Financial and business news and articles
Mortgage
3 Ways to Boost Retirement Income
Mar 10th
Looking for ways to boost your retirement income? Here are three ways to improve your financial situation to live comfortably during your retirement.
- Consider getting a reverse mortgage to supplement your income. Reverse loans convert home equity to cash and free you from making house payments every month. You can apply for a reverse home mortgage if you are 62 or older. However, it may pay to wait until you are closer to 70 to apply for a loan since the older you are the more you can qualify to borrow. Reverse mortgages are not right for all seniors, so talk with a qualified counselor to discuss the pros and cons.
- Pay off credit cards and other debt. You can use some of the proceeds from a reverse mortgage to pay off debt. But even if you don’t get a reverse loan, paying off debt is a great way to boost your cash flow. Think about what you can do with the money that you are currently putting toward debt repayment. Freeing up that money could allow you to save up for a vacation, get a more reliable vehicle, or paricipate in hobbies you currently can’t afford.
- Start a home-based business. Do you enjoy crafting, woodworking, writing, or gardening? Put these or other skills to good use so you can earn some income. The best part about having a home business is that you can work as little or as much as you want. Also, if you have physical challenges that keep you from going to a job everyday, a home business may be a good fit for you.
Some seniors are choosing to go back to work part-time to boost their retirement income. Whether you choose to work, get a reverse mortgage, or do both, it’s important to find ways to reduce your expenses to make sure you have enough income to live comfortably.
Should You Appeal Property Taxes?
Mar 9th
Cutting your expenses may be at the top of your financial to-do list. Even if you decide to get a reverse mortgage to supplement your income, you still may need to find ways to reduce your bills. Reverse loan proceeds can help pay for property taxes, but why pay more than you owe.
Review Tax Bill
Review your next property tax bill closely. You may be able to cut your property taxes by appealing the assessment. With property values down across the country, there’s a chance you may actually convince your local government to lower your taxes.
Even if your property value has decreased, it’s unlikely your tax assessor is going to update the information without your efforts. Make a trip to the tax assessor’s office to find out the procedure for filing an appeal. The appeals process varies depending upon where you live, so make sure you follow all the steps for your area.
Should You Appeal Taxes?
So when should you appeal your property taxes? If you find errors on the bill or in your tax records, such as incorrect square footage or too many rooms. You also may want to consider appealing if you paid more than you should have for your home when the housing market was booming.
Check Out Comparable Homes
Usually when you appeal your taxes you need to show that at least three comparable homes in your area have lower assessments. A real estate agent can help you find comparable homes using the multiple listing service. You also can choose to hire an appraiser to value your property and comparable ones in your neighborhood. Expect to pay an appraiser around $250.
Lowering your property taxes is just one way to make your money stretch further if you choose to borrow a reverse mortgage.
Discuss Reverse Mortgage with Heirs
Mar 8th
Getting a reverse mortgage is one way to supplement your retirement income. Before borrowing money it’s a good idea to talk with reverse mortgage heirs.
What Is a Reverse Mortgage?
If you plan to leave your home to your kids, it’s important to discuss how a reverse mortgage would impact their inheritance. First make sure they understand how a reverse mortgage works.
A reverse home mortgage allows you to tap into your home equity while you are still able to use the money. Reverse loan proceeds can be used for any purpose, including paying off debt, medical costs, or home repairs. The money does not have to be repaid until you move or die.
What about the Inheritance?
More than likely your kids may be concerned about what happens to your home after you die. Your estate has up to 12 months to pay off the reverse loan if your kids want to keep the house. If they don’t want the property, they can choose to sell the house to repay the balance of the reverse loan. Heirs would be able to keep any equity remaining in the property once the reverse loan is paid off.
Reverse Mortgages Pros and Cons
While a reverse mortgage can give a boost to your finances, there are pros and cons to borrowing money. Yes, a reverse loan can give you additional cash to live more comfortably. However, if you don’t budget this money carefully, you could run out of money sooner than you anticipate. Also, reverse loans have more fees than traditional mortgages, so it’s important to understand what you are paying for.
Talk with a reverse loan counselor approved by the Department of Housing and Urban Development (HUD) to get all the facts about borrowing money. You also can compare reverse mortgage quotes here.
Have Your Retirement Plans Change?
Mar 3rd
The economic downturn resulted in retirement plans using about a third of their value at the low point. Many people who are close to retirement now find themselves scrambling to cut back on expenses, saving more out of their paychecks, or even postponing retirement plans.
Delaying Retirement
A study by the Center for Retirement Research at Boston College found that about 40% of people ages 45-59 say they plan to retire later than they had before the economic downturn. The survey also found that for many people losing such a large chunk of their retirement savings resulted in stress levels equal to or higher than the stress they felt after the 9/11 attacks.
Retirement Planning and Reverse Mortgages
Do you feel stressed out about not having enough savings for a comfortable retirement? Have you looked at all your options for saving more money and funding your lifestyle? It’s important to investigate all our options, including reverse mortgages.
A reverse loan could allow you to supplement retirement income. Reverse mortgage loan proceeds can be used for any purpose, including home repairs, medical costs, property taxes, etc. While these loans won’t work for everyone, getting one could help your situation.
Reverse Loans for Seniors
You can only apply for a reverse mortgage is you are 62 and up. However, it can be worth your while to wait until you’re older to apply for a reverse loan. That’s because the amount of money you can borrow is based on your age, home value, and current interest rates. The older you are and the higher your home appraises at, the more money you can get.
Talk with a knowledgeable housing counselor to get the scoop on reverse mortgages pros and cons. Once you’ve discussed reverse mortgage guidelines you can make an informed decision about how one of these loans may or may not support your retirement plans.
Have Your Retirement Plans Change?
Mar 3rd
The economic downturn resulted in retirement plans using about a third of their value at the low point. Many people who are close to retirement now find themselves scrambling to cut back on expenses, saving more out of their paychecks, or even postponing retirement plans.
Delaying Retirement
A study by the Center for Retirement Research at Boston College found that about 40% of people ages 45-59 say they plan to retire later than they had before the economic downturn. The survey also found that for many people losing such a large chunk of their retirement savings resulted in stress levels equal to or higher than the stress they felt after the 9/11 attacks.
Retirement Planning and Reverse Mortgages
Do you feel stressed out about not having enough savings for a comfortable retirement? Have you looked at all your options for saving more money and funding your lifestyle? It’s important to investigate all our options, including reverse mortgages.
A reverse loan could allow you to supplement retirement income. Reverse mortgage loan proceeds can be used for any purpose, including home repairs, medical costs, property taxes, etc. While these loans won’t work for everyone, getting one could help your situation.
Reverse Loans for Seniors
You can only apply for a reverse mortgage is you are 62 and up. However, it can be worth your while to wait until you’re older to apply for a reverse loan. That’s because the amount of money you can borrow is based on your age, home value, and current interest rates. The older you are and the higher your home appraises at, the more money you can get.
Talk with a knowledgeable housing counselor to get the scoop on reverse mortgages pros and cons. Once you’ve discussed reverse mortgage guidelines you can make an informed decision about how one of these loans may or may not support your retirement plans.
Home Values Seem to Be Improving for Seniors
Mar 3rd
The average home value for seniors seems to be improving, according to data from reverse mortgage broker Golden Gateway Financial. Increasing home values are good news to people who want to get reverse mortgages.
Every Little Bit Helps
“Even a minimal gain in home value is a reassuring sign for older Americans, because many of these individuals live on a fixed income and rely on their home to support their retirement lifestyle,” Eric Bachman, founder and CEO of Golden Gateway Financial, told National Underwriter magazine.
Golden Gateway Financial’s latest quarterly study found that older Americans had a national average self-reported home value of $381,895 in the fourth quarter of 2009, compared with $369,762 in the third quarter. Florida, Texas, and New York were among the states that continued to see home values fall quite a bit.
Reverse Loan Appraisals
Of course the only way to determine how much your property is really worth is to have it appraised. When you apply for a reverse home mortgage banks require that an appraisal be done as part of the formula to determine how much you can borrow. The appraisal looks at the condition of your home, as well as similar homes in your community. It also factors in recent home sales in your area.
Reverse Mortgages Pros and Cons
Even if your home value is rising, it’s important to get all the facts about reverse loans before getting one. There are pros and cons to borrowing money with a reverse mortgage.
Advantages to borrowing a reverse mortgage are that the money can be used for anything and that you don’t have to pay it back until you move or die. On the negative side, reverse mortgages have more fees that traditional mortgages so you need to be aware of exactly what borrowing money this way costs.
You can get more information to evaluate reverse mortgages by comparing quotes here.
Reverse Mortgages and Affluent Homeowners
Mar 1st
Reverse mortgages aren’t just for low-income seniors. They are also being used by more affluent homeowners to supplement their income.
Reverse Mortgage and Travel
One couple profiled by HeraldNet is using a reverse loan to help them travel to their timeshares and participate in activities they enjoy. Some people frown on seniors using reverse mortgage loans for things other than necessary living expenses. But for individuals who are already financially secure, a reverse loan could provide a cushion to enjoy some of life’s luxuries.
“I know a lot of people are skeptical about reverse mortgages, but it worked for us,” Frank Williams, 77, told HeraldNet. “Our friends want to leave everything they have to their kids, and that’s OK. Our kids are doing fine, they own their own homes, and would rather see us enjoy the rest of our lives.”
Cashing out Home Equity
Reverse home mortgages allow you to take cash out of your home and use it for any purpose. Although many seniors rely on reverse loan funds to pay medical bills, wipe out debt, or make home repairs, there are some folks who see this money as a tool to upgrade their lifestyle.
An Important Decision
Remember, there is no right or wrong purpose for a reverse loan. What you do with this money is up to you. But the decision to get a reverse loan should not be taken lightly. You should never borrow large sums of money without knowing exactly why you need it and what if is to be used for. If you really don’t need the money right now, it’s probably a good idea to skip getting a loan.
A reverse mortgage counselor can discuss reverse mortgages pros and cons with you before you make a decision. You can also compare reverse mortgage quotes here.
Should You Use a HECM to Buy a Foreclosure?
Feb 25th
A Home Equity Conversion Mortgage (HECM) can be used to purchase another home if you plan to live in it as your principal residence. Does it make sense to use reverse loan proceeds to buy a foreclosure? Here are some things to keep in mind.
- Do your research before committing to purchasing a foreclosure. Search public records to see if a house has liens for unpaid property taxes or other bills. Also look at property records in the neighborhood to get an idea of what similar homes are going for in that market.
- Many foreclosures need repairs or maintenance that owners have let slide because they couldn’t afford to do the work. Be prepared to use some of the proceeds from a reverse home mortgage to do this work if you don’t have other funds available.
- Use reverse mortgage funds to buy a bank-owned property that has already gone through the foreclosure process. Unless you really know what you’re doing it’s best to avoid getting involved with a house where the homeowners are still living in it.
- Contact home builders in the area you want to live in. You just might find a brand new home that is facing foreclosure that you can get at a bargain-basement price. Also ask mortgage lenders if they have a list of brand new construction that has already gone through foreclosure.
- Consider using a real estate agent who is familiar with foreclosure activity in your housing market. An agent may have a list of homes that he or she has already seen and can steer you away from homes you aren’t interested in pursuing, such as those that require too many repairs.
Reverse Mortgage Can Help You Downsize
When considering using the proceeds from a HECM to relocate, it’s a good idea to downsize to a less expensive home. Avoid purchasing any foreclosure that strains your budget and leaves you in worse financial shape than when you started. Begin comparing reverse mortgage loan quotes to get an idea of how much you qualify to borrow to determine if it can cover a move.
Should You Use Reverse Loan to Buy a Car?
Feb 23rd
Are mortgage foreclosure rates linked to a home owner’s transportation costs? They are according to a recent study by the Natural Resources Defense Council (NRDC). The study found that the more cars households in a neighborhood have, the higher the probability of foreclosure.
The NRDC, a nonprofit that works to protect public health and the environment, examined data from 40,000 households in Chicago, San Francisco, and Jacksonville, Fla. The probability of mortgage foreclosure decreased in neighborhoods where residents weren’t as dependent on cars, after accounting for income.
Are You Paying Too Much to Drive?
Are you paying out too much of your income for transportation costs? The average American household spent about 17% of its income on transportation costs in 2008, according to the U.S. Bureau of Labor Statistics.
Reverse Mortgages and Transportation
You may have considered getting a reverse mortgage loan to buy a new car or pay off the one you currently have. Here are some things to consider before getting a reverse home mortgage for this purpose.
- Reverse mortgages can be used for any purpose, even transportation costs. But make sure buying a car is really the best use of your money. Even if you think you can afford a luxury car that might not be a wise investment on a fixed income. Look for a dependable vehicle that is less expensive.
- Are you struggling with constant repair bills for a vehicle that is way past its prime? If so, then it may be time to get a more reliable car or look into using public transportation more often.
- New cars begin depreciating practically when you drive off the car lot. If a reverse loan is used to pay for the purchase, consider buying a reliable used car instead of spending reverse loan money on a new car.
Reverse Mortgage Guidelines
Talk with a reverse mortgage counselor to get the facts on borrowing money. You can also shop for quotes to get an idea of the costs involved with getting a reverse loan.
Housing Counselors Have Tough Time Passing Reverse Mortgage Exam
Feb 22nd
Many reverse mortgage counselors are having troubled passing a test required by the Department of Housing and Urban Development. Only 995 counselors nationwide have passed the licensing test since it was revised last year, according to HUD.
Reverse Mortgage Test Is Difficult
“The test is intentionally difficult, but we believe it needs to be so because of the vulnerable population” who seek out reverse mortgages, a HUD spokesman told the Post and Courier. HUD made the licensing exam more difficult after numerous complaints that people who were providing counseling about reverse loans were not always well-informed.
Because of concerns about the difficulty of passing the test, HUD posted additional study materials online. But some experienced reverse mortgage counselors who have taken the test more than once still haven’t passed.
Reverse Loan Counselor Fails Test Repeatedly
Debbie Kidd, head of the Homeowner Resource Center at Family Services Inc. in North Charleston, S.C., who failed the test four times, told the Post and Courier, “It’s humiliating for me. I’ve done this for 20 years. … Why can’t we pass this test?”
Reverse mortgage counselors are required to pass the licensing exam. Because so many people are having a tough time passing the test, some areas are being left without counselors approved to discuss reverse home mortgages. Depending upon where you live it may be necessary to travel out of the local area to receive counseling face-to-face. Reverse mortgage loan counseling also can be done by phone.
Reverse Mortgage Counseling Is Required
If you’re in the process of applying for a reverse mortgage, you need to talk with a counselor. When choosing a counselor, find out if he or she has passed HUD’s new licensing requirements. Don’t assume that all counselors who work for a specific agency have passed the test.