I have been a Reverse Loan Consultant for almost 15 years and when I first started in this amazing and wonderful industry, the fees were very costly but that has changed over the last several years and the loan has become a terrific option to utilize one’s equity without being obligated to make mortgage payments each month.
My previous post was part of an article that I will share the remainder of here, but it discussed how much equity is in American seniors homes; well over $12 Trillion dollars and growing.
Seniors number 1 concern, is outliving their money. Let’s face it. No one can live on Social Security and if one is fortunate enough to have a pension and investments, there is the concern about drawing down on them too soon and…
Running out of money.
A Reverse loan can eliminate that fear and worry and if a senior would get over their fear an bias about them, they will find out that they are very affordable.
As a matter of fact, I can offer a No Cost Reverse loan. It just depends upon the size of the loan.
And the Title stays in their name or Trust AND THE BANK NEVER TAKES OVER THE PROPERTY.
Here is the remainder of the article that I’m carry over from the previous post.
The Street: Education is Key When Discussing Reverse Mortgages
September 5th, 2016 | by Alana Stramowski Published in News, Reverse Mortgage
There are some facts that homeowners need to know before taking out a reverse mortgage though. A small, but important detail that often is overlooked is the fact that the amount withdrawn during the initial year of taking out a reverse mortgage determines the mortgage insurance premium when the loan is closes.
The fees used to be extremely high, in some cases, but now, the Department of Housing and Urban Development (HUD) limits origination feed to just 2% of the first 200,000 of the maximum claim amount plus 1% of additional home value, but not exceeding at total of $6,000. according to the article.
Reverse mortgages can be extremely complicated for those homeowners taking a look for the first time, but with the proper education, they can see how the product could benefit them to support their overall retirement plan.
Read the full article on The Street.
Written by Alana Stramowski
Recently a report was published in the Journal of Personal Finance that discussed how using the Tenure payment option available in a Reverse mortgage, could possibly benefit seniors who acquire a Reverse loan.
The portion of an article that I am posting today, is part of a larger and longer piece and I have previously created three different posts that share it in smaller pieces for the reader. Here is part !V.
New Research Shows Financial Planning Value of Tenure Reverse Mortgages
Posted By Jason Oliva On March 3, 2016
“With the reverse mortgage options, purchasing a SPIA improves the security of retirement income, but does not increase the income,” the study states. “Combining SPIAs with reverse mortgages provides a way to gain additional retirement income security, but without much impact on the overall level of retirement income.”
Researchers ingrain their analysis around a scenario involving a husband and wife as borrowers, a couple which they believe presents a more typical situation for financial planners. Specifically, researchers assume the couple lives in a $400,000 home and that the husband is 65 and the wife is 63.
Based on August 2015 interest rates, for this couple the initial principal limit they would receive from a Home Equity Conversion Mortgage (HECM) would be $212,000, according to researchers’ calculations based on the reverse mortgage calculator provided by the National Reverse Mortgage Lenders Association.
Under this scenario, a borrowing couple utilizing the reverse mortgage tenure option would be able to obtain $1,130.36 per month. Assuming setup fees were financed ($212,000 – $10,826), the available amount for borrowing would be $201,174.
By comparison, researchers note that a SPIA purchased with $201,174 would pay $955.21 per month, based on market rates as of August 2015 for SPIAs sold directly.”
Most people are completely unprepared to retire because they haven’t planned very well for it or frankly the rescission dug a big hole in their investments. And it’s amazing to know that 10,000 people a day are turning 62 and in most cases, totally unprepared for retirement and this giant group of Boomers is referred to as the “Silver Tsunami”.
As they age and move into their “Golden Years”, their number one concern is running out of money. People are living longer and the reality of out-living your savings is frighteningly real.
However, more Financial Advisers are suggesting to their clients to consider using a Stand By Reverse mortgage to extend the longevity of their savings and investments and it’s a very smart move.
The Dallas Morning News featured a column recently that discussed this important strategy for making, money, last.
Here is part 3 of a summary. The other parts of this article can be found in my previous, 2 posts.
Reverse Mortgage Line of Credit: A ‘Powerful’ Retirement Tool
Posted ByJason OlivaOn October 26, 2015 @ 5:01 pm In News,Retirement,Reverse Mortgage
“In another scenario, Burns notes a couple that recently lost their jobs before they retired. The couple, aged 65 and 67, has $2,000 per month in Social Security benefits; only $70,000 in savings; and own a home worth $200,000.
“If they do nothing, their lifetime consumption will be $20,000 a year in constant purchasing power,” Burns writes. “But if they take out a reverse mortgage line of credit, their lifetime annual consumption will be $25,900 a year. That’s a 29.5 percent increase.”
In a previous column, Burns wrote about what he calls “the thinness of wealth,” specifically about how 80% of all households have more money in home equity than they do in their combined financial assets and retirement accounts.
“Think about that—80 percent,” Burns writes. “It tells us that whether it is a reverse mortgage, downsizing, right-sizing, renting or living in a trailer, our shelter decisions will make the difference between retirement squeeze and retirement comfort.”’