhouses, and manufactured homes built after 1976 (ask your originator about HUD guidelines and requirements for manufactured homes).

Lending limits (the amount you can borrow, also called the principal) are lower than other options, yet you can often get a higher principal than you would with others because of lower interest rates.

Loans top out at $312,896 in high-home-value areas, $172,632 in lower-home-value areas (based on 2005 county lending limits).

Interest rates can be based on monthly interest adjustments or annual adjustments (you won’t pay anything until the loan is due, it just accumulates).

Your money is easily accessible and payment options are very flexible.

Read more...

Reverse Mortgage Info

A reverse mortgage can be a lot of things: a way to make ends meet, a nice chunk of change for a rainy day, a fabulous dream vacation, or a remodeled kitchen. But there’s one thing it’s definitely not — free money. There’s no free lunch here. While reverse mortgages offer many wonderful benefits, your loan will need to be paid back, just like any other loan (whether it’s due when you move or upon your death).

There are fees involved that are explained in more detail in Part II, but they can include payments to the originator, the appraiser, postage fees, flood certificate fees, recording fees . . . the list goes on and on. Of course, these are the same sort of fees you paid for the mortgage that bought you the home you live in now. You also have to pay interest on your loan, which is generally right around the interest rates on traditional mortgages. You only pay interest on what you borrow, so any money that you don’t use from your pool of reverse mortgage funds isn’t charged. People still get the idea, however, that lenders simply hand you checks every month out of the goodness of their hearts. Now, they’re not bad people, but they certainly aren’t looking to give away billions of dollars per year in reverse mortgages.

Because it’s not a cheap loan, a reverse mortgage is also not the best way to pay off a small debt. Would you really want to spend several thousand dollars in fees and closing costs just to pay back a $900 credit card debt? You know that wouldn’t make sense. But what if you owed the IRS $12,000 in back taxes? In most cases, a reverse mortgage is still too costly for this kind of debt. Okay, that’s easy for us to say, and if it looks like the best option then by all means take the first step and call a reverse mortgage counselor. If you’re in a similar situation, you may also contact a financial planner who specializes in seniors’ money.

In fact, you can probably ask a reverse mortgage originator to refer you to someone good. They love to hand out referrals.

A reverse mortgage is also not a direct value-to-dollar loan. In other words, they aren’t going to lend you the actual value of your home; what they lend is a percentage of that value, based on age, interest rates, and area. For example, a 66-year-old in a high-end county with a $500,000 home may expect to receive around $163,000 with a Home Equity Conversion Mortgage (depending on interest rates). Don’t expect the full value of your home, or you’ll be very disappointed. Before you make plans to spend money you don’t yet have, go online to www.reversemortgage.org and click on the reverse mortgage calculator. This very cool tool gives you an estimate of what you may be able to borrow. Remember, you’re not selling your home for the amount you’re lent — you are simply borrowing equity that you already own.

Lastly, a reverse mortgage is not a panacea, or some kind of allencompassing loan that’s right for everyone. Just because you qualify by being a 62-year-old homeowner doesn’t mean you’re an ideal candidate.

• Are you at least 62 and own your own home?
• Do you plan to be in your home for at least 5 years?
• If you’re getting the loan to purchase or pay off something specific, have you looked into other options for financing those expenses?
• Are you comfortable with the terms of the loan?

The more of these questions you can answer “yes” to, the more ready you are for a reverse mortgage. When you feel you meet all of these suggested criteria, you’re ready to seek out a reverse mortgage counselor.

Read more...

Common misconceptions about reverse mortgage

Seniors often tell us that they were considering a reverse mortgage until a friend or relative said something like, “Reverse mortgage?! Don’t you dare! They’ll take your house! Stay away!” We’d like to say that these fears are completely unfounded; unfortunately, they stem from a very old version of reverse mortgages (which are no longer done) that, in hindsight, weren’t such a hot idea. Today’s reverse mortgages are safe, effective, and definitely in the best interest of the borrower. It’s a whole new generation of loans.

Although they were revamped and vastly improved in the past 20 or so years, people still tend to think of them as a poor choice for seniors. We’re here to fix that. Take a look at the misconceptions below, and the truths that follow:

The lender gets your house. This is by far the most widely misunderstood fallacies about reverse mortgages. In fact, you keep ownership of your home. The lender has no rights to your home and can’t foreclose on you as long as you keep up with your taxes and insurance. Part of the confusion about this area stems from the fact that many reverse mortgage borrowers choose to sell their homes to pay off the loan when they move. And it makes perfect sense — what do you need with that house if you’re not living there? But remember, you’re selling to another regular buyer, not the lender.

You’ll have no estate left. This one is sort of up to you. If you own anything when you die, you’ll have an estate left. If you spent all your money on pinball machines and then donated everything else to charity, you won’t. Many seniors are concerned that a reverse mortgage keeps them from leaving anything to their children. The fact is, the way you pay off your loan is up to you and your heirs. It’s also up to you to decide who you want to leave your estate to. Unless you form an emotional bond with your lender and leave your estate to them, your family or whomever you name in your will is the inheritor of your estate. Of course, they need to pay back the loan, but it’s up to them how they carry out that responsibility.

You won’t qualify because of poor credit. If you have bad credit, or even moderate credit, you may have been turned down for a loan in the past. It’s embarrassing, frustrating, and inconvenient. Reverse mortgages work differently: You can never be denied a loan because of bad credit — it’s not even a consideration in your approval. The originator or lender runs a credit report, but it’s only to make sure you don’t owe the government any money (usually in back taxes). If you do, you have to use a portion of your reverse mortgage money to pay back those debts before you can start spending on yourself.

You have to be debt free. While you are required to own a home in order to get a reverse mortgage, you do not have to own it “free and clear.” One of the benefits of a reverse mortgage is that it can help pay off your remaining forward mortgage, leaving you without house payments for what may be the first time in your adult life. Here’s how it works: The lender determines how much it can let you borrow and then deducts the amount you still owe from your available funds.

That money pays off the first loan, and then you’re free to do

what you wish with the rest of the money.

Only desperate people get reverse mortgages. At one time, this may have been true. However, today’s reverse mortgage borrower is more likely to get a loan out of want, rather than need. In fact, a growing number of people who have no immediate need are taking out these loans because they like the security of having a financial cushion, or are planning for future expenses. Take a look around and ask yourself if you could use several thousand dollars. Who doesn’t? Don’t let an antiquated stigma keep you from getting the money you want or need.

Read more...

How Reverse mortgages Works

Reverse mortgages pay you to continue living in your home. You can think of your home as the Bank of You: You’re borrowing money that you would have earned had you sold your house. You can then use the money for whatever you want. Anything your heart desires (and your wallet can handle) is yours for the taking, whether it’s a vacation in Switzerland, moving your master bedroom to the first floor, or sending yourself to college!

The concept is kind of abstract if you’ve been paying a lender for the past 30 years or so, and it may be difficult to grasp at first. Take a look at the quick reference points below. Once you get the gist of it, you can educate your friends and family about reverse mortgages. Next time you’re at a cocktail party, holiday dinner, social lunch, or any time reverse mortgages come up in conversation, you can dazzle everyone with your knowledge.

Here’s a quick rundown:

You’re a homeowner who owes little or nothing on your home. You decide you need more money to live the lifestyle you want, but your biggest asset is your home and you certainly don’t want to sell it to get the money you need.

A reverse mortgage lender figures out how much it can lend you based on your home value, your age, and interest rates, and loans you some percentage of the money you would have gotten if you’d decided to sell your home.

You still own your home and continue to live in it, but now you’re getting payments from the lender, so your cash flow problem is solved.

You pay the loan back (with interest) only when you don’t live in the house full time anymore, usually due to moving out or death.

You never owe more than your home is worth, no matter how much you’ve accumulated in debt.

You keep any leftover equity after the sale of the house; if you owe the lender $67,000 and your home sells for $200,000, you put the difference in your pocket and walk away smiling.

A reverse mortgage is sometimes called a deferred payment loan, and for a very good reason. Instead of paying off the home loan as you borrow money, the payments are put off (deferred). This is why reverse mortgages can be such a good choice for seniors; when you’re on a fixed income or living off of your savings, it can help to have some extra cash in hand to supplement. Because payment is deferred, you are spending the equity in your home, rather than earning it (as you would with a traditional forward mortgage). Since equity is an intangible value, you never feel the effects of the equity going down, but you sure feel the money flowing steadily into your checking account!

Read more...

Understanding Reverse Mortgages

People tend to shy away from the very idea of reverse mortgages, in part because of their former bad rap, and in part because of all the scary terminology. If you’re one of millions of people who are unfamiliar with real estate terms, when someone starts spouting off about how you can “utilize the equity in your home on deferred payments with a conversion mortgage,” chances are pretty good you’re going to tune it out. In fact, that’s why we wrote this book: to give seniors and their families facts and tips about reverse mortgages in language that’s as approachable as a big-eyed puppy (unless you’re a cat person, then just think of it as a little fluffy kitten). We want you to fully understand the benefits and disadvantages of getting a reverse mortgage. We want you to walk into that loan originator’s office knowing exactly what you want. And most importantly, we want you to feel good about whatever decision you make for your financial future.

Read more...

Early Mortgage Payoff

Save tens of thousands of $$ on your mortgage

Similar Software Category: loan, mortgage, home, realtor, amortization, amortize, financial, money, invest



All titles of publisher "PC Shareware, Inc.":

* Another Notepad - Another Notepad - What Notepad should be!.
* Bible Lesson Record Book - Sunday School teacher's Bible lesson workbook.
* Browse and View - Put your Web site on a diskette or CD!.
* Create A Quiz - Creates interactive quizzes, exams, surveys.
* Crossword Challenge - Increase your word vocabulary and have fun!.
* Early Mortgage Payoff - Save tens of thousands of $$ on your mortgage.
* Feed My Sheep - And you thought the life of a shepherd was easy! Delig...
* Frontlets - Inspirational Bible verses screen saver.
* Gospel Parallels - Gospel Parallels is a side by side Bible.
* King James Dictionary - King James Bible Archaic Word Dictionary.
* Love You Not - Protects against script based email viruses.
* My Screen Saver - Have you ever wanted your very own, personalized screen...
* Notable Quotables - Database containing folk wisdom from around of the world.
* Password Guardian - Safely protects passwords, codes, personal IDs.
* Scripture Challenge - Bible question and answer game..
* Sheet Music Designer - Sheet Music Designer prints staves.
* Snip-Its - Snip-Its allows you to store your notes, emails, texts,...
* The Heavens Declare - Inspirational Bible verses bootup images.
* The ZIP Wizard - ZIPping files has never been easier with The ZIP Wizard...
* Unzip Wizard - The Unzip Wizard - A utility that makes unzipping ZIP archive files simple.
* What The Bible Says About - What The Bible Says About... - Study tool. Unlike other...
* Wit and Wisdom - Wit and Wisdom is a clever little Windows screen saver,...
* Zip Code Companion - Zip code, area code database utility.
* ZIP Code Distance Wizard - Locates ZIP Codes that are within close proximity of a specified ZIP Code.

Download Here

Read more...

a

a

Read more...