Advantages and Disadvantages Of A Reverse Mortgage

Betty and John, are in their mid-seventies and are currently weighing the advantages and disadvantages of a reverse mortgage as a way of freeing up some cash.

The couple purchased their home 45 years ago for about $14,000 since then home values have skyrocketed and recent single family homes in their neighborhood have been selling for a minimum of $160,000. Like Betty and John, if you’re considering a reverse mortgage it’s important to do some research prior to making a decision. You not only need to understand the basic principles of this kind of mortgage but you also need to look at all the advantages and disadvantages of a reverse mortgage. Essentially a reverse mortgage is a loan that permits homeowners 62 years of age and older to borrow against the equity in their homes without having to sell it. Further, you don’t have to give up the title or take on a new monthly mortgage payment. A reverse mortgage loan is tax-free and needs only to be repaid when the borrower (or in the case of Betty and John, when the surviving spouse) dies or sells the home. At which time, the reverse mortgage loan must be repaid in full, including all interest and other charges. When examining the advantages and disadvantages of a reverse mortgage it’s also important to consider both the process and the related costs of obtaining a reverse mortgage. Unlike a conventional mortgage, with a reverse mortgage, the homeowner (the potential borrower) must meet with a reverse mortgage counselor. References for counselors can be obtained from banks offering reverse mortgages or the U.S. Department of Housing and Urban Development (HUD). The purpose of these meetings which may take place in person or on the telephone is for the homeowner to learn about reverse mortgages and discuss alternative options. It also helps you decide which kind of reverse mortgage may be best. As well as exploring the advantages and disadvantages of a reverse mortgage, it’s wise that the potential borrower, also compare costs between various lenders and request a Total Annual Loan Cost estimate for each. Further to discussing the advantages and disadvantages of a reverse mortgage with a counselor, you also need to understand that there are certain costs involved in the reverse mortgage process. Costs may include application fees, closing costs, insurance, appraisal fees, credit report fees, and quite possibly a monthly service fee. Remember too that since a reverse mortgage allows you to continue living in your home, you’re still responsible for property taxes, insurance and repairs. If these payments are not maintained, the loan could become due in full. A reverse mortgage may also affect eligibility for federal or state assistance as well as Medicaid. That said, any reverse mortgage money that is received is tax-free and does not affect Social Security or Medicare benefits. The condition of your home is also a large part of the approval process. It must be structurally sound and in good repair. If it’s determined that home repairs need to be done, the costs can also be financed through the reverse mortgage loan. The total amount a homeowner can borrow all depends on the kind of reverse mortgage selected, how much equity is in the home, the loan's interest rate and most importantly, the age of the borrower. Typically the older a person is, the more they can expect to receive. A borrower can receive reverse mortgage payments in one of the following ways: in a lump-sum payment; fixed monthly payments; a line of credit or a combination of any of the above. Most homeowners go for the line of credit option which allows them to draw on the loan whenever money is required.

Debt Negotiation On Credit Cards

Debt negotiation on credit cards is also often referred to as credit card debt settlement. People to turn to credit card debt negotiation when they find they can’t handle a debt consolidation program.

If you find you’re unable to make the minimum payments of a credit card debt consolidation repayment plan or haven’t been able to make payments in the past three months, a credit card debt negotiation program is the next step in solving your debt and credit problems. One of the advantages of a credit card debt negotiation program is that you cease making payments to your creditors. The debt negotiation company usually takes the monthly payments directly from you and holds the balance in trust. During which time you’re conducting your debt negotiation on credit cards and are making regular payments through a credit card debt negotiation program, the debt negotiation company will negotiate with your creditors for a lower payoff of around 40 to 50 % of your total amount of debt. As soon as a settlement is reached your debt negotiation company will then make a one time payment to your creditors. A disadvantage of a credit card debt negotiation program is that it lowers your credit score for as long a you’re in the program. However, most debt negotiation companies require the creditor to make sure that the final credit report reflects the account is now paid in full. Therefore, once your debt negotiation on credit cards account is settled you will no longer have a negative report. A number of debt negotiation companies include a credit repair service as part of their credit card debt negotiation program. This debt negotiation on credit cards repair service removes any negative items caused by the credit card debt negotiation program. Although it is part of the program there are fees associated with this service. A credit card debt negotiation program is not your only answer. You may wish to self arbitrate. If you’re determined to pay of your debt(s) and turn over a new ‘financial’ leaf you may wish to contact your creditors yourself. By doing so, you may be able to negotiate a lower interest rate or a more realistic repayment plan. If you decide to self arbitrate, you’ll also want to have a written agreement with your lender or collector that makes note of the fact your settlement has been ‘paid as agreed’ or ‘satisfied in full’. Regardless of your approach – self arbitration or going with a credit card debt negotiation program you can be successful. Positive debt negotiation on credit cards will be realized once you’re committed to paying your debt(s) off once and for all. And, just think how good it will feel to get out from under all that ‘debt’ weight.

Questions To Ask About Refinancing

It’s important to think of all the questions to ask about refinancing before actually signing anything as refinancing is not for everyone. refinancing

People refinance for many reasons – to lower monthly payments, to pay off a loan, build equity faster, convert a variable rate into a fixed rate mortgage etc. When considering refinancing you not only need to know what questions to ask about refinancing but you also need to answer some questions yourself before you seek out the advice of a lender. The questions you need to ask yourself include how long do you plan on residing in your home and how long have you held your current mortgage? In order to make the costs of refinancing worth it, you need to be in your home long enough to reap the benefits. Experts recommend that anything more than five years is good. If you intend to move before that time you will have little to gain from refinancing. And if you plan on moving in three years or less, it makes virtually no sense at all to refinance. That said, if you’re nearing the end of a fixed rate loan (in other words, you’ve already taken advantage of most of your tax deductible interest), a new loan could prove beneficial. The advantage here is you can deduct the interest and prorated points year by year. Now as to the questions to ask about refinancing, you need to know what refinancing will cost you in the way of points, transaction fees and other closing costs. Your refinancing lender will be able to provide you with an amortization chart showing the real expense of pre-paying interest points. You may want to also ask for a modified Annual Percentage Rate (APR) spreadsheet that combines costs over the years you plan to reside in your home. That said, if you’re considering a no-points refinancing, be careful to weigh the costs of any additional interest and other fees that may be hidden in higher mortgage rates. Among your questions to ask about refinancing, you need to know if interest rates are higher for a cash-out refinance. The rate of interest you need to pay on a cash-out refinance loan is usually the same you would pay on a non-cash out loan. However, there may be an incremental fee associated with cash-out refinancing depending on the loan program you select and the loan to value ratio. Refinancing can be a smart move. Using the equity in your home to pay off other bills can really make a difference to your bottom line. You may wish to pay off any and all debts that have interest that is not tax deductible. Chances are good you may be able to deduct the interest on refinancing money. To be sure check with your tax advisor. Next, you should be asking if you can “lock in” an interest rate. Nobody can predict what interest rates will do but historically rates tend to go up faster than they come down. So if you’re thinking about refinancing your mortgage this is among one of the most important questions to ask about refinancing. It’s important for you to get the best rate you can now. Remember you always have the option of refinancing later if the rates do drop again. However, you will also want to bear in mind that any future interest rates need to be substantial enough to impact your monthly loan payment. Before sitting down with a lender take the time to make a list of the questions to ask about refinancing. Having all your questions answered will help you make an informed decision about whether refinancing is right for you.

Negotiate and Mortgage Rate Compare Says The Better Business Bureau

You should always mortgage rate compare to find the best mortgage to meet your needs before refinancing. Mortgage rate compare by contacting at least three different mortgage lenders. Despite your reason for refinancing – lower monthly payments or to build equity faster, three lenders are better than one.  Better Business Bureau

Record numbers of homeowners are jumping on the refinancing bandwagon in an effort to lower their mortgage interest rates. According to the Better Business Bureau (BBB) refinancing is not for everyone and or those that decide that it is, it’s best to mortgage rate compare before signing on the dotted line. Industry experts claim that homeowners are refinancing in record numbers. While this is all well and good for some it may not be for others. It’s true with a good refinancing package you can potentially shave hundreds of dollars off your existing mortgage but it isn’t for everyone. The Better Business Bureau recommends homeowners mortgage rate compare and take the time to negotiate the best deal possible. The association however also suggests that homeowners should proceed with caution when it comes to dealing with some lenders. In an effort to help homeowners determine if refinancing is in their best interest, the BBB suggests you take the following into consideration when doing a mortgage rate compare. The long and short of it is that you are simply applying for a new mortgage at a lower rate which you then in turn use to pay off your old loan. The advantage for lenders is that they can profit once again by requiring you to pay for most of your original costs once again. Such costs may include loan application fees, a credit check, title search, lawyers fees and an appraisal. In many cases discount points and other more uncommon finance charges may also apply. That said when you mortgage rate compare you will also find institutions that offer refinancing plans where most if not all of the above mentioned costs are folded into the loan thereby reducing your actual out of pocket fees to a minimum. A tax deduction on the interest may also be a possibility. Consult with you tax advisor to see if one would apply. When considering refinancing it’s important to make sure that interest rates have dropped significantly to make your efforts to mortgage rate compare and refinance worth the effort. A good rule of thumb is to consider a two or three percent difference between your current mortgage rate and that of a new rate. In order to get the most value for your refinancing efforts you need to look at the new rate over a period of several years in order to offset the costs you’re required to pay upon closing. There are many factors that come into play when you consider the ultimate amount you may be able to save by refinancing. Such factors include whether you will be selling your home in the near future and what if any effects there will be on your taxes. All the more reason to mortgage rate compare and gather information from various lenders. Being a knowledgeable homeowner is vital. Just knowing your interest rate and your monthly payment costs is not enough to win at the refinancing game. A wise homeowner will always mortgage rate compare and gather information about the same loan amount, loan term and type of loan so comparisons are easily made. Look out for your own best interests and don’t feel pressured to stay with the lender of your original mortgage if their terms aren’t in your best interest. Also be wary of smooth-talking lenders that use high pressured tactics via telephone or door-to-door soliciting. Such lenders are sure to offer easy credit and guaranteed low-interest loans. They prey on homeowners who are in need of cash for home repairs or simply to pay bills. But if it sounds to good to be true chances are it is. In reality these lenders are offering up little more than loans that have outrageous fees, high interest rates and fine print that makes it very expensive to get out of. A common red flag is when a lender asks for an upfront fee prior to you actually obtaining the loan. If this happens take your business elsewhere. Mortgage rate compare and arm yourself with knowledge about the mortgage loan process. To protect yourself have the lender write down all costs associated with the loan. Then take the time to read through the loan documentation carefully. Never sign something you don’t fully understand. Ask the right questions, mortgage rate compare between lenders and negotiate the best refinancing deal you can.

Shopping For The First Buyers Loan

LOANS When shopping for first time home buyer loans it’s wise to compare lenders and loans to get the best mortgage loan for your needs. Among the first questions you should ask yourself is how big of a mortgage can you afford?

The answer should come from your gut instinct and only after you have spoken with a qualified lender. Ultimately you’re the only one who can determine what you can realistically afford. You need to do your homework about firs time home buyer loans and find out the maximum mortgage you qualify for and then give some thought as to whether it falls within your personal comfort zone. A potential lender will run some numbers for you and come up with a magic number based on the financial information you supply and your personal credit history. Although it may be in the ball park of what you can afford, it may prove to be too much of a financial hardship in the years ahead. First off, if you currently rent don’t use your monthly rental fees as a comparison. First time home buyer loans are very different – it’s like comparing apples and oranges. Use your monthly rental costs as a guideline only. On one hand it would make sense to compare the two but you also have to consider other factors such as the need to pay extra for property taxes. In a rental situation such taxes were incorporated in your rent. Property taxes can vary between a few hundred to a few thousand dollars per year depending on where you reside. Furthermore, did your rent include utilities? If so, you also need to factor in the cost of gas and hydro in addition to the cost of any firs time home buyer loans. And what about having enough money you can put aside as an emergency fund for home repairs and general maintenance? Remember you no longer have a landlord you can call upon when something needs fixing. Then there’s mortgage insurance to consider whenever you’re shopping for firs time home buyer loans. This is especially important if you have a high-ratio mortgage. Another good rule of thumb when shopping for firs time home buyer loans is that if your current rent falls within your comfort level, aim for a slightly lower monthly mortgage payment. Exploring your total monthly debt load as well as your total monthly housing costs is one of the best ways to figure out what is a realistic mortgage payment. Your next task is to find a lender who specializes in firs time home buyer loans and who will offer you the best deal. Again research and comparison is needed. It will take you some time to investigate both lenders and loan packages. But it’s time well spent. The time you took to investigate the best in firs time home buyer loans could literally save you thousands of dollars over the course of your mortgage. The bottom line when searching for first time home buyer loans is to invest in doing your homework. Research all your options before you start looking for that dream home.

First Time Home Buyer Loans Made Easy

When it comes to first time home buyer loans, a little research can save you thousands of dollars over the life of your mortgage.

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A wise consumer selects a mortgage lender prior to shopping for a home. You see, first time home buyer loans can end up costing you a lot more than you bargained for if you shop for your home first. What often happens is you fall in love with a beautiful home that is on the outside range of what you can afford. And because you have invested interest in this thousands piece of real estate you’re more inclined to go into a loan situation you can ill afford. To make sure you can realistically afford your mortgage payments, it’s best to understand all the potential costs upfront before you fall in love with that dream home that is really outside your financial comfort zone. It will take some research and comparison shopping in order to find both the best lender and the best in first time home buyer loans. The loan package best suited to your needs will offer you terms you can handle now and in future. It’s important when looking for first time home buyer loans you take into account your future plans. For instance, are you planning on starting a family? If so, it’s important to consider the potential reduction in your family finances if you or you spouse decides to take some time off to raise the children). Further, if you have poor credit, you’ll be required to pay a higher rate of interest than those who have a good credit rating. When it comes to first time home buyer loans, the amount of your down payment will also be taken into account when your interest rate is calculated. Think of it this way, the larger the down payment, the better the interest rate. So, before locking yourself into one of the first time home buyer loans currently on the marketplace, you’ll want to consider the advantages of contributing a decent down payment. This will keep both your interest rate and your payments much more reasonable. Among the options for first time home buyer loans are variable rate and fixed rate mortgages. The first fluctuates over the course of your mortgage and the later keeps payments the same. Another factor to consider is your debt to income ratio. In other words, the amount of money you bring in opposed to the amount that goes out. When determining your debt to income ratio you must take things like car payments, student loans and credit card balances into account. There are programs available to assist first time home buyers in obtaining a loan. Talk to your lender and do some research of your own to discover the best option for you. Remember, when shopping for first time home buyer loans no question is stupid. It’s very important that you understand the ins and outs of any mortgage loan prior to signing on the dotted line.