Wednesday, May 16, 2007

How do I receive proceeds of a Reverse Mortgage?

Reverse Mortgages - How do I receive the proceeds of my Mortgage?
By Nancy Woodward

There are several ways for you to obtain cash from your home using a reverse mortgage without having to repay the loan at all. When you obtain a normal mortgage, you decrease your loan thereby decreasing your liability and increasing your equity. Since this type of mortgage(Reverse Mortgage) works exactly the opposite of a normal mortgage, it essentially increases your liability to the lender and decreases equity in your home.

Four ways to receive the proceeds of your loan:

1. Lump sum - You can take all of the money at one time in a single lump sum of cash.
2. Cash advance – You can take a regular cash advance – i.e. monthly
3. Credit line - You can use an account that will allow you to take cash when you want it up to a maximum amount.
4. Using one or more of the above ways – this gives you the freedom to choose when and how much you want to take. This way can be used to effectively reduce the interest added to the balance of your loan.

After you qualify for your loan and receive funds, no one will have to repay this loan until you die, sell your home, or move out of your home on a permanent basis. You will have to qualify for the loan:

1. You must own your own home
2. You must live in this home
3. You must be 62 years of age or older.
4. Generally you must not have a mortgage loan on your home – generally Reverse Mortgages must be the ‘first’ mortgage.

While Reverse Mortgages can help you remain in your home, you are still the property owner. This means you must pay your property taxes and homeowner insurance, and making repairs on the property.

While you cannot have another first mortgage, it is possible to pay off existing debt, both in your home and credit debt, and with the money you obtain from your Reverse Mortgage proceeds.

As Americans are aging, society is seeking more ways to help them maintain their lifestyles by remaining in their home as long as possible. This is a way homeowners can obtain the necessary income without additional expenses.

As in any financial arrangement, I suggest you do your due diligence. Investigate the subject, talk to your attorney and perhaps your relatives and friends prior to moving forward.

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Tuesday, May 15, 2007

Why Consider a Reverse Mortgage?

by Nancy Woodward

There are so many reasons for you to consider creating a reverse mortgage. You could create a major list if you choose to do so. I believe there are some very valid reasons to do so such as:

1. Supplement your income. Many retired folks reach a point of needing more money to keep up with the cost of inflation.

2. Of course your income may be insufficient to maintain a minimum quality of life lifestyle.

3. Pay off debt. Your debt level needs to be low to non-existent when you retire.

4. Pay property taxes. Rising property taxes are an issue for working folks so..

5. Medical Expenses. Unforseen medical expenses or rising medical expenses will drain your income.

6. Health Care - in your home. Should you reach a point of needing daily help to stay in your home, you may need a greater income to maintain this expense.

7. Home repairs and/or home improvements. You must keep your home in good shape to avoid larger expenses to repair deterioration. A new roof or other capital repair may need to be financed.

Okay, they are the reasons I would consider getting a Reverse Mortgage. There are an unlimited number of reasons, some of which, I just would not consider:

1. Travel

2. Vacation home purchase

3. Helping relatives and friends financially.

4. To pay for luxuries.

You can make your own decision for your reason. I suggest that you carefully investigate all the posibilities before you sign mortgage documents. It is always advisable to do your due dilligence.

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Thursday, May 10, 2007

Have you seen the consumer incentives around today?

by Nancy Woodward

How about -

Zero Financing Deals
Cash Back
Free Checking Accounts
Refinance your home at low rates

There are so many offers around today. You must do your due dilligence and check them out carefully.

You don't want to find yourself owning even more money, paying higher interest rates, having large balloon payments to make because you didn't understand or read the bottom line.

You can find professionals to help you decipher the legalese or pay your attorney a visit.

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Wednesday, May 02, 2007

To my loyal readers --

Unfortunately I have been remiss. I have not posted in a few weeks. This was due to family needs.

I am back on track and should be posting regularly. If you have a question related to this subject, I'd like to know.

Thanks for your loyalty.

Do I Qualify for a Reverse Mortgage Loan?

Do I Qualify for a Reverse Mortgage Loan?
by Nancy Woodward

This is a good question I received from a friend. There are guidelines to qualify.

1. You must own a home. You can own this home with others but your name must be on the title of the home.
2. You must live in the home and it must be your primary residence.
3. You may be eligible even if you have a small loan on this home whether it be a mortgage or secondary loan.

While these are easy qualifications, you must continue to own the home and live in it for the loan to remain open.

You will not have to make payments on this mortgage. You won’t need to qualify for the loan other than the value of your property must be ascertained. You won’t be asked questions about your health.

Easy… Yes, but consider the costs prior to moving forward.

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