Why Now May Be the Best Time for Reverse Mortgage Planning

Many older homeowners wonder whether this is the Best Time for Reverse Mortgage planning. The answer depends on home equity, current expenses, long-term goals, and the homeowner’s ability to meet the loan requirements.

Reverse Mortgage Specialist helps homeowners review these factors before they make a decision. A careful review can show whether accessing home equity now supports a stronger and more flexible retirement.

What Makes This the Best Time for Reverse Mortgage Decisions?

There is no single perfect time that applies to every homeowner. However, several personal and financial conditions may create a good opportunity to explore this type of loan.

Homeowners may benefit from reviewing their options when they:

• Have built substantial equity in their home
• Want to remain in the home for several years
• Need another source of cash flow
• Want funds available for future expenses
• Plan to reduce withdrawals from investment accounts
• Can continue paying taxes, insurance, and home expenses

Home equity often represents one of a retiree’s largest assets. However, that value usually remains unavailable unless the homeowner sells the property, takes out a traditional loan, or uses an equity-based financial option.

A reverse mortgage may allow an eligible homeowner to access part of that value without making required monthly principal and interest payments. The borrower must still follow the loan terms, live in the home as a primary residence, and maintain the property.

The loan balance generally becomes due when the last borrower sells the home, permanently moves away, or passes away. Because this is a long-term decision, homeowners should consider both present needs and future plans.

Home Equity Can Create Greater Financial Flexibility

Home values have risen in many communities over time. As a result, some longtime homeowners now have more equity than they expected to have when they first bought their homes.

Homeowners in Columbia SC may use an updated property estimate as the starting point for evaluating their available equity. The home’s value, the borrower’s age, existing mortgage debt, and current lending limits can affect the amount available.

Greater equity does not automatically mean a homeowner should move forward. Instead, it gives the homeowner another resource to consider alongside savings, investments, pensions, and Social Security benefits.

Available funds may help cover several types of expenses, such as:

• Home repairs or accessibility improvements
• Medical bills and healthcare costs
• Existing mortgage payments
• Everyday household expenses
• In-home assistance
• Emergency reserves

Borrowers may receive proceeds through available payment options that fit the loan program and their goals. These options may include monthly advances, a line of credit, a lump sum, or a combination of methods.

The right structure depends on how and when the homeowner expects to use the money. Someone who needs funds for one major expense may have different needs from someone seeking ongoing monthly support.

Rising Expenses Can Affect Retirement Choices

Inflation can place pressure on a fixed household budget. Food, utilities, insurance premiums, property maintenance, and healthcare costs can increase even when monthly income stays the same.

A homeowner may begin using savings faster than planned when these costs rise. That pattern can create stress and make it harder to prepare for larger expenses later in life.

Home equity may provide another source of funds. However, homeowners should not view it as free money because interest and other charges add to the loan balance over time.

A thoughtful retirement planning strategy considers how home equity works with other available resources. It also evaluates how borrowing may affect the homeowner, a spouse, and the property that may eventually pass to heirs.

Some homeowners use proceeds to avoid selling investments during a market decline. Others establish access to funds before they face a major expense.

Timing matters because waiting until a financial emergency may reduce the homeowner’s ability to compare choices calmly. Reviewing options early can provide more time to ask questions and discuss the decision with family members or financial professionals.

At Reverse Mortgage Specialist, homeowners receive information based on their property, goals, and financial situation. This personal review can help separate general information from the details that apply to a specific household.

When Waiting May Be the Better Choice

A reverse mortgage does not fit every situation. Homeowners should consider other choices when they expect to move soon or cannot keep up with required property expenses.

Waiting or choosing another option may make sense when:

• The homeowner plans to sell in the near future
• Another household member may need to remain in the home
• The property requires unaffordable repairs
• The homeowner cannot maintain taxes and insurance
• The available proceeds would not solve the financial need
• A lower-cost option is available

Homeowners should also consider the effect of existing mortgage debt. Any required payoff generally comes from the new loan proceeds, which can reduce the remaining funds available to the borrower.

Family plans matter as well. Heirs usually have options after the loan becomes due, including selling the property or keeping it by satisfying the applicable repayment requirements.

Discussing these issues early can prevent misunderstandings. It also gives family members time to understand how the loan works and what may happen in the future.

What Happens Before a Homeowner Applies?

The process should begin with education rather than paperwork. A homeowner first reviews basic eligibility, discusses goals, and receives an estimate based on the available information.

A reverse mortgage consultation gives the homeowner an opportunity to compare payment choices, estimated costs, and possible loan proceeds. It should also explain borrower responsibilities in clear and direct language.

Applicants for a federally insured Home Equity Conversion Mortgage must complete counseling with an approved independent counselor. Counseling helps confirm that the homeowner understands the loan, available alternatives, financial obligations, and repayment conditions.

After counseling, the borrower may proceed with a reverse mortgage loan application. The lender then collects required documents, orders an appraisal, reviews the property, and completes the financial assessment.

The financial assessment reviews whether the borrower can continue meeting important housing obligations. Depending on the results, the lender may require funds to be reserved for certain future property charges.

The homeowner should review the final loan terms carefully before closing. Important details include interest charges, closing costs, payment options, property requirements, and events that can cause the balance to become due.

Make the Decision Based on Your Goals

Current financial pressures may make home equity especially valuable, but market conditions should not drive the decision alone. The homeowner’s needs, plans, property, and ability to meet ongoing obligations matter just as much.

A strong decision begins with clear questions:

• How long do I expect to remain in this home?
• What expense or financial goal am I addressing?
• How much equity may be available?
• How will the loan affect my spouse or heirs?
• Can I continue maintaining the property?
• Have I compared other borrowing and housing choices?

Homeowners should avoid rushing because of advertisements or broad claims about market timing. Instead, they should use accurate estimates and personal goals to decide whether acting now provides a meaningful benefit.

Reverse Mortgage Specialist can explain available options and help eligible homeowners understand each stage of the process. Call 843-491-1436 to discuss your goals and learn whether a reverse mortgage may support your plans.

Learn more about reverse mortgages on our Facebook page. Reverse Mortgage Specialist Columbia, SC 29205 843-491-1436 www.reversemortgagespecialistusa.com/columbia Areas Served: Myrtle Beach, SC, Charleston, SC, Columbia, SC, Greenville, SC, Hilton Head Island, SC

Reverse Mortgages Soar Amid Coronavirus Pandemic

Reverse mortgage is getting a second look as a possible alternative source of stability amid the coronavirus crisis, which has caused the 401(k)s to shrink away and the stock market to behave just like an oscilloscope. The growing equity that many seniors have in their property is one of the many reasons behind the reverse mortgage’s new appeal.

The National Reverse Mortgage Lenders Association said that homeowners who are at least 62 years old saw their housing wealth increase by $39 billion starting from the third quarter up to the fourth quarter of the past year, setting a new record of $7.23 at the end of the year.

The volume has increased substantially, at about 67% year over year growth for this specific sector. The customer of reverse mortgage loan is the older homeowner who are in their retirement, which recently got pummelled by around 20% and 30%. Most homeowners think they should be accessing their home equity instead of selling off their position or living off their retirement hoping that in time, it will all come back.

Even though economic crises are not new, the global depth as well as scope of the existing situation is unprecedented and has hit consumers, especially seniors, very hard. This has caused a lot of them to inquire about reverse mortgage loans.

Most of the borrowers of reverse mortgage Columbia are at the center of the crisis. Many of them are concerned about their financial health, stability, and ability to age in place. Many of them are wondering what they can do to hedge their risk during the current movements in the market and most are turning to the security and safety offered by reverse mortgages.

The inquiry levels are at levels that haven’t been seen in three years and can be considered as part of a much wider trend with more people turning to home equity to assist them in achieving a safer and more secure retirement.

One important aspect in driving this brand new consumer interest is working through the confusion by a lot of people about how the product works. Even though reverse mortgages have existed for several years, many consumers remain uncertain about the loan’s design.

There are still many misperceptions regarding reverse mortgage. One of the most common questions is how does it work. Aside from noticing a surge of inquiries from senior homeowners, more financial advisors are also asking questions and wanting to be educated about how reverse mortgage loan works so they could recommend it to their clients as an alternative to selling off their position.

The new push for educating consumers include making clarifications about the servicing difficulties in the conventional mortgage space, which is being buried in waves of forbearances. But many of today’s potential reverse mortgage borrower has already performed some form of homework in advance for any kind of lender conversation.

Call David Stacey, Reverse Mortgage Specialist, if you need to know more about reverse mortgage.

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/

Reverse Mortgages: The What, The Who And The How

There are different types of home loans on the market. One of which is what we call reverse mortgage. Some people might think that this is similar to a traditional mortgage or home loan. The only similarity is that both are loans against a borrower’s home. To understand this type of loan further, let us first discuss what a reverse mortgage really is.

What is a Reverse Mortgage Loan?

A reverse mortgage borrower does not need to pay back the lending company as long as he/she still lives at the residence used as collateral. The loan amount will be based upon the home’s equity and the age of the borrower. A borrower has the options to receive the funds in different terms – monthly payments, a lump sum, a line of credit, or a combination of these methods. You must take note that in reverse mortgage, you are not required to pay the loan back unless you sell your home, move out or die. One of the many advantages of having this kind of loan is that you can use the loan money without having to move out, rent or repay the loan each month.

Who can Apply?

You or your spouse are at least 62 and are co-owners of the residence.

You must own a home (this home should also be your primary residence).

One of the good things about a reverse mortgage in Columbia is that you don’t need to have an income to qualify (however, you do need to demonstrate that you have the resources to pay the homeowners insurance and real estate taxes). Your home must meet the U.S. Department of Housing and UrbanDevelopment (HUD) standards to qualify. If you own a mobile home or cooperative house, you can’t apply for this kind of loan. Only single-family home, a one-unit to four-unit dwelling, a condominium unit or some other HUD-recognized dwelling unit are the only types of homes accepted.

How to Apply?

Shop and Compare. You can use the internet to look for loan companies and compare their rates and fees. It is always a wise move to shop around so you can weigh your possible options. You can also ask people you know like your family members, friends, relatives and co-workers what they know about this type of loan or read reviews. However, weigh their opinions against what is best for you. There are a lot of misconceptions about reverse mortgages and taking someone’s advice that is hot knowledgeable can hurt you. Choosing a legitimate and reliable lending institution can be a difficult task though, since a lot of scams have evolved in the market. Contact Reverse Mortgage Specialist and schedule a time to get all your questions answered.

After you have chosen a local lending institution, you can now fill out and submit the reverse mortgage application form. Be sure to have the necessary documents such as your credit report, proof of your identity, etc. Requirements may vary depending on your chosen lender.

You might need to present a property appraisal.

Once approved, make sure that you have read and understood everything before finally signing any contract or document.

Meeting with a qualified counselor like David Stacey is your best bet for making sure you are doing what is right for you and your future. Call Reverse Mortgage Specialist today to schedule a convenient time to meet.

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/

Using Reverse Mortgage To Pay For Long Term Care

When it comes to long term care insurance, seniors have the option to use a reverse mortgage and other options to cover their long-term care expenses. Since long term insurance will ask you to be in excellent health, this isn’t always available to everybody especially for people who are older whose premiums tend to be prohibitive. In case you are at least 62 years old and you own your home, you can obtain a reverse mortgage to cover your care at home costs or your long term care expenses, which insurance policies don’t usually pay for.

A reverse mortgage loan allows you to borrow from the amount that you’ve already paid for your home. You are tapping into cash that’s otherwise made available to you only if you decide to sell your home. The remaining balance of the home equity will be given to your estate.

You can choose to receive monthly payments, as a line of credit, or lump sum. Plus, the proceeds that you receive are tax-free. Although the age of eligibility is 62 years old, it is ideal to wait until you are on your early 70s. If the borrower is much older, he or she will have higher chances of getting a bigger loan.

The federal government has also set some maximum limits regarding the amount of equity that could be borrowed. Generally speaking, just about 50% of the home’s value is made available through reverse mortgage.

You can use the money you get from the reverse mortgage Columbia loan to cover your home health care expenses. Since you should repay the loan once you decide to sell the house, the long term care in another facility cannot be paid for using the reverse equity mortgage unless the property’s co-owner qualifies to continue using the house as his or her primary residence.

Reverse Mortgage and Long Term Care Expenses

A study conducted by The National Council on the Aging (NCOA) revealed that using reverse mortgages to cover long term care expenses at home can help address what continues to be a real problem for most older Americans as well as their families.

The country spent $123 billion in 2000 for the long term care of those who are above 65 years old, with the amount poised to double over the next three decades. Almost half of those costs are covered out of pocket by people and just 3% are paid for the insurance companies while the health programs of the government cover the rest.

The study also showed that out of the 13.2 million reverse mortgage loan candidates, about 5.2 million are either receiving Medicaid or may need Medicaid in case they had to deal with covering the expensive cost of long term care in their homes. This segment of the older population of the country is economically vulnerable may get $309 billion in total from reverse mortgages that could help cover their long term care.

Call Reverse Mortgage Specialists if you want to know if taking out a reverse mortgage is the most suitable option for you.

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/

Who Will Own Your Home After Getting A Reverse Mortgage?

Many people think that getting a reverse mortgage loan means they are selling their houses to a lender for a lower value and that the lender will stand to benefit once the value of your home increases in the future.

If you get a reverse mortgage, just like when you obtain a traditional loan, the lender will take a security interest in your home’s value for the outstanding balance that you carry out.

With a traditional mortgage, you will own the house even though you owe a big amount of cash at the outset of your loan. You just pay off the amount of the loan over time until you have paid it off completely.

With reverse mortgage loans, you continue to own the house but you will owe a smaller loan amount at the start of the loan and the amount that you owe will grow until your death or once you have decided to move out of the house for good. You build up interest on the reverse mortgage loan so you owe much more than once the time comes that you have to repay the loan, which is usually done by selling the house.

Get The Benefits Of Selling Your Home

There is a misconception that with a reverse mortgage, the bank owns the house. That is not true. Although it may seem like you are selling your home to a lender. But the truth is, you are only selling them a part of your house.

The reverse mortgage will pay off your existing loan. You will have access to the equity of the house now so you could live the way you want, without the responsibility of paying repayments every month.

When you purchase a new house, you usually put down between 5%-20% of the purchase price, so it is like the bank is purchasing most of your house, but letting you live in it while you pay them back what you owe with interest.

This is a lot like reverse mortgage. If you have home equity remaining in your house at the end of the day when your home sells, it will still belong to you as the borrower or to your estates.

You Own The House

You might be thinking that a reverse mortgage Columbia may prevent you from repainting your home, renovating, renting out a room, or having a family member move in.

Once again, that is not true. A regular reverse mortgage will not restrict you from doing any of these things. With a reverse mortgage, you are the legal owner of the house and your name will remain on the title.

There are some restrictions on certain things like renting out the house while you are not living in it. It is because this kind of loan was created to allow retirees to age in place and that is why you should stay in the house and use it as your primary residence.

Call Reverse Mortgage Specialist if you want to know if this type of loan is the best option for you. 

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/

Tips To Avoid Running Out Of Reverse Mortgage Proceeds

Although a reverse mortgage is generally advertised as offering a secure income source for the rest of your life and they could, under the ideal conditions, running out of cash sooner than you anticipated is one of the main risks of taking out this kind of loan. A reverse mortgage is a kind of loan wherein homeowners who have significant home equity can use it to apply for a loan.

How To Receive A Reverse Mortgage?

There are six different ways for you to receive your reverse mortgage Columbia proceeds, and the one you select will have a significant effect on how easily and quickly you can use up your ability to borrow against your house.

1.    Lump sum

2.    Line of credit

3.    Tenure reverse mortgage

4.    Modified tenure reverse mortgage

5.    Term reverse mortgage

6.    Modified term reverse mortgage

All six options have different levels of risk to reverse mortgage borrowers.

How To Avoid Outliving Your Reverse Mortgage?

Lump sum

The lump sum is the only reverse mortgage payment plan that has a fixed interest rate. It may be a low risk method to borrow and you may know how much you need to repay but this option has its own set of unique disadvantages.

The common problem with reverse mortgage borrowers is that they don’t plan correctly. They have a tendency to mismanage the proceeds. When they have used up the cash, they don’t have any sources of income to rely on. The lump sum option is also risky for younger borrowers who have longer lifespans and don’t have a different retirement resources.

Line of credit

The possibility of you running out of cash with a line of credit option whether used alone or along with a term or tenure plan will depend on how you could use the payment plan. Just like a regular HELOC or home equity line of credit, a reverse mortgage line of credit payment plan can’t be revoked, which means it cannot be canceled or reduced due to the changes in your home value or finances.

With this plan, you won’t be at risk of losing access, your available line of credit will go down every time you draw upon it, and just pay the interest and mortgage insurance fees on the money that you borrow. Plus, a line of credit will give you access to more funds as time goes buy since the unused amount grows every year whether or not the value of your home increases. The unused part of the payment plan will grow at the same interest rate that you are paying on the money that you have borrowed.

Tenure reverse mortgage

This option has the least risk of running out of proceeds provided that the loan borrower keeps up with the property taxes, homeowner’s insurance, and home repairs. If the borrower fails to do any of these things then the loan will become due and payable. The interest rates are adjustable as long as the borrower will stay in their home as their primary residence.

Modified tenure reverse mortgage

It provides smaller payments per month compared to a straight tenure plan and the line of credit would be a lot smaller compared to a straight line of credit.

Term reverse mortgage

This payment plan will put the borrower at risk of outliving their loan proceeds. With this option, you reach the principal limit of your loan at the end of the term. After that, you will not be able to get more proceeds from your loan. But you’ll get to stay in the house with the caveats included in the lump sum option.

Modified term reverse mortgage

This option provides the borrower with only a monthly payments for a set of time. However, the line of credit will stay available until it is consumed. If the borrower plan how to use the line of credit, then he or she will unlikely run out of money.

One good way to limit your risks of outliving the proceeds is to wait as long as you can to take out this kind of loan. Change your payment plan if you have already taken out this loan and you think that you could be at risks of outliving the reverse mortgage loan. 

Despite of what the ads say, there are several ways for you to outlive your reverse mortgage. Be sure to understand the situations under which this type of loan might not offer financial stability for life. You can use that knowledge to determine if you should take out this loan and which payment option makes the most sense and offers the best security.

Call Reverse Mortgage Specialist for more information about this type of loan.

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/

How Does A Reverse Mortgage Work?

A reverse mortgage works by letting homeowners who are at least 62 years old borrow from their home’s equity without the being required to make mortgage payments every month. As the borrower, you may opt to take the funds in a lump sum, structured monthly payments, or line of credit. The loan repayment will be required once the last surviving borrower leaves the home permanently.

How Reverse Mortgage Works

• -      You can access a part of the equity of your home
• -      The percentage will be based on the age of the youngest borrower
• -      You will not make mortgage repayments every month
• -      The funds you get are tax free and can be used for anything
• -      The loan will be repaid after your death or if you decide to sell your home.
• -      The remaining equity will belong to your heirs

How Is Reverse Mortgage Different?

You might be wondering how a reverse mortgage is different from a traditional loan, or what they refer to as a forward loan, in that it works the other way around. The traditional loan is a rising equity loan, falling debt while the reverse mortgage loan is a rising debt loan, falling equity.

So when you make payments on a conventional loan, the amount that you owe will be reduced and the equity that you have in your home increases as time goes by.

With a reverse mortgage loan, you will not be required to make regular payments, so when you draw out the funds and as interest piles up on the loan, the balance will grow and your equity position in the house will become smaller.

You never have to make a payment on a reverse mortgage loan and there will be no prepayment penalty of any sort. This means you can make payments any time, including and up to payment in full, without having to deal with penalty.

How Much Will You Receive?

The amount you get in a reverse mortgage Columbia will be determined differently compared to a standard mortgage. You will not hear people mentioning things like loan to value ratio just like you would on a conventional loan.

On a conventional loan, the lender will agree to lend a specific amount that is identified as a percentage of the home’s value. This could change according to different factors, like the credit of the borrower, the needed loan amount, as well as the type of property.

The factors that dictate the amount you get includes the age of the youngest borrower, the home value, HUD lending limit, and interest rates.

Other factors that affect the loan amount include the costs to get the loan, existing liens and mortgages, and any remaining cash will belong to you or your heirs.

Reverse Mortgage Payment Options

There are different ways you can choose from to take the money available on your reverse mortgage.

You can get the reverse mortgage payment through a lump sum, a line of credit, a payment for a specific amount and period, also called term payment, and a guaranteed payment for life or tenure payment.

Call Reverse Mortgage Specialist if you would like to know if this type of loan is your best option.

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/

What Should You Do If You Have Been Disqualified For A Reverse Mortgage?

Nothing can guarantee that you will be financially stable and secure once you reach your senior years. You always have the option to save, or buy insurance. You can even invest or reallocate yearly. But despite all these strategies, you may still realize that medical bills, home repairs, and rising costs can create problems in what you believe as a foolproof financial plan. If this takes place, you may consider taking out a reverse mortgage.

But what if you don’t qualify for this type of loan? For a few borrowers, the answer is to reapply later. But for others, it may be that a reverse mortgage loan isn’t the right financial solution for their current circumstances. Fortunately, there are three alternatives that you may want to consider.

What is a reverse mortgage?

A reversemortgage Columbia is a kind of equity loan that is designed for borrowers who are at least 62 years old to provide them with a reliable source of income once they retire. Instead of making payments to a lender for the loan they’ve taken out, a reverse mortgage won’t require any until the time comes that the borrower no longer lives in the house.

Reversemortgage borrowers could access the money in a form of monthly payments from the reverse mortgage lender to their bank account. They could also get the money as a form of a lump sum or a line of credit. But this would depend on what the purpose the funds will serve. If the borrower dies or decides to sell the house, the reverse mortgage will be repaid through the value of the house.

Reverse mortgage provides a lot of benefits. In case you choose the monthly payment option, this specific income stream could help you maintain a comfortable lifestyle and make sure that you don’t have to sell your house. Senior homeowners have different needs and wants and if applicants would like to age in place, then this type of loan is a good alternative.

Factors That Could Disqualify You From A Reverse Mortgage

Just like with any type of loan, there are specific minimum requirements needed if you want to get approved for a reverse mortgage loan. If you don’t meet these guidelines then you will be disqualified.

Age

You need to be at least 62 years old if you want to be eligible for a reverse mortgage loan. You also have to note that the younger spouse’s age who is not applying for a loan could be the cause of your disqualification. Lenders want to make sure that the non-borrowing spouse is capable of sustaining themselves in the house over their lifetime, too.

Credit and Spending History

Although your credit score is not the only factor that would determine if you will qualify for a reverse mortgage loan, lenders will still take your current expenses and credit history into account.

If you want to be approved, lenders would like to see that you can fulfill your financial obligations. In some cases, that is with your current retirement savings. However, some people may not qualify for a reverse mortgage in case the loan itself will not offer sufficient cash to meet their expenses. Factors like property maintenance, food, and the costs of prescription drugs are going to be considered.

Your Property

There are instances when it is not the borrower that is disqualified. Sometimes, it is the property.

The property should be a single family home or a residential building with at least two units and is being occupied by a borrower. In some instances, condominium projects as well as manufactured houses might also qualify. Such properties also have to be in good condition. Although there’s no set amount of home equity needed to qualify, you still have to make sure that you’ve got at least 50% home equity. In case your current mortgage is very high, you may not be able to qualify for a reverse mortgage loan.

How To Requalify For A Reverse Mortgage

In many instances, a reverse mortgage disqualification isn’t permanent. You could still qualify in the future once your situation changes. Here are a few things you need to know.

What If I Was Disqualified Because of Bankruptcy?

In you case you are going through bankruptcy and you applied for a reverse mortgage, there is a possibility for you to be disqualified in case the procedures have not been finalized. When this happens, you can reapply once the bankruptcy has been discharged.

What If I Was Disqualified Because of Credit History?

In many instances, underwriters would take into account special situations and think about working around them. They could also reconsider you once you have improved your credit history. If you have improved your credit profile or perhaps explain your special situation, the reverse mortgage underwriters could reconsider approving your loan.

What If I Was Disqualified Because of Too Little Home Equity

You may be disqualified when the amount that you were approved to borrow in a reverse mortgage loan is not enough to pay off your current mortgage and sustain you. When this occurs, you could wait until you have made more principal payments on your existing mortgage and increased your home equity. If you want to speed this up, you should think about making larger payments.

Call Reverse Mortgage Specialist if you want to know how you can increase your chances in getting qualified for a reverse mortgage. 

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/

Reverse Mortgage Pros and Cons

A reverse mortgage can be an important aspect of your retirement planning, giving you cash now and for the future. However, this type of loan is not for everybody. You need to understand the pros and cons of a reverse mortgage loan to help you decide if it is right for you.

The Pros of Reverse Mortgage

A reverse mortgage loan is a type of loan that can help homebuyers who are at least 62 years old to have a comfortable retirement.

They continue to live in their homes and continue to own the property. Just like any type of mortgage, the borrower must meet their loan obligation, make sure that the property taxes, insurance, homeowners association fees and the maintenance updated.

The borrower could choose how to receive the funds. It could be a line of credit, a lump sum, that you could tap as required. It could also receive it as a steady stream of payments per month for a certain duration or as long as you live in your house. It could also be a combination of all these options. Those who have chosen a fixed rate loan would get one disbursement lump sum payment. There are other payment options aside from all these but they are only available for an adjustable rate mortgage.

You can also use the funds that you get from the reverse mortgage Columbia to pay off your existing home mortgage. Although there remains a lien on your house for the remaining amount of the reverse mortgage loan, you won’t be required to pay the monthly principal and interest payments on the loan, and that means you will be freed from hassle of having to pay a monthly mortgage. Just like with any kind of reverse mortgage, you need to meet the obligations specified for your loan and that includes paying taxes, fees, etc.

Closing costs as well as ongoing fees including Federal Housing Administration, Mortgage Insurance Premium, could be financed using a reverse mortgage loan, which means out of pocket costs aren’t that high.

Loan proceeds are not taxable income. It will also not affect your Medicare and Social Security Benefits. But you should consult Reverse Mortgage Specialist to know the potential implications on your finances when you take out a reverse mortgage loan.

A reverse mortgage is considered as a non-recourse loan. Additionally, if the value of your house increases, then you should think about refinancing your reverse mortgage loan so you can access additional loan proceeds. Once you have repaid the loan, the remaining equity will be given to you or your heirs.

Cons of A Reverse Mortgage

The loan balance will increase as time goes by as the loan interest and other fees build up. As home equity is utilized, your heir would inherit fewer assets. You could still leave your house to your heirs however, they need to pay back the loan balance. In most cases, selling the house can pay off the loan. But you can also use a traditional mortgage or other funds.

Additionally, the fees associated with a reverse mortgage are higher compared to a traditional mortgage. The loan will become due and should be repaid if a maturity event happens like the last surviving borrower passes away, the house will no longer be the principal residence of the borrower, or the borrower vacates the house for over 12 months due to medical reasons or six months due to non medical reason. The loan would also become due once the homeowner is unable to meet the loan obligations. These include paying the insurance, property taxes, homeowners association fees, property maintenance, and more.

Call Reverse Mortgage Specialist if you wish to find out if this type of loan is suitable for you.

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/

Reverse Mortgages: Common Myths Debunked

There are a lot of misconceptions about the terms associated with reverse mortgages.

Even with the recommendations provided by the American Association of Retired Persons (AARP), a lot of seniors still worry when it comes to applying for a reverse mortgage loan. Things become worse when their loved ones or friends say that this type of loan is nothing but bad news even though they can’t provide any credible information to back up their claim.

Common Reverse Mortgage Myths

One of the most common misconceptions regarding a reverse mortgage Columbia is that it tends to result into houses being repossessed from the borrowers. This isn’t true. As a matter of fact, the senior borrower would still own the house that’s under the loan program. This ownership is protected by the lien that’s put on the property, just like other types of mortgages. It will guarantee that the lender will be repaid for the owed amount, getting rid of the threat of having the house repossessed.

Because the majority of reverse mortgages are Federal Housing Administration or Home Equity Conversion Mortgages types, the US government provides full protection by using the mandatory 2% insurance fee that can be paid on all of the FHA reverse mortgages.

The other types of reverse mortgage loans are referred to as Proprietary Reverse Mortgage and Federal National Reverse Mortgage Association. Private lenders guarantee them, which makes them safe options.

Another misconception is the idea that a reverse mortgage is costlier than other kinds of mortgages. On the other hand, the closing cost of a reverse mortgage are costlier compared to an FHA mortgage by just 1% when obtained on the exact same property. Traditional mortgages, on the other hand, tend to charge more than 2%.

The interest rates also take on a huge factor in this case. Although traditional mortgages utilize the prime rate as their base, the interest rate of the FHA reverse mortgage loan will depend on the one year the US treasury note. This will show that the interest rate produced through the reverse mortgage is lower than that of a traditional mortgage.

There is also misinformed concept that the house would be handed over to the lender when the borrower passes away or has moved to a different permanent location. This is not true. It follows the exact same procedure as that of a normal mortgage where the home equity will go to the heir of the borrower or the estate.

A reverse mortgage loan needs the estate to pay the lender the home value once the loan’s due comes. The exact same thing applies if the value of the house has decreased or when the borrower reaches extreme old age.

The last misconception about the reverse mortgage loan is that tax will be imposed on it and the borrower’s health insurance and Social Security will be affected. A reverse mortgage loan isn’t an income but a loan. In case you are still in doubt regarding the security that you get through reverse mortgage, you could refer to certain publications from AARP. It is a legitimate body that is involved with reverse mortgages that could give you reliable information.

Call Reverse Mortgage Specialist if you need more information about this type of loan to make sure that it is the right one for you. 

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/

A Guide To Reverse Mortgages

People’s priorities change as they age and that is something that happens naturally. In terms of their financial needs, for example, young kids have shallow concerns about money. On the other hand, teenagers, have more needs, but are still manageable. Young professionals tend to have complicated but still, unnecessary financial problems. As called in urban slang, yuppies have a higher likelihood of buying due to their initial excitement of being a real adult.

Meanwhile, middle aged individuals have more complicated and defined financial problems. Those who are nearing their retirement or seniors have a well-defined financial concerns. Because the majority of people who are in their retirement age know what their needs are, they are those who are targeted by financial institutions and banks for loans like a reverse mortgage.

A person who is nearing the retirement age will most likely be more concerned about savings and funds more. This is only natural since retiring from work for good means they will no longer receive a pay check. Some individuals, after checking their savings and bank assets would feel that the money that they have won’t last them throughout their retirement period. That’s exactly whey reverse mortgages become advantageous for this particular demographic.

A type of mortgage that’s designed specifically for those who are already in the retirement age is a reverse mortgage. This type of loan is offered for people who are at least 62 years old. The reverse mortgage is a loan that is placed on the home equity. It’s called reverse since it’s different from a conventional mortgage where the homeowner gets a lump sum and he or she has to repay their debt within a certain period of time.

In a reverse mortgage loan, a lender will release money to the borrower for the life of the mortgage and the loan amount increase is directly related to the released amount.

The contract will expire once the homeowner sells the house, moves out, or dies. When this happens, one can say that the mortgage will also expire once the house has been sold. In case the homeowner decides to move out or sell the house, he or she will no longer receive payments from the lender once they express their intent to sell. But if they don’t have any plans of such then the payment they receive will remain continuous. In case the homeowner dies, the heirs will inherit the home and the reverse mortgage and they decide to settle the debt or continue the allotment, that’s in case they plan to move out.

If the house is sold, a part of the proceeds would be used to repay the home equity mortgage. In case there is an excess, the homeowner could keep it, when the proceeds aren’t enough to settle the loan, the insurance provider of the bank will absorb the reverse mortgage.

Before you take out a reversemortgage loan Columbia, you must do your research thoroughly. You should also weigh its pros and cons. A reverse mortgage will bind your home to the lender and you will have no chance of reclaiming the property because the only factor that would determine the conclusion of the mortgage is selling the house.

Reverse Mortgage Specialist now and find out if a reverse mortgage loan is right for you.

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/

What You Need To Know About Non-Recourse Reverse Mortgage

A reverse mortgage loan is a non recourse loan and it is one of the features that many senior home borrowers do not understand. Many people think that this term refers to something bad and tends to bring the feeling of uneasiness to the homeowners at first when it’s being explained. But, a non-recourse loan offer security to the borrower about the collateral.

A reverse mortgage will require the withdrawal of the home equity from the primary home where the senior borrower is living. Because the collateral is placed on the house, it must be the sole source of dissolution and repayment of the mortgage contract.

The reverse mortgage loan will convert into cash a part of the home equity according to its current fair market value. The loan can be released as a lump sum or monthly payments, based on the borrower’s preferences. Even when the loan allotment period has ended already, the borrower has no responsibility to repay the loan and can continue living in the house. But the longer the senior borrower stays in the property, the higher the repayment dues will accrue.

The repayment would start when the senior borrower along with his family makes a decision to leave the house and sell it. If the borrower dies, the heirs will inherit the mortgage contract and they will be given 12 months to live in the property, wherein they can determine if they will still continue with the financial benefits of the loan or sell their home. The proceeds of the sale will be used to settle the full mortgage loan and the remaining amount will go to the primary homeowner or his estate.

When this happens, it will provide security on the part of the borrower that there will be on other property that will be involved when it is time to repay the reverse mortgage loan. There are instances when the borrower has outlived is expected lifespan, especially with the modern medicine these days as well as the physical activities made for seniors.

As that happens, the obligation for the loan will increase dramatically and may even exceed the value of the property. Real estate tend to increase in value. However, there are cases when the value also decreases. This takes place when the house is not well maintained and taxes are not paid regularly. Minor home repairs like repainting and plumbing when not attended to right away can result to bigger issues.

If the loan obligation goes beyond the home equity, the lender can’t force the homeowner to sell his other properties, regardless if it’s tangible or real, to cover the repayment. The lender will assume the loss in the event that the value goes down; on the flip side, the borrower will assume the loss if the property value goes up.

A non-recourse loan will make sure that your reverse mortgage Columbia won’t go beyond the home’s value. Although it may be worth more than the house, but when it comes to repayment, nothing should be used to deal with the obligation or the lender will have no other recourse to get repayment but through the collateral alone.

Call Reverse Morgage Specialist for a comprehensive discussion about reverse mortgages.

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/