A reverse mortgage can be a way for senior citizens who own their own home to pay for daily expenses, medical bills, or in some cases, even a vacation. The program works by allowing these homeowners to borrow against the equity in their home without having to repay the loan so long as they continue to live in their house.

To qualify for a Home Equity Conversion Mortgage (or HECM, a reverse mortgage insured by the government), participants must meet the following requirements:

• All of the homeowners must be 62 years old or older and live in the house as the primary residence.
• Have a fully-paid mortgage, or a small mortgage that can be paid off with at the loan’s closing with the proceeds from the reverse mortgage.
• Applicants must attend a counseling session with an approved counselor.
• Applicants must live in a single-family house, a townhouse, be the homeowner in an owner-occupied two to four unit dwelling, or in a planned unit development. Some types of manufactured housing is eligible, however most mobile homes or co-ops are not.
• The qualifying dwelling must be at least one year old, and it must meet HUD’s minimum property standards. However, if repairs are needed, they can be funded through the loan.

For more information, or to find out if you qualify for a reverse mortgage, call 800 559-4287 to find an approved HECM counselor.

By David Plowman

Click to Comment   |  Comments (0)  

If you are 62 years or older and own your own home with a fully-paid mortgage, you may be eligible for a Reverse Mortgage, a program that allows you to borrow against the equity in your home without having to repay the loan so long as you continue to live in your house.

There are several types of reverse mortgages offered by banks and lending institutions, but perhaps the most popular program is the Home Equity Conversation Mortgages, and is the only program insured by the Federal Housing Administration.

If you qualify under specific eligibility requirements, you may be able to receive a lump sum payment, a monthly installment payment, a credit line that you can use as needed, or a combination of these options. The total loan amount is based upon you age, the value of your home and the loan’s interest rate and miscellaneous loan fees.

The loan is not payable until sell your home, no longer live in your home, or die. The loan and its costs are paid when you (or your heirs) sell your home. You or your heirs will receive the selling price of the home, minus the load and its costs of the loan costs.

By David Plowman

Click to Comment   |  Comments (0)  

A home equity line can be a good alternative to a home equity loan. With a home equity line, you are given a line of credit and issued blank checks. You are charged only on amount you use, not on how much your line of credit is.

This may provide you with a much greater flexibility if you don’t know how much a particular project, like a home renovation, will cost you over an extended period of time.

Additionally, your pay back options may be more flexible. With a home equity loan, you will have to make established monthly payments over the term of your loan. With a line, your payment is based on the amount of credit you used, so you have greater control of your payback amount.

When shopping for a equity credit line, compare the “draw period,” or the length of time you can write checks against your equity. In many cases, banks offer a draw period of up to 10 years, and offer a repayment window of an additional five years.

Make sure to check your credit line checks secure. Since any amount written goes against the equity in your home, the consequences of having them fall into the wrong hands could be great.

Depending on your financial needs, a home equity line may be a flexible alternative to a home equity loan.

By David Plowman

Click to Comment   |  Comments (0)  

Need a way to pay off credit card debt, pay for home improvements, or wedding? If you need cash for whatever reason, a home equity loan may be the answer.

These loans are based on the amount of equity, or the difference between the value of your home and the amount you owe, you have in your home. Many packages enable you to borrow up to 70 to 90 percent of your equity.

Compared to mortgages, home equity loans generally offer lower interest rates, and are a “hot product” offered by several competing banks and lending institutions. Shop around to make sure you are getting the best deal.

When shopping for a home equity loan, be aware of the following:

• Many institutions will offer low “teaser rates” for the first year of the loan. Make sure you
  calculate the interest rate for the full term of the loan .
• Include any fees the lender may tack on to the loan.
• Remember, the loan with the lowest monthly payment may not be the least expensive one.
• Know how many payments you will need to make, the total amount you are borrowing, and the total amount you are repaying.

By comparing different loan quotes and doing your homework before you sign an application, you will be better informed and will be more likely to get the best deal on a home equity loan.

By David Plowman

Click to Comment   |  Comments (0)  

Buying a home is a tremendous investment. You will be able to receive tax breaks, and if home values continue to appreciate, you will likely make a profit if you re-sell your home down the road.

But you don’t need to sell your home in order to take advantage of its value. In fact, there are several options, including re-financing, home equity loans, home equity credit lines, debt consolidation and reverse mortgages.

Below is a brief description of these loans:

• Home Equity Loan: Many people take out these types of loans to make renovations on their home, consolidate debts, pay off medical bills, or even to help send children to college. Whatever the purpose, these loans work in much the same way. They borrow against the equity in your home (the difference between your home’s current value and the money you owe on it).

You will receive the loan amount in one lump sum, and will pay the balance, interest and other fees over a specified time.

• Home Equity Line: This works in much the same way as a home equity loan, However, rather than receive a lump sum payment, you are issued blank checks which you write as needed (up to a pre-approved amount.) Your loan balance is for only the amount of the checks you’ve written, plus interest and fees. This may be preferable to a lump sum payment if you don’t know the exact amount you will need to borrow, or if you will be completing a project where you will be making payments over time.

The advantage to these loans is the interest rate is generally much lower than other lines of credit such as credit cards, and the interest paid is usually tax deductible.

Remember a Home Equity Loan or a Home Equity Line is not a source of “free money” Like any other type of loan, it must be repaid. Failure to repay these loans could result in foreclosure of your home. However, if used wisely, these home equity loans can be a tremendous way to tap into your home’s value.

By David Plowman

Click to Comment   |  Comments (0)  

By David Plowman

Buying a home can be one of the biggest purchases most of us will ever make in a lifetime.

In fact, for many people, the task can be so daunting that you don’t know where to begin. But like any other major goal, the process can be made more manageable by breaking the tasks up smaller steps. Complete one goal at a time, and soon you’ll see yourself on the road to home ownership.

Below are some of the major steps toward owning your own home:

1) How much can you afford?
2) Learn about your rights, such as fair housing and fair lending.
3) Find and pre-qualify for a loan.
4) Find out if there are any home-buying programs.
5) Shop for a home.
6) Make an offer.
7) Get a professional home inspection.
8) Get a homeowners insurance policy that suits your needs.
9) Come to the closing prepared.
10) Enjoy your new home!

Of course, most of these steps can in turn be broken down into other smaller steps. And in the coming weeks, we’ll take a closer look at those steps. Stay tuned.

Click to Comment   |  Comments (0)