by: Stuart Simpson
Simply stated, a reverse mortgage is a loan that enables homeowners (age 62 and older) to convert part of the equity in their home into a tax-free income without having to sell the home, give up the title, or take on a new monthly mortgage payment.
More and more homeowners are using this to supplement their retirement income, pay for health care, modify their home, or just get some cash for emergencies.
Since this is a new product, some people have misconceptions of what a reverse mortgage is.
The bank doesn?t give you money and take your house.
Let?s look at some of the most common questions.
Are reverse mortgages for desperate people?
No.
It is an excellent financial planning tool used from people of all walks of life.
How do I qualify?
You must be 62 or if both parties are on the mortgage, then you both must be at least 62.
And, you must have equity in your home.
What if I still owe on my home?
You may still qualify even if you have a balance on your first mortgage.
The proceeds must be used to pay off the mortgage, first.
How much can I get?
This depends on several factors such as, the age of your home, the value, your age at the time of closing, and interest rates.
Is it just monthly payments?
No.
You can get a lump sum, line of credit, monthly payments or a combination of monthly income and a line of credit.
But, won?t I have to pay taxes on these monthly payments to the government?
No.
The funds are tax-free.
Its your money, not additional income.
Should I seek a lawyer or receive some counseling before I get a reverse mortgage.
Yes.
You must be counseled before receiving a reverse mortgage.
You don?t have to talk to a lawyer or accountant, but it would be advised.
Who owns the title to my house?
You still own the title.
What happens when I die?
Once your home is passed on to your heirs, the mortgage becomes due.
Your heirs may pay the mortgage and keep the home or sell the home and pay off the home.
They may keep any excess sales proceeds.
What if I owe more than the house is worth?
You can?t.
Your repayment amount will never exceed the value of the home at the time the loan comes due.
Also, there are no prepayment penalties.
What if I move?
If you move, then the mortgage becomes due and must be repaid.
Where can I learn more?
The National Reverse Mortgage Lenders Association at http://www.reversemortgage.org
About The Author
Stuart Simpson has a neat mortgage calculator FREE to use.
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When Is The Right Time To Refinance Your Mortgage?
When Is The Right Time To Refinance Your Mortgage?
by: Mark Lambie
You've heard that interest rates are down and you think it could be time to refinance your existing mortgage, but the entire loan application process was so exhausting during the initial loan that you aren't sure it's worth the hassle. You could very well be right, but there are some things you can do to help decide whether it's time to refinance your mortgage.
The first thing you need to verify is the interest rate for your existing mortgage and the interest rates being offered across the board for new loans. If there's not at least a one and a half to two point difference, you're probably not going to be significantly better off to refinance your mortgage. Here's why.
Remember those closing costs on your initial mortgage? You probably paid for an appraisal, perhaps a home inspector's services and even a survey if you have rural property. Depending on how long it's been...
When Is The Right Time To Refinance Your Mortgage?
Refinance > When Is The Right Time To Refinance Your Mortgage?
Home Loan Refinancing ? When Do You Have To Close?
Home Loan Refinancing ? When Do You Have To Close?
by: Carrie Reeder
Refinanced mortgages have a couple of different rules when it comes to closing. For one, there is a mandatory rescission clause for primary residence mortgages that allows you annul your loan. You can also choose to close at anytime, which is beneficial if you think rates will drop in the near future.
Rescission Clause
With a rescission clause, you have three days after closing to cancel your loan if the property is your primary residence. Think of it as a ?cooling off? period. If you have second thoughts, you can annul the loan and recoup nearly all the fees.
Most often this clause comes in handy when homeowners are deciding to tap into their home?s equity, but then change their minds. Other times, a change in job situation or home plans makes the refinanced mortgage unnecessary.
Once you have annulled your mortgage, you will only have a short term hit on your...
Home Loan Refinancing ? When Do You Have To Close?
Refinance > Home Loan Refinancing ? When Do You Have To Close?
Three Rules of Thumb for Mortgage Refinancing
Three Rules of Thumb for Mortgage Refinancing
by: Stephen L. Nelson, CPA
You might think that deciding to refinance a mortgage requires only a quick comparison of loan interest rates. Unfortunately, that?s not really true. Refinancing is trickier than that! Fortunately, three useful rules of thumb can often help you make sense of refinancing opportunities.
Rule 1: Don?t Ignore Total Interest Costs
You really want to use refinancing as a way to reduce the total interest cost you pay. While that sounds simple in principle, it is sometimes difficult to do.
The interest costs you pay are a function of the interest rate, the loan balance, and the loan term period.
When people refinance, they tend to focus solely on the loan interest rate. But they often don?t pay as much attention to the loan term or the loan balance.
When you use refinancing?even refinancing at a lower interest rate?to increase your borrowing or to extend...
Three Rules of Thumb for Mortgage Refinancing
Refinance > Three Rules of Thumb for Mortgage Refinancing
1st And 2nd Mortgage Refinance Loan
1st And 2nd Mortgage Refinance Loan
by: Carrie Reeder
Refinancing a first and second mortgage requires some extra considerations. Depending on your equity, you may find that combining the two mortgages results in a higher interest rate. You may also find that you have to carry PMI with the refinanced mortgage.
Will Refinancing Benefit You?
Refinancing two mortgages allows you to consolidate your loans into one payment, often lowering your monthly bill. You may also find lower rates under the right circumstances.
Those with a large amount of equity benefit most from consolidating loans since they qualify for the lowest rates. It is important to look at interest savings, not just monthly numbers which can be misleading.
However, if you have less than 25% equity, you may end up qualifying for higher rates. With less than 20% equity, you will also have to pay for private mortgage insurance. Even with these factors, you may still...
1st And 2nd Mortgage Refinance Loan
Refinance > 1st And 2nd Mortgage Refinance Loan
Second Mortgage/Home Equity vs. Refinance
Second Mortgage/Home Equity vs. Refinance
by: Benjamin Ehinger
Why should you take out a second mortgage or a home equity line of credit instead of refinancing?
Well,???You Shouldn?t!!
Why Not?
1. Second Mortgages usually have an interest rant that is twice or even three times as high as your first mortgage rate.
You can refinance instead and keep a very low rate.
In the long run a second mortgage will just cost you money in interest charges.
2. Home equity lines of credit are designed for mortgage account executives (salespeople) to sell you on using it like a credit card attached to your home.
They will try to convince you to use it over and over again.
3. A refinance loan is better for the equity in your home.
Very few companies will refinance your home at 100% of it?s value without forcing you to take out a second mortgage.
You don?t want to use 100% of your equity because...
Refinance > Second Mortgage/Home Equity vs. Refinance
What is a Reverse Mortgage? Refinance trucks
Britney Spears Born In The Month Of The Narcissus Flower
Britney Spears Born In The Month Of The Narcissus Flower
by: Wesley Berry
Born in the month of December, pop starlet Britney Spears' birth flower is the Narcissus, a flower that is known by several different names, and has many meanings. The narcissus is most commonly known as the daffodil, but is often called the jonquil in the Southern states. It is a consummate symbol of spring and new beginnings, but also stands for friendship and domestic happiness. Its...
What is a Reverse Mortgage? Britney Spears Born In The Month Of The Narcissus Flower
Refinance > Britney Spears Born In The Month Of The Narcissus Flower
What is a Reverse Mortgage? suits Refinance
Tips to Control Depression
Tips to Control Depression
by: Anandrahi
Bouts of depression is a common phenomenon. Even very happy persons and great saints have to pass through the tides of depression. Static state of anything thing or emotion can be very boring in life. If there is no night how can you enjoy the day? If there is no sorrow in life how can you enjoy fun? So these things are as interrelated as hope and depression. Depression becomes a problem when the period of depression...
What is a Reverse Mortgage? depression
Refinance > Tips to Control Depression
What Would Jesus Invest In?
What Would Jesus Invest In?
by: Alan Korber
According to the bible, we already know how Jesus felt about moneychangers in a house of worship but what investments would Jesus possibly deem acceptable and suitable in today's society?
Residential Real Estate
A residential dwelling is a good place for a family to live in and a good thing for a family to own. A home can be the foundation and centerpiece for a family unit and family values. A good home...
What Would Jesus Invest In? mattress What is a Reverse Mortgage?
Refinance > What Would Jesus Invest In?
Refinance
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