October 2013

Using a Reverse Loan to Buy a Home

Not too many people are aware of the fact, that a Reverse loan can be used to purchase a home.   I have shared this information with many Realtors and yet they continue to not see what a great business opportunity this could be for them, particularly if they have a large client base they have established over many years.

The advantage of using a Reverse loan over a traditional one, makes it much easier to qualify for financing.   With a Reverse loan, income is not documented and FICO scores are not considered and they are not obligated to make mortgage payments.

As long as the applicant is at least age 62, will occupy the property and the funds for the down payment on the new property can be documented, they are as good as “approved”.

I am going to share an article over several consecutive posts about how one couple purchase a “second” home by using the funds from a Reverse loan that they acquired on their primary residence.   A clever way to buy that “vacation” property.

10/30/13 Reverse mortgage strategy can open door to second home – Spokesman.com – Oct. 20, 2013
Tom Kelly

Reverse mortgage strategy can open door to second home

“A reverse mortgage must be made against a primary residence, but the loan can absolutely be used to help purchase a second home.

While the proceeds of a reverse mortgage typically help seniors to “age in place” by making their home more comfortable for their retirement years, there are no limitations on how reverse funds can be used.

For example, the Caseys were seeking to lower their monthly mortgage payment on their primary home so that they could afford the monthly payments on a recreational cabin.

Instead of cashing other assets, paying the capital gain tax and plunking down the net amount as the cabin’s down payment, the couple took out a reverse mortgage, which accomplished the same goal.”

To Be Continued.

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USA Today and Boomers

“USA Today published an article about the baby boomer generation and how they view retirement.   This is the generation that changed American culture and many, many ways and they are not necessarily going to quietly settle down.

Many are considering new careers or full-time volunteerism, but the last thing on their mind is to retreat from having an active and full life.

Here is a summary of the article that was shared by Reverse Mortgage Daily

USA Today: Retirement Therapists Helping Boomers Switch Gears
Posted By Alyssa Gerace On October 22, 2013 @ 5:08 pm In Reverse Mortgage | No Comments

Baby boomers are turning to retirement coaches and other types of senior advisers to help them navigate their “second acts” as they head into their mid-60s, says a recent USA Today article [1], and for some, that means a new career.

“It’s not always easy for Baby Boomers to switch gears as they approach retirement age,” writes USA Today. “Some have never given retirement a thought as they focused on their jobs and families. Many are more concerned about their retirement nest egg than on creating a second act of life. But suddenly retirement may be looming ahead without a plan.”

Some of those boomers without a defined plan are turning to retirement advisers they trust to help them find a new identity.

“Before, retirement was a destination,” Dorian Mintzer, a therapist and board-certified retirement transition coach, tells USA Today. “You had your retirement party and bought your condo in Florida. Now it’s a process. It’s a journey that can be daunting but can be very exciting, too.”

Sometimes the journey turns into a new, post-retirement career.

Boomer Peter Johnson tells USA Today he never thought about retirement in terms of leaving the workforce. Instead, once his children graduated from college and their education was no longer an ongoing expense, Johnson decided to leave a career in marketing, Internet advertising, and raising capital for tech business to go back to college and get a doctoral degree in marketing.

At 63 years old, Johnson works full-time as a faculty member at Fordham University in New York City.

“[N]ow that people will be working well into their 70s,” says Marci Alboher, author of The Encore Career Handbook, “I bet we’ll be seeing more people doing what Peter did.”’

Click here to read the article:

Written by Alyssa Gerace [2]

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Retirees and Mortgage Debt

Research that was complied by the Center for Retirement research at Boston College, has found that two out of three people  in their 60’s( the Boomer generation) is carrying more debt now than they did in the 1990’s.

Few will be able to retire due to the loss of retirement funds in their portfolios when the Financial crisis occurred in the last 6 years.   This does not bode well for most of them, as they will be forced to continue to work to make mortgage payments and meet their costs of living.

Of course a Reverse loan could at the least, eliminate any existing mortgage payments and help them preserve any retirements funds that they may have, by eliminating any or less withdrawals than they would ordinarily make  when they would need additional funds for expenses.

Here is a partial copy of the article that discusses this.   The reminder of it will be in my following post.

Level of Debt Among Retirees Continues to Surge

Posted By Elizabeth Ecker On August 25, 2013 @ 6:36 pm In Reverse Mortgage | No Comments

“Nearly two out of three people in their 60s have today are carrying debt, up from half of the same age group in 1998. The level of debt as a share of assets is also on the rise, at 18% versus 10% 15 years ago, according to research [1] cited by the Center for Retirement research at Boston College.

Regardless of income level, the trend holds true, Center for Retirement Research writes, based on Urban Institute data presented at a recent Retirement Research Consortium.

In large part, the shift is due to mortgage debt being held by retirees. Older Americans are paying off mortgages more slowly than in the past, and mortgage balances have increased, write the BC researchers, in a blog post this week. ”


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