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Utah Mortgage Broker - Mortgage Broker in Utah

 

 

 

IS YOUR EQUITY SAFE?

 

Hi I’m Mark Hammond, president of Legend Financial Services.   Do you think your home equity is safe?  What about your parents’ home equity?  Do your parents take pride in the fact that their home is paid off and that they will leave you a nice legacy?  What if that were not true?  What if by the time they pass away there won’t be much left at all?  If that is true you might plan differently before it’s too late.

 

The economic crash in 2008 is a wakeup call to a lot of things going on in the world right under our noses that most people are still unaware of.   A bubble burst in the real estate market that was a long time coming.  Our economy in the United States has become largely based on inflating real estate prices and little else.   In the 50s, after World War II we had a large manufacturing base and lots of jobs.  America rose to be a super power because most of the other developed nations were destroyed from the war.  We prospered because we had a strong manufacturing base and little or no competition abroad.  We also had laws and taxes on businesses that created large revenues and made America a great place to live with good education and social services.  Our workers were protected and given stable jobs with great benefits.  Since the early 80s, however, corporations have pressured the US government for more and more tax breaks, which has hurt the American way of life.  It didn’t “trickle down” like Reagan said it would.  In the 90s Clinton signed the North American Free Trade agreement, NAFTA.  This and other legislation made it more profitable for corporations to move their manufacturing jobs out of America.  

 

So gradually we’ve been losing ground as an economic power in the world.  But, what made this appear insignificant to most Americans was that real estate appreciation was fueling the economy.  

 

In the early 90s, banks and lenders figured out ways to make a lot of money by packaging mortgage loans into securities to be sold on Wall Street.  I started working in the mortgage business right when this began and I watched as Wall Street investors paid more and more and more every year for pools of these loans, while all the along relaxing the lending guidelines steadily in order to allow more and more people to buy and refinance homes to keep the money rolling in.  Our economy shifted more to services focused on housing and construction and there were many jobs available in that industry because houses kept appreciating.  This appreciation created more spending and more jobs.  And people borrowed money on credit cards only to then pay it off with a home equity loan.  And that’s what America did, they lived beyond their incomes for the most part and borrowed the rest.  It was an irresponsible financial strategy that can be blamed on both Wall Street and Main street.  

 

But eventually the weakness in the rest of the economy took its toll and people who were overburdened with debt began to default on their loans.  And when that happened the house of cards we lived in began to fall down.  

 

Huge amounts of people in America rely on the real estate industry for their livelihood, and so much of what you’re hearing out there about the market is trying to reassure you that this is just a cycle and things will come back.  “Everything will be ok and things will turn around again.”  From Wall Street to Main Street, everyone is desperately hoping this is true.  Well I’m here to tell you that it is a lie.  The real estate market will not rebound for a very long time, and Utah, where our offices are located, is always following well behind the trends, so we have a lot of depreciation still ahead.     You can expect your home equity to drop steadily for many years and I’ll give you 3 powerful reasons why:

 

1. 
   Financing has been severely restricted and will get stricter.  Lenders and investors have recently learned from the school of hard knocks that people must have more “skin in the game” (bigger down payments) or they will stop paying if times get tough.  Increased down payments and increased credit and income standards result in less people being able to buy and this causes prices of homes to drop.  In other countries, getting a mortgage is far more difficult than it is in America and much higher down payments are required and fixed rates are rare.  Since our lending system has failed in its ability to evaluate risk correctly, you’ll see lending get even more strict.  Even at the severely restricted levels of risk that lenders are taking now, Fannie Mae and Freddie Mac are still very close to folding.  

 

Ease of financing is a huge determinant of home values.  There is a subdivision in Utah of mountain property that is close to Salt Lake and would have much higher property values except the county never approved the subdivision and you can’t hold legal title to your lot, but instead you own an undivided interest in the resort.  Because of this lenders won’t lend on the property and so the land is very cheap and not very many cabins get built cause people can’t borrow money to do it.  As it gets tougher to get financing, real estate values will drop more and more.

 

You should face the reality that the US government is no different from the person that is losing their home to foreclosure.  The US is strapped with debt and is in the process losing its power grip on the world.  The ease of financing in this country is largely due to federally insured mortgage programs which insure the lenders from loss so they can offer low-down-payment loans.  As the US weakens, these guarantees will mean less to investors and our lending programs will start to resemble the rest of the world.

  

1. 
   Incomes are dropping in America, which causes demand for our high-priced real estate to drop too.  So the equity in your home and in your parent’s home is dwindling away.  Like the majority of its citizens, America is drowning in debt.  We’ve allowed corporations to push us around with our tax and trade policies and we’ve lost the foothold we once had in the global economy.  Corporations and the super wealthy are in charge and they have no allegiance to America or our workers.  They’re skirting around their tax obligations and causing our schools and public services to fall apart.  Profit is their only concern and we demand too high of a wage and too high of a lifestyle and that cuts into their profits.  So they’ve cast us aside and our way of life is in serious jeopardy.  Without rising real estate values, there’s not much to our economy.  A large number of us depend on the building industry for our jobs.  When real estate continues to drop in value, you’ll see the building industry shrink even more than it already has.  How many people do you know that still work in building or some industry that supports building?  It’s the biggest industry we have in America.   Why is real estate so much cheaper in other countries?  Cause people make less money, which is what is happening here.  All the more reason to expect your home equity to shrink.

 

1. 
   Here’s the scariest one of all!  Recent studies show that up to 15% of homes in America are VACANT!  15%!!!  A large number of them are owned by banks, taken back in foreclosures.  What’s even more scary is that 60-70% of those bank-owned properties aren’t even for sale!  What does that mean?  Why aren’t the banks trying to sell them?  Because the banks are trying to protect the value of their collateral and if they dropped all those houses onto the market, the real estate market would tank.  It’s supply and demand.  Too much supply will cause prices to fall.  So our real estate market right now is a façade, it’s fake.  The prices aren’t real.  The banks are doing a high wire act to keep it from completely falling apart.

 

So we have huge problems with both sides of the supply and demand equation.  Restricted financing and lower wages bringing down demand,  and a glut of homes still to be introduced to the market increasing supply is a very destructive combination to bring down home values.   Oh I know that population is growing, but that doesn’t matter if there are no jobs and no access to financing.  Africa has a some big populations too, and how’s their real estate market?

 

So let me ask you a question.  Is your parents’ house paid off?  Are you expecting to inherit that home at some point in the future?  I’m sure you’d like that inheritance to be as large as possible and I’m sure your parents want the same thing.  Banks and the mainstream news media don’t want you to see the writing on the wall.  The truth is, your parent’s ability to support themselves in the future and the legacy they leave you can be drastically better or worse depending on how you plan NOW.  At Legend Financial Services, we see the writing on the wall and have organized a group of key strategies to help make it possible for your parents to not outlive their money.  And instead of gradually losing your legacy, we can help you to inherit up to 2-3 times what you would have inherited by sitting still.  

 

Understanding what’s to come is just the first step.  The next step is doing something about it.  It’s up to you to talk to your parents and help them understand what’s at stake if they do nothing.  Give yourself the knowledge that can save you from financial ruin.  Don’t go down with the ship.  Get our free information that will explain how to avoid losing your nest egg in this declining real estate market.  These are tried-and-true conservative financial strategies that your parents will understand.  

 

Email me at Mark@LegendFinancialServices to get this information.  Put “Rescue my Equity” in the subject line.  If you have a group you’d like to speak to about this please let me know that in the email.

 

 

 

Mark Hammond

President

Legend Financial Services

801-277-5100 x 303

Mark@LegendFinancialServices.com

Reverse Mortgage Salt Lake City, UT (801)-277-5100

 

Reverse Mortgage Salt Lake City, UT  | (801)-277-5100 

 

A reverse mortgage is a form of equity release (or lifetime mortgage). It is a loan available to home owners or home buyers over 62 years old, enabling them to access a portion of the subject home's equity. The home owners can draw the mortgage principal in a lump sum, by receiving monthly payments over a specified term or over their (joint) lifetimes, as a revolving line of credit, or some combination thereof. The would be home buyers, would use the existing equity on the home they intend to acquire, to get a reverse loan with a down payment and no additional payments.

 

 

 

In a conventional mortgage the homeowner makes a monthly amortized payment to the lender; after each payment the equity increases by the amount of the principal included in the payment, and when the mortgage has been paid in full the property is released from the mortgage. In a reverse mortgage, the home owner is under no obligation to make payments, but is free to do so with no pre-payment penalties. The line of credit portion operates like a revolving credit line, so a payment in reduction of a line of credit increases the available credit by the same amount. Interest that accrues is added to the mortgage balance.

 

Title to the property remains in the name of the homeowners, to be disposed of as they wish, encumbered only by the amount owing under the mortgage.

 

If a property has increased in value after a reverse mortgage is taken out, it is possible to acquire a second (or third) reverse mortgage over the increased equity in the home in some areas. 

 

However most lenders do not like to take a second or third lien position behind a reverse mortgage because its balance increases with time. It is rare to find reverse mortgages with subordinate liens behind them as a result. A reverse mortgage may be refinanced if enough equity is present in the home, and in some cases may qualify for a streamline refinance if the interest rate is reduced.

A reverse mortgage line is often recorded at a higher dollar amount than the amount of money actually disbursed at the loan closing. This recorded lien is at times misunderstood by some borrowers as being the payoff amount of the mortgage. The recorded lien works in similar fashion to a home equity line of credit where the lien represents the maximum lending limit, but the payoff is calculated based on actual disbursements plus interest owing.

Reverse Mortgage Utah - Home Loans for Seniors

Reverse Mortgage Utah - Home Loans for Seniors Call  801-277-5100

 

 

Reverse Mortgages

“I’m retired and my income is low. I have a lot of equity in my home, but it does me no good unless I sell the house. But I need a place to live! I wish there was a way to stay in my home and stop making mortgage payments. I would love to get at some of that equity to pay for prescriptions, medical costs and spoiling my grandchildren. Can’t the lender just let the interest build up on my loan and collect it later after I die? Right now I need a break!"

Home Equity Conversion Mortgages (HECMs), commonly known as reverse mortgages, are Federal Housing Administration insured low-interest home loans for seniors (over 62 yrs) that require no payments EVER as long as the seniors live in the home. Existing loans can be paid off and equity can be drawn out to pay for medical expenses, living expenses, or whatever the borrower chooses. The maximum loan amount is a percentage of the home's value determined by the age of the youngest homeowner.

Since no interest is paid by the borrowers, interest accrues on the note each month, but is not collected until after the death (or permanent vacancy) of the all borrowers on the note. Lenders assume the risk that the loan balance might become greater than the value of the home. Borrowers retain ownership of the home and can sell the home or refinance the loan to a regular loan later if they choose. Reverse mortgages can also be refinanced later on with a new reverse mortgage to pull out more equity if the home value increases substantially.

Getting rid of monthly mortgage payments and using the nest egg built up over the years can really ease the stress of retirement for seniors. Knowing that their home can never be taken away is also a great relief. The loan does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. At that time, the estate has 12 months (with no required payments) to refinance the balance of the reverse mortgage or sell the home to pay off the balance. All remaining equity is passed on to the heirs.  If no equity remains in the home, the estate can simply walk away with no liability. The estate is not liable if the home sells for less than the balance of the reverse mortgage.

Purchase a Home with a Reverse Mortgage

Reverse mortgages can be used to purchase a home. For example, seniors that wish to downsize can sell their existing home, make a large down payment on a smaller home, and finance the rest with a reverse mortgage. Then, no payments will need to be made for life.

Call us today just to see how much money you can get.  

801-277-5100

Reverse Mortgages in Utah

Reverse Mortgages

“I’m retired and my income is low. I have a lot of equity in my home, but it does me no good unless I sell the house. But I need a place to live! I wish there was a way to stay in my home and stop making mortgage payments. I would love to get at some of that equity to pay for prescriptions, medical costs and spoiling my grandchildren. Can’t the lender just let the interest build up on my loan and collect it later after I die? Right now I need a break!"

Home Equity Conversion Mortgages (HECMs), commonly known as reverse mortgages, are Federal Housing Administration insured low-interest home loans for seniors (over 62 yrs) that require no payments EVER as long as the seniors live in the home. Existing loans can be paid off and equity can be drawn out to pay for medical expenses, living expenses, or whatever the borrower chooses. The maximum loan amount is a percentage of the home's value determined by the age of the youngest homeowner.

Since no interest is paid by the borrowers, interest accrues on the note each month, but is not collected until after the death (or permanent vacancy) of the all borrowers on the note. Lenders assume the risk that the loan balance might become greater than the value of the home. Borrowers retain ownership of the home and can sell the home or refinance the loan to a regular loan later if they choose. Reverse mortgages can also be refinanced later on with a new reverse mortgage to pull out more equity if the home value increases substantially.

Getting rid of monthly mortgage payments and using the nest egg built up over the years can really ease the stress of retirement for seniors. Knowing that their home can never be taken away is also a great relief. The loan does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. At that time, the estate has 12 months (with no required payments) to refinance the balance of the reverse mortgage or sell the home to pay off the balance. All remaining equity is passed on to the heirs.  If no equity remains in the home, the estate can simply walk away with no liability. The estate is not liable if the home sells for less than the balance of the reverse mortgage.

Purchase a Home with a Reverse Mortgage

Reverse mortgages can be used to purchase a home. For example, seniors that wish to downsize can sell their existing home, make a large down payment on a smaller home, and finance the rest with a reverse mortgage. Then, no payments will need to be made for life.

Call us today just to see how much money you can get.  

801-277-5100

Visit us on our Website http://www.legendfinancialservices.com

Reverse Mortgages in Utah - Learn what a Reverse Mortgage is

Reverse Mortgages in Utah - Learn what a Reverse Mortgage is

What are some of the benefits of a reverse mortgage?

• Strengthen your personal and financial independence.
• Help pay for health care or other needs.
• You can never lose your home in foreclosure as long as you maintain the property tax and insurance payments.
• The loan is only paid off when the house is sold by you or your heirs, or all borrowers move out of the house.
• Keep your Medicare or Social Security benefits.
• Use it as a credit line and draw upon it as needed.
• Get all your cash right away.
• Get the best of both—get cash now and have a balance in reserve to use as a credit line.
• No Income Requirements: The homeowner does not need to be working and is not qualified based on income.
• Lock in your loan amount NOW before any more possible depreciation of your home's value.