Get Reverse Mortgage even you do not need money.

If you do not have any heirs, if you are 62 years old or older, if you own a home witch you mind living in – it is a great idea to get Reverse Mortgage, even you do not need money, think of the extra things you could do with the extra money to enjoy the rest of your live more comfortably.The reason most seniors choose a reverse mortgage over selling is because they would rather remain in their home. They have an emotional investment in it, even more than a financial one. In every corner of the home, there is a memory. They are not necessarily looking for the best business decision, but the best personal decision. Many seniors are attracted to the idea of moving into newly built homes with access to golf, entertainment, communal activities, and to be in the company of others who share their interests. Many of these seniors would find it appealing to build a home without the burden of large monthly payments, which could hamper the lifestyles they are seeking. There are plenty of reverse mortgage lenders that would love to have you as their client. Now borrowers can choose from more than 20 different loan permutations — and counting.   The equity in your home is your money, and you should be able to have access to it any time you want. 

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The idea of moving into newly built home.

A lot of seniors are attracted to the idea of moving into newly built homes with access to golf, entertainment, communal activities, and to be in the company of others who share their interests.

Now day’s seniors have ability to finance the purchase of a newly constructed home using a reverse mortgage (new home without also taking on future monthly loan payments).

For example, 72-year-old purchasers could buy a $295,000 house in Orlando, Florida by putting down $190,000 in cash plus closing costs. The $105,000 differential represents the proceeds of the reverse mortgage. The purchasers would have no monthly payments to make as long as one of them continues to live in the property.

Federal Housing Administration (FHA) sponsored most reverse mortgages.  Purchase transactions under other reverse mortgage programs have been available for some time, legislation authorizing FHA to broaden its reverse mortgage program to include purchase transactions is expected to take effect shortly.

Consumers and builders have to work with experienced and reputable institutions who can demonstrate a track record with this specialized product.

 

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It is a nice way

It is a nice way to leave an estate mess for your loved ones, who won’t feel quite so loved anymore. Not everyone has children. There are a lot of singles or childless couples out there. But if you have nobody to leave your estate to, this allows you to take advantage of the equity while you are still alive. With a reverse mortgage you just take advantage of your home value to enjoy life a little more during the last years or spend money (which are really your own because you get the money for your house).
Seniors who are good candidates for a reverse mortgage could get, on average, $72,128. These funds could be used to pay for a wide range of direct services to help seniors age in place, including home care, respite care or for retrofitting their homes.
On other side a lots of adult children of seniors are proud of their parents’ decision to take a reverse mortgage. Parents have chosen to remain independent, and to spare their children from having to “take care” of them during the years.

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Reverse Mortgage Terms.

Adjustable‑Rate Mortgage
A loan with an interest rate that changes with market conditions on pre‑determined dates.
Clear Title
Ownership of a property that is free of liens and/or legal question, as to the rightful ownership of the property.
Equity
Your ownership interest – that portion of a property’s value which exceeds the amount of any outstanding loans on the home. For example; if a property is worth $200,000 and carries a $50,000 loan, then you would have $150,000 (or, 75%) equity in your home.
Interest Rate
The rate of interest that is charged by a lender for the use of money, usually expressed as an annual percentage rate (APR).
Loan Balance
The outstanding balance of a Reverse Mortgage loan; equal to the principal amount, plus financed fees, plus all accrued interest.
Loan Proceeds
Payments to a customer through a Reverse Mortgage.
Mortgage
Legal document that pledges a property to the lender as security for payment of a debt.
Refinance
A process of paying off one loan with the proceeds from a new loan, secured by the same property.
Title
 A Legal document establishing the right of ownership.
Underwriting
A Process of a lender reviewing the application, documentation, and property prior to rendering a loan decision.  

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Most commonly-used mortgage terms.

Below is a list of the most commonly-used “mortgage phrases” and their meanings to help you understand them better: Closing – Final arrangements to transfer title of property as well as allocate charges and credits.Closing Costs – Closing costs are fees paid by the borrower when a property is purchased or refinanced. Costs incurred include a loan origination fee, discount points, appraisal fee, title search, title insurance, survey, taxes, deed recording fee, and credit report chargesEquity – The difference between the current market value of a property and the principal balance of all outstanding loans.Lender – The bank, mortgage company, or mortgage broker offering the loan. Mortgage – A legal document that pledges property to a creditor for the repayment of the loan, and is the term used to describe the loan itself.Principal – The amount of debt, not counting interest, left on a loan. 

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satisfaction with reverse mortgage.

Borrowers are satisfied with their reverse mortgageA borrower is under is free to use their reverse mortgage funds for any purpose they choose. A borrower may stay in their home for as long as they want, even after all reverse mortgage funds have been used or the balance exceeds the value of the home.All fees paid in the HECM program are regulated by HUD.  The Mortgage Insurance Premium paid to HUD makes up almost half of the costs associated with the reverse mortgageIt provides for a guarantee by the U.S. Government that the borrower will continue to receive their money from the reverse mortgage should the lender ever default.  When the reverse mortgage is due to be repaid the lender can only look to the property for repayment up to the balance of the reverse mortgage.  Should the balance of the reverse mortgage exceed the property’s value the mortgage insurance pays the shortfall to the lender so there is no debt left to the borrowers or to their heirs.Funds from a reverse mortgage may be received in a lump sum, a line of credit, monthly payments, or a combination of these options.  This provides seniors with the flexibility to customize the way funds are received to best meet their individual needs.A senior adult select a reverse mortgage lender with experience and knowledge so that they will be able to make a sound decision based on correct and complete information.  Furthermore, the lender should adhere to the National Reverse Mortgage Lenders Association’s (NRMLA) Code of Ethics and Professional Responsibility standards.

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Reverse mortgage – observations.

            Facts and observations about reverse mortgages:Make sure you read the fine print thoroughly…Seek necessary advice and get all the information, conditions, clauses and terms in writing

These loans can affect your centre link payments. You need to check with an accountant and centrelink before signing up.

The total amount of money you owe will never exceed the sale value of the house. So in the end after the sale of your house you will not owe the lender any additional money. This guarantee usually comes with a condition that the house should be of certain standard at the time of the sale. Read the fine print and make sure that there are no improper clauses attached with this guarantee.

The interest and fees are added on to the principal every month, the new loan balance is your original balance plus the new interest and fees. Interest is charged on interest…So very soon your loan balance balloons up. At an interest rate of 8% your loan balance can double in less than 10 years. If you take a reverse mortgage with a fixed term then be aware that you might have to sell and repay the loan in your lifetime.

The lender can evict the other person from the property if the property is just in one name and if that person dies.

Opting for this loan will reduce the inheritance your kids can get.   

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Reverse mortgage – aspects.

There are 3 basic types of reverse mortgage:
Single-purpose reverse mortgages: generally have very low costs and can be used for one purpose specified by the government or nonprofit lender.
Home Equity Conversion Mortgages (HECMs): these are usually costlier and up-fronts are generally higher when compared to other types of mortgages. The advantage of home equity conversion mortgages is that these are widely available, have no income or medical requirements, and can be used for any purpose.
Proprietary reverse mortgages: These typically private loans are usually backed by the housing development companies.The homeowner or estate always retains title to the home, but if you fail to pay your property taxes, adequately maintain your home, pay your insurance premiums, or change your primary residence, the lender can declare the mortgage due or reduce the amount of monthly cash advances to pay those overdue amounts.The homeowner can use a reverse mortgage to buy a house. (You are the seniors that sell their home and nets 300K. Next you can go buy a new home for about 500K, by putting down 300K, and financing the other 200K with a reverse mortgage). Talk to your kids about it.

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Life estate deed and reverse mortgage.

All borrowers on the deed at the time the reverse mortgage is originated must be at least 62 years old to get an FHA-insured HECM reverse mortgage. A couple may decide that it is in their best interest to pursue a reverse mortgage even though one spouse is not old enough. They must understand the significance and what must be done to achieve this. The younger spouse may be completely removed from the deed, or in some cases a new deed which is called a “life estate deed” is prepared. This life estate gives a future interest in the property to the younger spouse, essentially saying that if the older person passes away, the younger one automatically becomes the owner.

Borrowers obtain legal counsel on this matter to be sure that they fully understand how this move may affect them in the future. In the case of a life estate deed, what if the older spouse dies and the younger spouse is not old enough to obtain a reverse mortgage or not qualified to obtain a “forward” mortgage? And if the younger spouse is removed completely, what provisions are in place for the protection of the younger spouse? With proper guidance and planning from a qualified attorney, this can be accomplished to the satisfaction of all involved and the reverse mortgage can be completed.It is better to schedule a consultation with an experienced reverse mortgage consultant and an elder law attorney of your choice.

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Reverse mortgage – important points.

There are important points to consider about reverse mortgage:The homeowner doesn’t need good credit to obtain a reverse mortgage.The government or the bank does not own your home, nor will they ever.The reverse mortgage loan will pay off your existing mortgage if you have one.You will never have to make a payment of any kind toward the principle or interest.The proceeds do not affect your Social Security, Medicare, or any other benefits you receive.The proceeds are income tax free, because they are not considered income.Your estate nor your children will ever have to pay any extra money… ever!  With a reverse home mortgage, you get all the benefits of selling your house and all the benefits of getting a home equity loan – but you can still live in and retain ownership of your home and you don’t have to pay back the loan. No matter how you structure a reverse mortgage, you typically don’t pay anything back until you die, sell your home, or permanently move out.The only big disadvantage of a reverse mortgage is the high closing cost – which is only problematic if you plan to stay in your home for a short period of time.

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