Many people call me and find out that they don't have enough equity in their home, either because of falling home prices or a large mortgage, to obtain a Reverse Mortgage without having to bring some cash to the table. While they qualify (older than 61 and homeowner) they will have to reduce their mortgage before being able to complete the Reverse Mortgage. I want to share with you a situation that will illustrate how a Reverse Mortgage and a retirement account can work together to a greater benefit.
People often wouldn't even consider their other retirement account and how it could even become a bigger benefit than it already is by "merging" it with a Reverse Mortgage.
Lets look at a situation where a couple has a monthly payment of $1,800 on a $180,000 mortgage. Due to the value of their home going down in value they need to bring around $50,000 in cash to close the loan.
So lets look at what happens when the client takes $50,000 of retirement cash flow and puts it into a Reverse Mortgage. They no longer have a monthly mortgage payment resulting it their cash flow increasing immediately by $1,800. To make up the $50,000 of cash flow they spent it will take 2.3 years of an extra monthly cash flow of $1,800 (not taking into account the interest minus the taxes of the retirement account)to make up the $50,000 and at that point no more monthy mortgage payments as long as they live in the home.
Leaving it the way it is, you have the $50,000 but you will be paying the mortgage for at least the next 10 years which equals about $216,000.
These are just rough numbers and there are other factors to take into consideration, so give me a call and we can run the numbers and decide which route makes the most sense as you chart your financial future.
Troy Freesemann
(866) 800-0280
www.reversemortgageloans-rates.com
www.mireverse.com
Thursday, May 20, 2010
Thursday, May 13, 2010
The Financial Health of Aging Seniors
With our current economic challenges, those of us looking forward to retirement need to be well-informed about our financial needs in coming years. And not only pre-retirees, but individuals already in retirement need to be wise to the changing economic environment. The good news is there are trained professionals who keep abreast of changes in the current economy, changes in laws and changes in government programs for the elderly. Professionals in this field are equipped to handle everything from help with retirement savings accounts, investment advice, guidance on government programs, estate planning or even new funding options such as reverse mortgages. A little planning prior to retirement will allow you to maintain your current lifestyle; whereas, a lack of planning may require you to live on an extremely tight budget. For those already retired, taking time right now to deal with financial problems instead of waiting for a crisis to happen is well advised.
A large number of retired individuals feel that they have planned well for the future only to find that rising medical costs, damage done to investment portfolios (by the current economy) and many other factors have caused them to go into debt. According to an article in "USA Today" seniors are racking up debt like never before. Elderly individuals who are in debt live with a constant burden over their heads. Most of these people are on fixed incomes and have no way of paying off credit cards and home equity loans that continue to mount to cover household budget deficits. In order to meet ongoing payments, seniors often forego purchasing medications and skimp on food budgets. They live like hermits -- never going out and pinching every penny -- in order to pay their obligations.
Most of these people worked hard their entire lives and managed their debt. They never anticipated the rising costs of prescriptions, expensive medical care or depletion of savings by living too long. The good news is there is help for these individuals. Here are just a few examples of some relief options that could be available. There are many more besides these.
Reverse mortgages - A Home Equity Conversion Mortgages (HECMs), also known as a reverse mortgage, is a risk-free way of tapping into home equity without creating monthly payments and without requiring the money to be paid back during a person's lifetime. Instead of making payments the cash flow is reversed and the senior receives payments from the bank. Thus the title "reverse mortgage". For those seniors who are less fortunate financially but own a home, a reverse mortgage can allow them to remain in the home by creating extra income.
Life settlements -- A life settlement enables older individuals, businesses and other organizations to sell life insurance policies they currently own – but no longer want or need – for an amount greater than the cash surrender value. In some cases the value can be 2-3 times the cash surrender value. Even some term life insurance policies with a conversion option to permanent coverage can qualify for a life settlement.
Government Programs -- Some government programs such as food stamps provide temporary financial help for food. Other programs provide subsidized housing, help with medical expenses and provide tax credits. For veterans there is free health care, inexpensive prescriptions and disability income. Area agencies on aging offer individual counseling, legal help and advice with Medicare costs. (National Care Planning Council)
For some, living on a fixed income and dealing with debt can be an overwhelming burden. There are knowledgeable professionals and debt relief strategies that can assist in easing this burden. The National Care Planning Council keeps a list of financial advisers and attorneys who specialize in this area of planning at www.longtermcarelink.net.
http://www.reversemortgageloans-rates.com
http://www.mireverse.com
Wisconsin Reverse Mortgage
www.mireverse.com
A large number of retired individuals feel that they have planned well for the future only to find that rising medical costs, damage done to investment portfolios (by the current economy) and many other factors have caused them to go into debt. According to an article in "USA Today" seniors are racking up debt like never before. Elderly individuals who are in debt live with a constant burden over their heads. Most of these people are on fixed incomes and have no way of paying off credit cards and home equity loans that continue to mount to cover household budget deficits. In order to meet ongoing payments, seniors often forego purchasing medications and skimp on food budgets. They live like hermits -- never going out and pinching every penny -- in order to pay their obligations.
Most of these people worked hard their entire lives and managed their debt. They never anticipated the rising costs of prescriptions, expensive medical care or depletion of savings by living too long. The good news is there is help for these individuals. Here are just a few examples of some relief options that could be available. There are many more besides these.
Reverse mortgages - A Home Equity Conversion Mortgages (HECMs), also known as a reverse mortgage, is a risk-free way of tapping into home equity without creating monthly payments and without requiring the money to be paid back during a person's lifetime. Instead of making payments the cash flow is reversed and the senior receives payments from the bank. Thus the title "reverse mortgage". For those seniors who are less fortunate financially but own a home, a reverse mortgage can allow them to remain in the home by creating extra income.
Life settlements -- A life settlement enables older individuals, businesses and other organizations to sell life insurance policies they currently own – but no longer want or need – for an amount greater than the cash surrender value. In some cases the value can be 2-3 times the cash surrender value. Even some term life insurance policies with a conversion option to permanent coverage can qualify for a life settlement.
Government Programs -- Some government programs such as food stamps provide temporary financial help for food. Other programs provide subsidized housing, help with medical expenses and provide tax credits. For veterans there is free health care, inexpensive prescriptions and disability income. Area agencies on aging offer individual counseling, legal help and advice with Medicare costs. (National Care Planning Council)
For some, living on a fixed income and dealing with debt can be an overwhelming burden. There are knowledgeable professionals and debt relief strategies that can assist in easing this burden. The National Care Planning Council keeps a list of financial advisers and attorneys who specialize in this area of planning at www.longtermcarelink.net.
http://www.reversemortgageloans-rates.com
http://www.mireverse.com
Wisconsin Reverse Mortgage
www.mireverse.com
Monday, May 10, 2010
Wisconsin Reverse Mortgages and program changes
It seems that every month the Reverse Mortgage industry introduces a change. If its not a new Government reuirement, its a change in the programs available.
The good news is that recently we can now offer a Reverse Mortgage with no origination fee and no monthly service fee. This equates to saving seniors thousands of dollars when they obtain their Reverse Mortgage.
The first thought is that the interest rate would have increased to cover the difference, but the exact opposite is true. The interest rate actually went from 5.56% to 5.49%. While not a big change, the fact is it went down while the other costs went down as well.
It seems everything is costing more and more while our income is staying the same, but a Reverse Mortgage is one product that is coming down in cost.
I always share the negatives with and product and the main negative was alwaays the cost. Well that has changed and now the main negative is if you want to leave the house to the kids, the reverse mortgage isn't for you. A reverse mortgage lets you enjoy the fruits of your labor without decreasing you cash flow.
Due to all of the changes, it is important to work with a broker that only does reverse mortgages. Also, work with a broker that will guarantee getting you the most money. Get that promise in writing and hold them to it.
www.mireverse.com
www.reversemortgageloans-rates.com
Wisconsin Reverse Mortgage Wisconsin
The good news is that recently we can now offer a Reverse Mortgage with no origination fee and no monthly service fee. This equates to saving seniors thousands of dollars when they obtain their Reverse Mortgage.
The first thought is that the interest rate would have increased to cover the difference, but the exact opposite is true. The interest rate actually went from 5.56% to 5.49%. While not a big change, the fact is it went down while the other costs went down as well.
It seems everything is costing more and more while our income is staying the same, but a Reverse Mortgage is one product that is coming down in cost.
I always share the negatives with and product and the main negative was alwaays the cost. Well that has changed and now the main negative is if you want to leave the house to the kids, the reverse mortgage isn't for you. A reverse mortgage lets you enjoy the fruits of your labor without decreasing you cash flow.
Due to all of the changes, it is important to work with a broker that only does reverse mortgages. Also, work with a broker that will guarantee getting you the most money. Get that promise in writing and hold them to it.
www.mireverse.com
www.reversemortgageloans-rates.com
Wisconsin Reverse Mortgage Wisconsin
Tuesday, May 4, 2010
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