Are you still using a key to unlock your door and twisting a dial on the wall to set the temperature? Home automation technology has made considerable strides in the past couple of years, so it might be time to invest. In today's blog post we will explore three tips that can help those looking to make the leap into a fully automated home.
Understanding the Reverse Mortgage and How to Best Use This Unique Financial Tool
How does a reverse mortgage work, and when is it appropriate for a homeowner to get one? Here is what you need to know.
What is a Reverse Mortgage?
In short, a reverse mortgage is a type of home loan secured by a primary residence, where repayment is deferred to a later date – generally when the home sells. This loan allows you to convert some of the equity in your home without having to sell your home.
The Benefits ~ Why this option?
- Remain independent aging in place and afford home health care.
- Increase monthly cash flow, pay off an existing mortgage, credit card or other debt.
- Cover expenses vs selling off other assets.
- Have a standby line of credit (LOC) for life’s surprises for example health care, home remodeling, adult children’s needs.
- Delay social security to age 70
- Bridge the gap in retirement planning caused by the recession, depressed assets, premature job loss, low-interest returns on the portfolio, etc.
- Extend the life of other assets under management.
- Deferred home maintenance.
- Buy a new car or travel.
- Create a larger estate for their heir with proper estate planning.
- Older adults do not want to be a financial burden on their children.
How to Make a Reverse Mortgage Work for You?
To learn more about reverse mortgages, contact your local certified Reverse Mortgage Professional (CRMP) for guidance and expertise.
Tips to Help Adult Children Talk to Aging Parents About Retirement
Aging baby boomers and their adult children often find it difficult to engage in meaningful family conversations about parental retirement plans. Sensitive topics like housing, finances, health status, and the ability to continue driving are a few topics that can trigger strong emotional responses.
Kiplinger.com recently published an article on this topic titled, “10 Ways to Talk to Your Aging Parents About Their Finances.” Author Cameron Huddleston wrote a book on the subject, and she has several productive guidelines to help adult children broach the subject of financial planning with their parents.
Dream Renovations: Upgrading Your Bathroom from ‘Regular’ to ‘In-Home Spa’
There are times you might long for the relaxed leisure of the spa experience, but with the cost of a manicure it's not always a pleasure one can afford. If your current bathroom set-up isn't the optimal place for rest and relaxation, here are some cues for how you can turn it from a bit of a problem to a consummate pleasure.
Understanding the Principal Limit on a Reverse Mortgage
Principal limit is a unique term with the reverse mortgage and simply translates into how much you can borrow. Assuming the same data is used this number should be consistent from lender to lender. The data includes three critical numbers: age of the youngest borrower, rate, and home value. Here is a brief explanation of how the principal limit is calculated.
The age considers the youngest borrower or eligible non-borrowing spouse. Older borrowers generally qualify to borrow more or a higher principal limit. Younger borrowers generally qualify for less. As a side note, the age factor is based on actuarial age: living to 100 yrs. old.
Rates with the HECM loan are tied to long-term interest rates. This is the expected rate ( ER) FHA insures HECM loans, so they consider future rates when calculating a borrower’s principal limit. Expected rates estimate what rates are expected to be in the future, this determines how much money the borrower can receive. The expected rate will determine the principal limit, calculating a borrower’s monthly payments and setting a LESA if needed ( lifetime set aside account.) Expected rates change each Tuesday, tracking the 10 yr. CMT index published by the Federal Reserve.
Your home value is the third factor needed for calculation purposes. All lenders use the lesser of the home value or the HECM limit ( maximum claim) currently at $822,375.
To learn more about reverse mortgages, contact your local certified Reverse Mortgage Professional (CRMP) for guidance and expertise.
How To Have the Best Garage Sale Ever At Your Home
It's getting close to that time of year again â time to have a garage sale at your home!
Here are a few tips to help you have your most successful garage sale ever.
Three Tips to Ensure That a Reverse Mortgage Makes Sense for Your Financial Situation
When you apply for a reverse mortgage, also known as a HECM home equity conversion mortgage, you are essentially borrowing money from some of the equity you have built up in your house.
One great advantage of a reverse mortgage is that you are not required to make monthly payments until you no longer occupy the home. If you have a reverse mortgage you must be able to pay property taxes, homeowners’ insurance, other applicable property charges and occupy your home.
So how can you tell if a reverse mortgage is a good solution for you?
Here are three factors to consider.
Will you outlive your money?
You may be on a fixed income. This might include social security, pension, and or retirement funds that distribute monthly payments. You might have part-time employment, or significant retirement funds which can carry you well into the future. You might tap into a reverse mortgage to either eliminate a current mortgage payment, provide additional cash flow, or both. Your budget, your health, and your long-term financial plan all hold the key to understanding if you will outlive your money. Proper planning can provide for a long economically stable future. A reverse mortgage might be able to help hedge those odds.
Have you looked at retiring with all the possible financial options?
Is there a nest egg? If yes it is common to consider a reverse mortgage for cash flow while funds under management continue to grow. It is common to use a reverse mortgage as a strategic plan in advance of taking SSA income at 70. Often homeowners use the reverse mortgage to create a line of credit for future use only or for emergencies. This is not the loan of last resort! This is a viable option to use home equity in ways that support your goals and needs.
It is also an excellent tool to use to eliminate a mortgage payment and free up that cash flow for other purposes.
Are You Planning to Stay in your home for the foreseeable future?
If a home sale is in your immediate future, consider a HECM for Purchase but if not then a reverse mortgage refinance can also solve many problems. This loan is best utilized on a long-term basis. Borrowers who want to stay in their home long-term benefit from a potentially growing line of credit or cash flow otherwise being paid out on traditional monthly mortgage payments, and the real comfort of living in the home of their choice.
To learn more about reverse mortgages, contact your local certified Reverse Mortgage Professional (CRMP) for guidance and expertise.
Let There Be Light! 3 Easy Ways to Make over a Room by Adding New Light Fixtures
Light is an important design element that can be used to influence your interior decor in a number of ways. In fact, you can experience a major transformative change on the overall style and ambiance of a room by making a few simple lighting changes.
Can You Use a Reverse Mortgage to PURCHASE Your Next Home? Yes, and Here’s How
The HECM for Purchase program was established in 2008. Before it was created a homeowner had to relocate and purchase a home with a traditional mortgage, establish residency, and then refinance the home with a HECM if desired. This lengthy process would require two sets of closing costs and an extensive waiting period. Since 2008 homeowners do not have to experience the time-consuming process instead, they can purchase a residence using a HECM with only one closing event and no waiting period.
When would it be a good option?
Often older adults want to downsize, move closer to children, move nearer to a city or better health care services, or leave the city and move to the country. Sometimes the home they are in does not have the required improvements necessary for aging in place, or it is a 2-story and single-level floor plan is preferred. Often the desire to live in a retirement community is a good choice. There are endless reasons why older adults choose to move to a new home.
How does it work? To qualify the homeowner must be 62 yrs. or older and a lender review can determine how much they can borrow ( called the principal limit). Then a significant investment may be required to satisfy the remainder of the sales price and closing costs. A homeowner might be selling their home to move to the next. Some of the sale proceeds are used for the down payment of a new home and the HECM is used as the purchase money. For example, a $600,000 house is purchased with a $250,000 down payment and the balance is your reverse mortgage loan with no monthly payments.
Before And After Tips When Dealing With A Disaster
Weather patterns across the United States seem to be getting more and more erratic. From tornadoes and earthquakes to flash floods and wild fires, there are many natural disasters that can quickly consume your home without warning. Because you never know when disaster might strike, itâs best to be prepared.
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