Reverse Mortgage Examples

I’ve done some extensive research online and made a couple calls with recent clients and seniors who have completed a recent reverse mortgage. I found these examples online; it is good to share examples so others can see the benefits of a reverse mortgage and how it might work in their specific situations.

Age - 72

Home value - $250,000.00

Equity - $210,000.00 with a mortgage balance of approx. $40,000.00

Problem - Sue lives alone and wants to stay in her home but is having difficulty meeting expenses. Her mortgage payment is $611.00 per month. With her Social Security income and pension she is still short $187.00 per month.

Solution - A tax free* reverse mortgage for $129,138.00 Taking a lump sum of $40,000.00 to pay off her existing mortgage and the balance in monthly payments of $561.00 After paying off the mortgage, Sue's monthly income rises to $1172.00 ($611.00 mortgage. payment plus $561.00 from the reverse mortgage).

Age - Bill is 82 and Mary is 80

Home value - $850,000.00

Equity - $850,000.00

Problem - Their income is sufficient to live as planned but they would like to assist with the college tuition for their two grand children.

Solution - A reverse mortgage credit line of up to $265,411.00 Then each grandparent can gift, each year, to each grandchild, the amount currently allowed by law*. Income from a reverse mortgage is currently tax free*. Call Toll-Free 1-877-476-9600 to speak with one of our Loan Specialist to find out more about reverse mortgages or to request more information. There is no obligation or cost for their services

Mortgage defaults up 180 percent: Homes in county lost to foreclosure rocket 987 percent in same per...

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Jul 26, 2007 - Knight Ridder Tribune Business News
Author(s): Mitch Deacon
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Jul. 26--VICTORVILLE -- Mortgage default notices in San Bernardino County surged 180 percent in the second quarter compared to the same time last year, while the number of homes lost to foreclosure rocketed 987 percent over the same peri d, a real estate information service reported.

From April to June, lenders sent homeowners statewide the highest number of notices of default in over a decade, according to DataQuick Information Services in La Jolla. San Bernardino County registered 5,141 notices of mortgage default in the second quarter, up from 1,839 a year earlier. Homes lost to foreclosure in the county totaled 1,489 in the second quarter, compared to 137 over the same period last year. The trend toward rising foreclosures will continue to accelerate in the Victor Valley, said Carolyn McNamara, a broker with the McNamara Group in Phelan specializing in foreclosures and repossessions.

"We have not seen the peak of foreclosure activity in the Victor Valley," McNamara said. "My office alone has received 18 foreclosures in the last two weeks, and I am just one of many agents that specializes in repossessions and foreclosures in the High Desert," she said. Analysts attributed the rise in foreclosures to stagnating home prices and sales resulting from a readjustment in the residential market following the homebuying frenzy of 2004 and 2005. "A lot of the loans that went bad last quarter were made at or just beyond the peak of the housing cycle between summer 2005 and summer 2006," said Marshall Prentice, president of DataQuick, in a written statement.

"Appreciation rates for most of that period were in the double digits and lenders let many households stretch their finances to the max and beyond. It's that pool of 'beyond' mortgages that the market is working its way through," Prentice said. For California homeowners behind on their mortgage payments, the median delinquency is five months before lenders initiate the default process. Statewide, the percentage of homeowners in default that are able to recover from the foreclosure process fell from 88 percent last year to 54.6 percent in the second quarter 2007. The are 8.4 million houses and condominiums in California, according to DataQuick.


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A SPECIAL ANNOUNCEMENT FROM THE RANCHO CUCAMONGA REDEVELOPMENT AGENCY

Reverse Mortgage Myths

The lender will own my home if I take out a Reverse Mortgage.
Not true. The homeowner retains title to their home throughout the life of the Reverse Mortgage.

My heirs will be responsible for repayment of the Reverse Mortgage.
Not True. The Reverse Mortgage is a non-recourse loan. The lender can only look for repayment from the sale of the property, although the repayment may be made from any other source and your heirs may keep the home. The lender cannot look to the estate for repayment of the loan.

Your home must be debt free to qualify for a Reverse Mortgage.
Not True. You may have a mortgage or other debt on your home. The mortgage or debt however, must be paid off first with the proceeds of the reverse mortgage.

Only those with excellent credit, income and/or health can qualify.
Not True. There are no credit, income or health requirements for a Reverse Mortgage. The only requirements are that you be at least 62 years of age, that the home be your primary residence and that you have equity in the home.

I will need to make monthly payments on the Reverse Mortgage.
Not True. The homeowner is only responsible for paying the taxes, insurance and upkeep of the home. As long as the home is your primary residence you will never have to make a payment.

Only the “cash poor” or desolate seniors can benefit from the Reverse Mortgage.
Not True. Even though some seniors may have a greater need than others for the cash or monthly income, the Reverse Mortgage can also be an excellent financial or estate planning tool.

Call Toll-Free 1-877-476-9600 to speak with one of our Loan Specialist to find out more about reverse mortgages or to request more information. There is no obligation or cost for their services.

Market Condition Report - July 2007

MARKET CONDITION REPORT

INLAND EMPIRE WEST
July 8, 2007
PROVIDED BY CHICAGO TITLE

The market stalls as demand declines and supply is relatively constant.

Price weakness looks inevitable as pending price is less than current closing price.

See all the details in the attached Market Condition Report (MCR) for the Inland Empire West area.

Selling 3 Times Is Not The Charm

Oh my gosh, it fell out of escrow a second time! Back on the market for the third time? As if once wasn’t enough?

That's the reality you’re hearing from a lot of sellers as this market cools off and the buyer’s lenders scrutinize the property values on the homes they are trying to buy with a giant magnifying glass.

Why three times, you ask? Take a look at this very real scenario . . .

A seller lists his home for sale higher than his agent recommends. The first time around the buyer and seller agreed upon a price. Of course it was more than the buyer wanted to pay and less than the seller wanted to accept, but a deal no less.

Read more>>

Don't Miss Out On What Rancho Cucamonga Has To Offer!

Living in Rancho Cucamonga is blast - but do you really know how much there is to do here? It's a good bet you'll find something new for you and your family to enjoy in the Rancho Funbook. Check out more here!

Looking for Fun? Visit the Victoria Gardens Cultural Center!

There are so many things to do at the Victoria Gardens Cultural Center, you won't know where to start! Visit the Paul A. Biane Library at Victoria Gardens, the Lewis Family Playhouse, and Celebration Hall. Find out more by clicking here.

Protect Yourself. Protect Your Identity.

WHAT HAPPENS AFTER YOUR MORTGAGE ORIGINATOR PULLS YOUR CREDIT REPORT?

1. Your mortgage originator pulls your credit report from the credit bureaus to obtain your credit score and process your loan application.

2. The credit bureaus may place your personal information on a prescreened list (also called a trigger list).

3. Within hours the credit bureaus may sell the list to hundreds of companies. Your mortgage originator does not authorize the sale of your personal information and cannot stop it. Only you have the ability to stop this practice.

4. Within hours you begin to receive phone solicitations for mortgage products from numbers and companies you don’t recognize.

5. Within days you begin to receive mail solicitations for mortgage products.

WHAT TO LOOK OUT FOR

1. The “bait-and-switch” scheme. This scheme is run by companies who get business by luring consumers in with low rates and then switching the loan product.

2. Solicitations (phone and mail) that appear to be from your current mortgage company. Always confirm who you are speaking with.

3. Solicitations asking for pin numbers, passwords, your mother’s maiden name and/or your social security number.

4. If you believe you have been the target of one of these deceitful practices or some other abuse of the system, please report the incident to the Federal Trade Commission at 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.

WHAT YOU CAN DO

1. Opt-Out of prescreened offers.

2. Register with the Do-Not-Call Registry, www.donotcall.gov.

3. Contact the Federal Trade Commission.

4. Contact Congress.

5. Stop other forms of direct marketing by visiting the Direct Mail Association's Web site at: www.dmaconsumers.org/consumerassistance.html.

Worried? Want To Do More To Protect Your Information?

Voice your concerns by calling your Congressional Representative at 202-224-3121.

FAQs

WHAT IS A PRESCREENED OFFER OF CREDIT OR INSURANCE?

A firm offer of credit or insurance is defined as any offer of credit or insurance to a consumer that will be honored if the consumer is determined, based on the consumer's credit report, to meet the specific criteria used to select the consumer for the offer, subject to certain confirmation requirements.

WHAT IS OPT-OUT?

Opting-Out refers to the process of removing your name from lists supplied by the Consumer Credit Reporting Companies, Equifax, Experian, Innovis and TransUnion (“Credit Bureaus”), to be used for firm (pre-approved /prescreened) offers of credit or insurance. Your rights as a consumer under the Fair Credit Reporting Act include the right to "Opt-Out" for 5 years or permanently.

HOW TO OPT-OUT

You can opt-out by visiting www.optoutprescreen.com or through the toll-free telephone number, 888-567-8688. When you call or visit the website, you’ll be asked to provide personal information, including your home telephone number, name, Social Security number, and date of birth. The information you provide is confidential and will be used only to process your request to opt out.

DOES EXERCISING MY RIGHT TO OPT-OUT AFFECT MY ABILITY TO APPLY FOR CREDIT OR INSURANCE?

No, removing your name from these lists does not affect your ability to apply for or obtain credit or insurance.

DOES OPTING-OUT IMPROVE MY CREDIT SCORE?

No, since inquiries for firm offers for credit or insurance are not used in calculating credit scores, Opting-Out does not improve your credit score. Similarly, inquiries for firm offers for credit or insurance do not reduce your credit score.

HOW DO I CONTACT THE FTC?

Federal Trade Commission

Consumer Response Center

Room 130600 Pennsylvania Avenue, N.W.

Washington, D.C. 20580

www.ftc.gov/credit/

How Homeowners Are Making The Most Of Outdoor Spaces

Have fond memories of sleeping under the stars as a child? Apparently it's not just for kids anymore. The Washington Post reports that many homeowners are moving their bedrooms outdoors. The kitchen and living room were the first to move out; now major retailers are introducing all-weather furnishings for outfitting the al fresco bedroom--everything from weatherproof mattresses, mildew-proof pillows and mosquito-netting canopies to all-weather flat-screen TVs, chandeliers, lamps and rugs.

The Great Outdoors

What's fueling the demand in outdoor living spaces? Experts point to a number of reasons, including the fact that homeowners want to invest more in their property as the cost of land rises. One trend forecaster says it's all about "celebrating and embracing nature" while another insists it's simply because we have no more room inside our homes.

According to research by Kiplinger's, homeowners are expected to spend more than $40 billion this year creating outdoor living retreats, the second-most popular home remodeling project after remodeling kitchens.

Wise Improvements

There are dozens of ways to improve your outdoor living space, but some projects and amenities are more likely to add value to your property than others. Experts say patios paved in high-quality brick or stone, perhaps with a covering to provide shade and protection from rain are a good bet. Outdoor kitchens complete with refrigerator, grill and sink can also add value, but beware the pricey weatherproof television, which many considered a luxury item. What about the outdoor fireplace or firepit? While portable firepits are a relatively inexpensive way to create a cozy outdoor setting, built-in fireplaces can cost a pretty penny, some say up to $35,000.

Swimming pools, as many landscape designers can tell you, can add or detract from the value of your property depending on the type of pool you have. Custom-made pools get the thumbs up from experts while prefabricated pools get a thumbs-down.

If you're thinking of moving more of your living space outdoors, we can help you determine what remodeling projects and amenities will add value to your home now and bring you top dollar if you decide to sell. Contact us!

Reverse Mortgages

Reverse Mortgage: Does it really make sense?

Traditionally reverse mortgages have been a convenient way for seniors in need of cash to access some of the equity in their home to supplement their lifestyles. I’m coming around to the idea of the concept of reverse mortgages because it’s becoming apparent that they enable seniors to do more than augment their income. Of course I’m probably seeing more merit in them too because I am quickly becoming a senior.

Maintaining one’s independence is a very important priority and a reverse mortgage can make it possible for seniors to extend that independence significantly. Part of maintaining one’s independence has to do with being able to remain in one’s home. The expenses associated with living in a house can often prove overwhelming for seniors who may not have the physical wherewithal to perform maintenance tasks around the house.

This could be one very good way of putting a reverse mortgage to work. For those who are unfamiliar with the concept of a reverse mortgage, it is a financial product that’s exclusively geared toward mortgage free seniors. A reverse mortgage enables seniors to tap into the equity of their home, in some cases by as much as 60% of the total value, without ever having to make a payment. The financial institution advancing the funds will take repayment plus the agreed-upon accrued interest upon the eventual sale of the home or upon the demise of the owner, regardless of how long it takes.

So if you own a home worth $500,000 and you want to take a reverse mortgage, say for 60% of the home’s value, the financial institution advances $300,000 to the senior owning the home and the senior can use these funds in any way he or she wishes without ever having to repay a cent until the home is sold or the senior passes away.

At that time, the financial institution, which has a mortgage secured on the property, is entitled to sell the property and take its principal and interest from the proceeds of the sale, or the senior’s heirs can pay out the principal and interest and keep the home. In either case, any amount above and beyond the mortgage and interest must by law be turned over to the senior’s estate.

Personally, I like the idea of a reverse mortgage. Many seniors don’t because they’re thinking about their children’s inheritance. But then, when you consider that in the United States inheritance taxes are confiscatory, to put it mildly, and probating a will is very expensive; it only makes sense to enjoy the fruits of your labor while you’re still alive. Besides, your grown children should be able to look after themselves without counting on a windfall from your death.

So, does a reverse mortgage make good financial sense? Overall I’d say it does and I think many seniors would benefit greatly by tapping into the equity of their home to help maintain their independence.

Call Toll-Free 1-877-476-9600 to speak with one of our Loan Specialist to find out more about reverse mortgages or to request more information. There is no obligation or cost for their services.

Four Questions a FSBO Should Ask A Buyer

Decided to try selling For Sale By Owner (FSBO)? It looks like you and I will be in the same business during that process . . . The business of selling homes.

Let me share these four important questions that you should ask any buyer before you let them in to see your For Sale by Owner house.

1. Are you Pre-Qualified?

2. How much are you Pre-Qualified for?

3. Who Pre-Qualified you?

4. May I contact the person that pre-qualified you?

If they are not willing to answer these questions, then they are not serious buyers and there is no need to waste your time showing them your home that they most likely can’t even afford. There may be reasons why they are contacting a For Sale by Owner. A real estate professional might have pre-qualified them and found out any number of reasons why not to work with that buyer. (Poor credit, not motivated, unrealistic…)

I’m sure you already have a busy life and going For Sale By Owner is a pretty awesome, time consuming responsibility. There’s no need to make it more difficult than it has to be.

Let me know if I can help.