The Advantages of Reverse Mortgages
by: Charles Kirkendall
In recent years property values have soared, while investment returns have been modest.
This has created a situation where a lot of seniors are finding themselves in the position of being house rich and cash poor.
These cash strapped seniors are looking for ways to increase their retirement income while continuing to live in their homes.
These retirees find that their options are limited, and in most cases require them to risk their home.
Enter the reverse mortgage, which can provide many advantages over these other less desirable options.
No Payments With Reverse Mortgages
The biggest advantage of a reverse mortgages is not having to make payments as long as you continue living in your home.
In fact, this is the number one reason that seniors choose to borrow reverse mortgages.
Almost 80% of reverse mortgage borrowers use a reverse mortgage to pay off their current loans in order to eliminate their house payments.
Let's say you owe $50,000 on your first mortgage and borrow $80,000 with a reverse mortgage.
This would pay off and eliminate the payment on the first mortgage and provide you with $30,000 to use as you please.
Live in Your Home as Long as You Like
The second advantage of reverse mortgages is the ability to live in your house as long as you like.
The great thing about this is the amount you owe on the reverse mortgage can never be more than the house is worth.
Let's say you live to 115 and have selected to recieve a $300 a month payments for life from the reverse mortgage.
The amount received from the reverse mortgage payments could be substantially higher than the value of your home, yet the amount owed will still only be the value of the home.
In this situation, FHA insurance will cover the difference.
Reverse Mortgage Withdrawal Options
Another advantage of reverse mortgages is the different withdrawal options that a you are able to choose.
These options include lump sum distributions, line of credit, monthly payments, or any combination of these three.
So if you were eligible to borrow $100,000 on a reverse mortgage you could select to receive $30,000 up front to cover current expenses, and hold the rest as a line of credit that you can use whenever you need it.
This flexibility of reverse mortgages can significantly improve you financial independence during retirement.
Tax-Free Nature of Reverse Mortgages
Another advantage of reverse mortgage is the tax-free nature of the loan proceeds.
The American Bar Association guide to reverse mortgages advises that generally the IRS does not consider loan advances to be income.
This means that all the money from the proceeds of the reverse mortgage end up in your pocket.
With these features, reverse mortgage are definitely an option to consider if you are looking for ways to supplement your current income.
As with any financial decision, you should seek the advice of a trained professional, a reverse mortgage counselor, to evaluate and determine if a reverse mortgage is right for your situation.
About The Author
Charles Kirkendall writes articles on reverse mortages and other senior financial issues.
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A HUD Reverse Mortage For Retirement?
A HUD Reverse Mortage For Retirement?
by: Charles Kirkendall
HUD reverse mortgages can be a great tool for Seniors that are looking for additional funds for retirement. Through a HUD reverse mortgage, seniors can tap into the equity from their homes without having to make repayments.
HUD Reverse Mortgage Eligibility
Homeowners must meet the following criteria in order to be eligible for a HUD reverse mortgage:
- Homeowner must be age 62 or older.
- The home must be owned free and clear or have a mortgage balance that can be paid from equity.
- The home must be a principal residence.
- The property must be a single-family home, a one-to-four unit dwelling with one unit occupied by the applicant, a manufactured home (mobile home), or a unit in condominiums or Planned Unit Developments.
- The property must meet minimum property standards.
Homeowners that qualify can receive payments in a lump sum, on a monthly...
A HUD Reverse Mortage For Retirement?
Mortgages > A HUD Reverse Mortage For Retirement?
Comparing Mortgage Rates
Comparing Mortgage Rates
by: John Mussi
When you're getting ready to buy a new house, you're likely going to be confronted with a variety of mortgage options. You might have to choose whether to apply for a standard loan or a balloon mortgage, as well as whether to go for a shorter loan term like 10 years or a longer term of 20 or 30 years.
Regardless of the type of mortgage loan you choose, though, you're going to need to pay special attention to the interest rates that are offered. After all, you'll likely be paying interest at this rate for quite some time? if you find a fixed rate mortgage, you might even be paying that interest rate for 10 or 20 years or more!
Here is some basic information about mortgage interest rates, as well as simple ways that you can shop around and compare interest rates before you commit to any type of mortgage loan.
Defining Interest
The first step to finding a good interest rate is making sure...
Comparing Mortgage Rates
Mortgages > Comparing Mortgage Rates
Sneaky Mortgage Secrets: How To Get Other People To Pay Your Home Mortgage
Sneaky Mortgage Secrets: How To Get Other People To Pay Your Home Mortgage
by: James Wilson
Everyone dreams of becoming a home owner, and when that day finally comes, it may be a little more difficult than expected to stay current on payments and organize household finances.
And, while there are a number of loans and financial provisions that can be made for individuals in a number of different situations, I'd like to share one method I used to get other people to pay my monthly house payment-mortgage sponsorship.
Mortgage sponsorship is the process of soliciting other businesses to cover your mortgage costs, while providing free advertising for the business. Mortgages are auctioned off, mostly online at eBay, and businesses can bid on the mortgages they are willing to pay in exchange for excessive publicity for a specified amount of time.
This system seems to work pretty well, since businesses are continually looking for more exposure,...
Sneaky Mortgage Secrets: How To Get Other People To Pay Your Home Mortgage
Mortgages > Sneaky Mortgage Secrets: How To Get Other People To Pay Your Home Mortgage
Home Loans and Mortgages ? Tips to Avoid Foreclosure
Home Loans and Mortgages ? Tips to Avoid Foreclosure
by: Charlie Essmeier
Today?s real estate market is a volatile one; prices are at record levels and Interest rates are favorable, but foreclosures are increasing. Wages haven?t kept up with home prices and some buyers who had to stretch to find a way to obtain a mortgage in the first place are having trouble making their payments. Usually, if a buyer cannot meet his or her mortgage obligation, the lender forecloses, taking the home and leaving the buyer without a place to live and a tarnished credit record. If you are having problems paying your mortgage, can you avoid this scenario?
Depending on your type of mortgage and your lender, you may have other options. Most lenders, wary of rising foreclosure rates, would rather work out some sort of solution than take your home. Lenders are in the business of lending money, not selling houses, and the process of foreclosure is a tedious one that most...
Home Loans and Mortgages ? Tips to Avoid Foreclosure
Mortgages > Home Loans and Mortgages ? Tips to Avoid Foreclosure