Archive for the ‘Reverse Mortgages’ Category

Reverse Mortgage Is A Special Kind Of Loan

Tuesday, March 6th, 2007

http://the-reverse-mortgage.info/ Further information can be
found at http://find-medicine.info

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Advantages And Disadvantages Of A Reverse Mortgage

Wednesday, February 14th, 2007

http://www.finance-journal.com and is an occasional contributor
to several other websites, including
http://www.onlinebusinessgazette.com.

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Planning For A Comfortable Retirement

Saturday, February 3rd, 2007


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Getting Money From A Reverse Mortgage

Tuesday, January 30th, 2007

A reverse mortgage allows homeowners over the age of 62 to cash
in on the equity of their home.The homeowner can use these funds
in anyway they want.Some have used the money for extended term
care or home improvements.Homeowners usually run into very
little difficulty in securing these funds.The funds are
practically free because with the exception of the fees, more
than likely, the mortgages will not be paid back over the
course of the homeowner�s life.

There are several payment options to choose when receiving
funds from a reverse mortgage. In most cases you can choose one
or more of them based on your needs.

* Getting your money in a lump sum: Most often the money from a
reverse mortgage is paid in a lump sum. You will receive one
payment which equals the value of your home.

* Getting a specific amount paid over the course of a number of
years: With this option the homeowner will receive payments over
a specific course of time, 10 years for example. This could be a
great help in managing funds over a period of time.

* Getting a specific amount paid to the homeowner every month
until they die or permanently move out of their home:
Receiving monthly payments gives the homeowner a sense of
security in knowing that their money will not run out before
they die.

* Getting a line of credit. Funds can be provided as a line of
credit and be paid back to the lender. A specific amount could
be taken out to make repairs or to pay a bill as the funds are
needed.

Getting the right type of terms for your needs is totally up to
you.Give thought to what your needs are, how much funding is
required and how soon you will need the funds. Some homeowners
have gotten a lump sum and transferred it into a savings
account until needed. The funds are yours and you can do
whatever you want to with it with no restrictions.

About The Author: Tom Atkins is a staff writer at
http://www.finance-journal.com and is an occasional contributor
to several other websites, including
http://www.debt-journal.com.

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Basic Mortgage Terms Everyone Should Know

Saturday, January 13th, 2007

Acquiring a mortgage is a big step in anyone�s life. Knowing
the terminology that is associated with a mortgage is the first
step in making the right decision when selecting a mortgage type
and term. Common terms are explained in the following sections.

What is amortization?

Amortization is the payment of a loan or debt through
systematic payments that continue on a scheduled basis until
the loan is repaid in full. An amortization schedule lists each
payment and its details for the life of the loan. It indicates
the total payment amount and breaks that amount into the
portion that is applied to the principal, as well as, the
interest.

What is an adjustable rate mortgage?

An adjustable rate mortgage, also known as ARM, is one in which
the interest rate fluctuates according to predetermined
conditions set at the time the loan is arranged.

What is a balloon mortgage?

A balloon mortgage is one in which fixed payments are made for
a predetermined number of years and then is paid off in full.
This final, single payment is considerably large and referred
to as the balloon payment. This type of loan is popular with
individuals who are expecting to come into some money later in
time, such as an inheritance or the sale of other property.

What are closing costs?

The closing, known as settlement, is the finalization of the
purchase of real estate. The costs that are associated with
this are known as closing costs. Closing costs will include
recording fees and documents, the origination fee, charges for
surveys that have been taken, points, the cost of the title
insurance, attorney fees (if an attorney is used), the cost of
the title insurance, payment of real estate taxes, and payment
of insurance on the home. Closing costs may include other fees.
Additionally, the seller occasionally pays some of the costs for
the buyer, but this is prearranged prior to the actual closing
itself.

What is collateral?

Collateral is property that has been offered to secure the
loan. Usually, the real estate that is being purchased is used
as the collateral, since it can be repossessed if the loan
payments are not made or the loan is not repaid in full.

What is a conversion option?

A conversion option allows certain loans to be changed. Certain
conditions must be met.
Balloon loans and adjustable rate mortgages can be changed into
fixed rate mortgages under these conditions.

Why is my credit score important?

A credit score is a rating given to a person based upon the
individual�s current and past credit history. It is calculated
for the purpose of determining an individual�s credit
worthiness. It will include information gleaned from credit
card usage and payment history, past mortgage history, other
bank loan history, and any other financial matters.
A credit score assists the lender in determining the risk
factor, if any, in lending money to the individual.

What is default?

Default is the failure to make the mortgage payments or to pay
the property taxes on the real estate in question.

What is a down payment?

A down payment is the money, cash, or check that an individual
pays towards the purchase price of the house. This is not
financed.

What is an escrow account?

In general, lenders set up an escrow account to hold money that
has been collected each month along with the loan payment. It
includes a percentage of the money that needs to be paid toward
property taxes and insurance. The lender will then make the
payments at the appropriate time.

What is a first mortgage?A first mortgage is the one that has the primary lien against
the property. The holder of the mortgage has first claim for
repayment.

What is a fixed rate mortgage?

A fixed rate mortgage, also known as a traditional mortgage, is
one in which the mortgage payment is set and never fluctuates.
The interest percentage remains the same throughout the loan�s
term. While the payment remains the same, the amount of money
that goes toward the principal gradually increases as the
amount that goes toward the interest gradually decreases.

What is floating?

If the purchaser decides not to lock-in the interest rate at
the time they apply for the loan, this is known as floating.

What is a Good Faith Estimate?

A Good Faith Estimate is an estimate of what the settlement
costs at closing will be for the borrower of the loan.

Do I need insurance?

Lenders require that insurance be held on the home, and that
they are listed as beneficiary on this insurance. It is their
way of guaranteeing that they will not lose any money should
the home be destroyed, damaged, or any liability claims are
placed against the homeowner. The insurance claims are subject
to the predetermined conditions of the insurance.

What is Interest?

Interest is the amount of money that a lender, usually a bank,
charges for loaning money.

What is an interest only mortgage?

An interest only mortgage is one in which the borrower pays
only the interest due for the first term of the loan. This
often allows first time purchasers the ability to buy a home in
a higher price range. After a predetermined number of years, the
loan becomes a fixed rate loan in which the borrower pays the
interest and principal for the remaining duration of the
mortgage.

What are points?

Points are equal to 1 % of the amount of the loan. For
clarification purposes, consider that the amount of the loan is
$100,000. One point is equal to $1,000 or 1% of the loan. If
three points are charged, they are equal to $3,000. The lender
who is making the mortgage loan charges points. Points are
negotiated along with the interest rate and term of the loan.
Occasionally, points are credited to the borrower.

What is a late fee?

A late fee is a small monetary charge that is assessed to a
borrower who is late making a mortgage payment.

What is a lien?

A lien is created when a person borrows money using the home as
collateral. It is a claim against a property that needs to be
repaid whenever the home is sold.

What is a loan balance?

The loan balance is the amount of money that is remaining to be
paid. It is the principal balance that has not been paid yet.

What is a loan term?

The loan term is the number of years that the loan is held or
amortized. Generally, loan terms of fifteen, twenty, or thirty
years are popular.

What is an origination fee?

An origination fee is a charge that a lender charges to process
the loan application.

What is PMI?

PMI, otherwise referred to as private mortgage insurance, is
insurance or protection against default by the homeowner. It
protects the lender from a loss of his monetary investment. The
borrower purchases this insurance from a private insurance
company and the premiums are usually included with the mortgage
payments.

What are property taxes?

Property taxes, assessed by local or state governments, are
taxes assessed on the real estate. The homeowner must pay these
annually.

What is a recording fee?

A recording fee is a charge to record documents. The documents
are a matter of public record and therefore, must be included
in public records. A recorder�s office handles the transaction.

What is a reverse mortgage?

A reverse mortgage allows homeowners to receive a sum of money
from a lender that they do not need to repay. The equity of the
home is used as collateral. The loan is repaid when the home is
sold. Three different types of reverse mortgages exist and they
are popular with senior citizens.

Being well-informed is equivalent to being well-prepared. A bit
of careful research and comparison shopping is all that is
necessary before selecting the right mortgage for you.

About The Author: Steve Baik is a contributing editor for
multiple websites related to credit and personal finance. He is
the chief editor for http://www.creditservicer.com. He also
edits part-time for http://www.apexcreditcards.com and
http://www.dollarguides.com.

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How A Reverse Mortgage Works

Thursday, January 4th, 2007

Ever wonder how a reverse mortgage works? For folks that have
lived in their home for a long time, they may very well be
sitting on a gold mine. Home prices have increased greatly over
the last thirty years, and nationally have nearly doubled in
value over the last ten years. This has left a great many
homeowners with valuable equity in their homes and many
different options to access that equity, home equity loans and
mortgage refinances being the most common. For older Americans,
there is another, less common option that is growing in
popularity as home prices have increased and baby boomers have
moved closer to retirement age: the reverse mortgage. But do
you know what it is, and do you know how a reverse mortgage
works?

What exactly is a reverse mortgage? A reverse mortgage is a
loan product that allows homeowners 62 years of age and older
to use their equity to generate tax-free income, without having
to sell the home or take on a new mortgage payment. In fact the
reverse mortgage is exactly what the title states, the reverse
of a standard mortgage. With a standard mortgage, the borrower
(or homeowner) makes monthly payments to the lender (or bank or
mortgage company), in order to pay back the loan that the lender
originally lent to for the purchase or refinance of the house.
This payment includes interest that the lender charges the
borrower for the loan. In a reverse mortgage, the situation is
reversed; the lender makes monthly payments to the borrower.
However, in both a standard and reverse mortgage, the lender
secures their loan amount by using the house as collateral.

There are a few factors that determine how much money a
borrower will receive from a reverse mortgage, such as the
value of the home, borrower�s (and co-borrower�s) age, current
interest rates and any lending limits that may be standard for
your geographic area. As a rule of thumb, the older the
borrower and the more valuable the home, the larger the
available loan amount. Homeowners can choose how they want to
receive their payments, either as a lump sum, monthly payments
or as a line of credit. The line of credit is the most popular
option, with nearly 60% of reverse mortgage borrowers choosing
to the option to draw income or a lump sum off the line at the
time of their choosing. And the proceeds from the reverse
mortgage can be used for anything, completely at the discretion
of the borrower, though most borrowers use the funds for home
repairs or modifications, health care expenses, to settle other
debts, or for their long-planned vacation! Reverse mortgages are
available for nearly all property types with the exception of
co-ops, though co-op owners in some metropolitan areas,
specifically New York, should have local options. If you are in
retirement, or nearing retirement, and think this may be the
product for you, I will go into more detail about exactly how a
reverse mortgage works.

For reverse mortgage borrowers with an existing mortgage, that
mortgage will need to be paid off completely, so that the new
reverse mortgage will be the only lien on the house. If the
proceeds from the reverse mortgage are not ample to pay off the
existing mortgage, the borrower will need to access savings or
other sources to pay off the rest of existing mortgage amount.
In this scenario, the borrower won�t have access to any
additional funds from the reverse mortgage; however, they will
no longer have a mortgage payment! The more common scenario is
one in which there is a small or no mortgage on the home and
then the borrower is able to access nearly the full amount of
the reverse mortgage to use at their discretion. No monthly
payments are due on the loan and the loan is repaid when the
moves or sells the home, passes away, or ownership otherwise
changes hands. If the home is sold and the proceeds of the sale
exceed the mortgage amount, the balance belongs to the borrower
or their heirs.

One very important facet of the reverse mortgage process is the
consumer counseling that is required for borrowers contemplating
a reverse mortgage. Your lender can help you find counseling
agencies and most programs are approved and monitored by HUD
and/ or AARP. The counseling is required to make sure that the
terms and risks of the program are clear to you. Counselors are
obligated by law to review with you all of the implications of
the new mortgage, and what your potential options are.

Overall, for older Americans contemplating a stress-free
retirement, the reverse mortgage may be just the option! Just
make sure that you know your options and goals� and how a
reverse mortgage works.

About The Author: Brad Stroh is currently co-CEO of Freedom
Financial Network and http://www.Bills.com. If you would like
more of Brad�s http://www.Bills.com/sitemap/, please visit the
Bills.com information on http://www.Bills.com/mortgage/.

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What Are The Requirements For Reverse Mortgage?

Sunday, December 24th, 2006

What exactly are reverse mortgages? Have you heard of them?
Well, let=EDs start off by saying that they could make life
easier for you. There are a whole lot of benefits in reverse
mortgages that could be very welcome as far as you are
concerned when you are in need of money.

Reverse mortgages have been found to be a reasonable solution
to many problems for many people. When there are funds required
for home improvement or funds for medical aid, etc, people find
that they get the funds required though reverse mortgages
without really paying for it. At times there are fees involved
that can actually reduce the amount that is paid to the house
owner and the amount is far smaller than the loan required.

One has to be at least 62 years old to qualify for a reverse
mortgage and generally there are no checks like credit or other
checks that are carried out. Mobile homes however, do not
qualify for a reverse mortgage. Homeowners can be single or a
couple and those who have some equity on their home will be
able to get this based on whether they own or not only. But if
money is owed through a lien or some other mortgage, then it
needs to be paid off using the reverse mortgage and if that
amount is insufficient, then your personal savings will have to
be used.

Another point to keep in mind is that if there is an ongoing
case for bankruptcy filed then getting the reverse mortgage
will be delayed till the case is over. This is because it needs
to be confirmed that the house is not part of any bankruptcy
claims and the owners will continue to be title holders of the
house.

An additional option is where the local or state government
actually helps fund the reverse mortgage and this becomes an
additional option. Most of these mortgages which are taken are
backed by the FHA. This provides that if the homeowner dies or
moves out of the house and the proceeds are not enough to cover
the cost of the reverse mortgage, then the FHA will ensure that
the balance funds are cleared by them.

Many lenders and governments give out reverse mortgages and if
you meet the criteria then you could benefit from it and make
your life a little more trouble free. That=EDs the basic promise
that reverse mortgages give you =F1 to make your life a little
bit easier when you need to pay money for something.

About The Author: Tom Atkins is a staff writer at
http://www.finance-journal.com and is an occasional contributor
to several other websites, including
http://www.debt-journal.com.

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Who Can Benefit From A Reverse Mortgage?

Saturday, December 23rd, 2006

Reverse mortgages are becoming an increasingly popular lending
option for older Americans. Reverse mortgages allow homeowners
over the age of 62, the ability to convert a portion of their
homes� equity into cash, which they can receive in monthly
installments or through a line of credit. This short article
will provide a brief overview of the reverse mortgage process.

Reverse mortgages provide a sense of financial security for
older Americans because they provide a supplement to social
security income.

Individuals may receive payments on a term, tenure or
line-of-credit basis. Repayment of the loan is not required
unless and until the home owner decides to sell the home, or no
longer uses the home as his/her primary residence. When either
of these two conditions is met, the homeowner is then required
to pay back the cash they received from the reverse mortgage.
This repayment includes interest and other fees. The remaining
equity, if any, belongs to the homeowner.

In order to be HUD eligible for a reverse mortgage loan, an
individual must obviously own the home in question, must be 62
years or older, own the home outright, or have a mortgage
balance low enough so that the mortgage balance can be paid in
full at closing with the proceeds from the reverse loan. The
individual must also go through HUD approved counseling. Single
family homes, two or four unit properties, town homes, detached
homes and some condominiums and manufactured homes are all
eligible for a reverse mortgage.

Reverse mortgages can be a great option for older Americans.
They provide extra income that often helps older Americans meet
their financial needs. It is an extremely attractive option for
individuals who plan to stay in their homes indefinitely,
because the loan does not have to be repaid unless the
individual moves out of the house.

About The Author: For more information on better Mortgages as
well as great
http://www.lenoxnationalmortgage.com/navigation/index/Home-Mortgage.html,
tips, techniques, and money-saving info visit
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Home Remodelling Loan And Checklist Before Picking A Home Remodelling Loan.

Saturday, December 23rd, 2006

On one weekend, a Saturday in particular, I decided to attend a
seminar on home remodelling. I Usually prefer to call it home
renovation. It was basically for the elderly people.

Am not in the elderly bracket but I decided to attend anyway
because I was feeling a bit lonely and wanted to be occupied.
On looking around the room, I saw that most people were in my
age group.

Think it is because they have to meet most of the cost for
refinancing the renovation of the home of their old ones.

This seminar turned out to be good to me and at the end I was
convinced it was a good take.

In this seminar, it was revealed that research so far shows
this:
It will probably cost anywhere from $100,000 to $150,000 to do
a good renovation of a house for the elderly. This seems a
staggering amount, until you consider that it would cost them
from $3,000 to $5,000 per month if they were to rent a unit in
a retirement facility in a location where they might not be as
happy. Looking at it from that point of view, in four years or
less, they would have spent the money anyway, and at least
making home improvements allows them to continue to live in the
same location and keep their asset.

The biggest challenge many older adults face when renovating
their homes is how to pay for them. Many are on fixed incomes
with few resources. Their property may have increased in value,
but they are cash-poor.

During this seminar, a flyer was distributed that provided a
telephone number for the city and county Elderly Affairs
Division Rehabilitation Loan Program. Many cities have similar
funds available as a means to assist individuals to stay in
their own homes, rather than move to more costly facilities.

I learnt that the loan program was available to a person or
family requiring home modifications, based on a health or
safety need. The home loan program required that an application
be submitted with information about the number of persons living
in the household and their combined annual income. This
information was then used to determine the interest rate for
the loan. For example, for combined incomes of less than
$41,000 or so, the interest rate was 2 percent; for less than
$52,000, 4 percent; and so on.

Another thing I learnt is that you can also have an option,
which is that of a reverse mortgage. A reverse mortgage is a
special type of home loan that lets a homeowner convert a
portion of the equity in his or her own home into cash. The
equity built up over years of home mortgage payments can be
paid to the owner, but unlike traditional home equity loans or
second mortgages, no repayment is required until the borrower
no longer uses the home as the principal residence.

Reverse mortgages are available through different lenders, as
well as HUD. There are some property restrictions, but
single-family homes, two-to-four-unit properties, condominium
units, townhouses, and some manufactured homes are eligible.
Generally, the greater the value of the home, the older the
owners, the lower the interest rates, and the more one can
borrow. This is good news right now, with interest rates so
low, and it is an opportunity for your patients who have a
higher annual income that disqualifies them from other
programs. And if they live in an area of the country where land
or home values are traditionally higher, such as Hawaii or New
York, it may be the best option available for refinancing.

Given the sheer amount you have to invest or borrow, here is a
checklist before you decide on any renovation project.

Consider the following before you decide how to finance your
home improvement project:

-Talk to lenders about your options.

– Know that lenders are concerned about income, debts, credit
history and property value.

-Consider a secured loan when you want to borrow more money,
get a lower interest rate or reduce taxes.

-Refinance an existing loan if you have enough equity and if
the rates are two points lower now than when you initially
borrowed the money.

-Use a home equity line of credit that is secured by your home
so youre your interest is tax deductible.

-Take out a home equity loan to get fixed rates and payments.

-Consider a homeowner loan that is secured by your property.
Use a value added loan when the improvement you make will have
a substantial impact on the market value of your home.

-Do your research before using contractor financing.

Good Luck

Get more information on home loans and home remodelling by
Lubowa.M.Planet. Visit Home Loans and mortagewebsite.

About The Author: Get more information on home loans and home
remodelling by Lubowa.M.Planet. Visit
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