Showing posts with label the reverse mortgage utah. Show all posts
Showing posts with label the reverse mortgage utah. Show all posts
Tuesday, July 30, 2013
Reverse Mortgage Exposed. Get your Free Videos.
Get your Free Videos by going to http://www.LegendReverseMortgage.com
Friday, July 12, 2013
What is a Reverse Mortgage? Utah Reverse Mortgage
http://www.LegendReverseMortgage.com What is a Reverse Mortgage? -
Reverse Mortgage in Utah- 801-277-5100 Call Mark Hammond,
Your Utah Reverse Mortgage specialist. Based in Salt Lake City, Utah.
Learn about Reverse Mortgages and save!
Reverse Mortgage in Utah- 801-277-5100 Call Mark Hammond,
Your Utah Reverse Mortgage specialist. Based in Salt Lake City, Utah.
Learn about Reverse Mortgages and save!
Wednesday, May 15, 2013
What is a Reverse Mortgage - Reverse Mortgage in Utah
What is a Reverse Mortgage - Reverse Mortgage in Utah
If your home is fully paid off, and
If you have enough cash in the bank, and
If you have a monthly income sufficient to pay all your bills,
YOU DO NOT NEED A REVERSE MORTGAGE!
But
If you are still making mortgage payments, or
If you need to have more cash in the bank, or
If you need more monthly income to live comfortably, or
If you need a lump some of cash to pay off bills, or
Help a child go to college, or pay for a mission, or
Travel or do or buy??
MAYBE A REVERSE MORTGAGE IS FOR YOU!
For some a reverse mortgage is not needed; but
For others a reverse mortgage is a God-send.
Why Lillie and Jim Chose a REVERSE MORTGAGE
(Ages 72 AND 77)
Lillie and Jim purchased a home in 2005:
Purchase Price…………$220,000.00
20% Down Payment...........44,000.00
30 Yr. @ 6.82%..............$176,000.00 loan amount
Their principle and interest payment was $1,000.00 a month for 30 years. There are 360 monthly payments in a 30 year loan (12X30=360). In five years they had made 60 payments but still had 300 ($1,000.00) payments left to pay. In other words they had paid $60,000.00 of the $360000.00 but still had $300,000.00 more to pay. They still had 25 years to go or 300 more $1,000.00 payments.
WHAT WERE THE OPTIONS?
Let the home go into foreclosure
Ask the children to make the mortgage payments
Put the home on the market and try to sell it.
Refinance the home
Rent out the home.
Get an FHA Reverse Mortgage Loan
What is a Reverse Mortgage - Reverse Mortgage in Utah
Reverse Mortgage for Seniors in Salt Lake City - 801-277-5100 Call Mark Hammond, Your Utah Reverse Mortgage specialist. Based in Salt Lake City, Utah. Learn about Reverse Mortgages and save!
Wednesday, May 8, 2013
Legend Reverse Mortgage in Utah - Testimonial Video
REVERSE MORTGAGES ARE NOT FOR EVERYONE!
If your home is fully paid off, and
If you have enough cash in the bank, and
If you have a monthly income sufficient to pay all your bills,
YOU DO NOT NEED A REVERSE MORTGAGE!
But
If you are still making mortgage payments, or
If you need to have more cash in the bank, or
If you need more monthly income to live comfortably, or
If you need a lump some of cash to pay off bills, or
Help a child go to college, or pay for a mission, or
Travel or do or buy??
MAYBE A REVERSE MORTGAGE IS FOR YOU
For some a reverse mortgage is not needed; but
For others a reverse mortgage is a God-send.
Why Lillie and Jim Chose a REVERSE MORTGAGE
(Ages 72 AND 77)
Lillie and Jim purchased a home in 2005:
Purchase Price…………$220,000.00
20% Down Payment...........44,000.00
30 Yr. @ 6.82%..............$176,000.00 loan amount
Their principle and interest payment was $1,000.00 a month for 30 years. There are 360 monthly payments in a 30 year loan (12X30=360). In five years they had made 60 payments but still had 300 ($1,000.00) payments left to pay. In other words they had paid $60,000.00 of the $360000.00 but still had $300,000.00 more to pay. They still had 25 years to go or 300 more $1,000.00 payments.
In the 2008 market crash they lost their investments and retirement income. In August of 2010 Jim’s company downsized and Jim lost his job. They were not able to survive on their meager social security payments.
Their children volunteered to make the mortgage payments or assume the loan. That was another 300 ($1,000.00) payments for another 25 years, totaling $300,000.00.
Would it be wise for anyone to pay $1,000.00 a month, for the next 300 months to live in their home, if they didn’t have to? Consider the costs so far:
Down Payment………………………………...………..$44,000.00
Five years P.I… ………………………..…………….…..60,000.00
Property taxes and insurance ($300.00 X 60 months)……18,000.00
30X40 two story barn and other improvements…….….....36,000.00
Total cash in the home…….............................................$158,000.00
Is it wise to pay another?……………….…….…….….…300,000.00
Total cost plus 25 more years for taxes and insurance.....$458,000.00
After five years they still owed about $161.000.00 with 300 payments left. With no income they immediately fell behind in their house payments.
WHAT WERE THE OPTIONS?
Let the home go into foreclosure
Ask the children to make the mortgage payments
Put the home on the market and try to sell it.
Refinance the home
Rent out the home.
Get an FHA Reverse Mortgage Loan
CONSIDERING THE 6 OPTIONS!
Let the home go into foreclosure.
Unthinkable: lose our $158,000.00 investment, our credit and a place to live.
Let the children make our mortgage payments.
Unthinkable: Nice to know they offered and are capable but they have their own expenses and trials. We do not want to become a financial burden on our children.
Put the home on the market and try to sell it.
Unrealistic: The chances of selling a home in this market at a fair price are very poor. It is also very expensive to sell (8-9%) and we would have only a little cash after paying off the loan and no place to live.
Refinance the home.
Impossible: Must have good income and qualify for the loan because you must make payments for the duration of the loan. With no job it is impossible to refinance.
Rent out the home.
Impractical: The mortgage payments are more than the home could be rented for in today’s market. And…where would Lillie and Jim live?
6. Get an FHA Reverse Mortgage Loan.
Practical: About 5% in costs; and because there are no mortgage payments we needed no credit or income. We had already put many thousands of dollars into our home. This option allowed us to stay in our home as long as we wished with no more mortgage payments for the rest of our lives. For Lillie and Jim this was the perfect solution.
Getting a Reverse Mortgage is less expensive than selling a home through a real estate broker. The Reverse Mortgage costs about 5% of the appraisal; selling with a broker costs about 8-9%. The seller of real estate has higher sales costs and pays taxes on profits. The individual getting a reverse mortgage always owns his property, gets to live in the home with no mortgage payments forever, gets tax free money, and focuses on savings, not expenses.
HOW MUCH IS THE REVERSE MORTGAGE SAVING?
If Jim and Lillie live 5 years they will save $60,000.00 in mortgage payments.
If Jim and Lillie live 10 years they will save $120,000.00 in mortgage payments.
If they live 15 years they will save $180,000.00 in mortgage payments
If they live 20 years they will save $240,000.00 in mortgage payments.
If they live 25 more years they will save $300,000.00 in mortgage payments.
What Happens In The End?
When does the Reverse Mortgage have to be paid off?
When the home is sold.
When the home is no longer the primary resident of the senior couple.
A year after the death of the last senior living in the property.
A year after the last senior abandons the property (i.e. rest home, etc.)
If the taxes and insurance are not paid, or the property not kept in repair.
When the time comes to pay off the loan, if the amount of the loan is more than the property is worth, the children can let the home go back to the lender. The property will then be placed on the market at a fair market value and sold on the open market as in a normal real estate sale. Any losses to the lender will be paid by the insurance company that insured the loan originally. If the heirs are interested in buying the property they can purchase the property when it is offered for sale on the open market. Regardless of how much the loan has grown the heirs are not responsible for it.
The reverse mortgage is a non-recourse loan. A non-recourse loan is a loan which does not allow the mortgage company or anyone else to go to court and get a deficiency judgment because they lost money on their loan. In other words, if there is a loss of money when the property is sold and the lender cannot recover the full amount owed on the mortgage, the lender can not come after the owners to recover any financial loss whatever.
If the amount of the loan is less than the market value of the property the heirs may choose to sell the property and make a profit. Or they may elect to refinance the property and occupy the property themselves. The heirs will never have to pay more than the property appraises for at the time of the future sale.
The Future Real Estate Market?
How unstable will our economy be in the future? Two or three years ago we could have sold our properties for much more than they are worth today. Some have struggled and paid off a home mortgage of $200,000.00 only to see the market sink, buyers drop off and property values tumble to 50% of what they paid for their property. No one can predict the future. The home your children inherit from you could be worth a million dollars or next to nothing, depending upon things completely out of your control, the economy.
IN SUMMARY: No one can predict what 10 or 20 years will bring. Today you might be able to get a $100,000.00 reverse mortgage on your home; next year it will be more or less, depending on the market. Two or three years ago you could have gotten much more than you can today.
Reverse Mortgage for Seniors in Salt Lake City - 801-277-5100 Call Mark Hammond, Your Utah Reverse Mortgage specialist. Based in Salt Lake City, Utah. Learn about Reverse Mortgages and save!
Friday, March 1, 2013
Reverse Mortgage in Salt Lake City
How do you begin to learn about a reverse mortgage? You contact a reverse mortgage professional at a lender who specializes in these loans.
Reverse Mortgage Process:
Present you with a full range of reverse mortgage products that are available from his/her company;
Explain the terms, benefits and costs of each product;
Clearly explain his/her responsibilities to you;
Clearly explain your responsibilities under the terms of a reverse mortgage, including paying property taxes on time, maintaining insurance and maintaining your home in good condition;
Carefully review your income, assets and expenses to help you assess whether you can meet these obligations and determine whether the reverse mortgage is the best financial product for your situation;
Meet with you as frequently as you need and, at your request, also meet with other members of your family or your financial advisors;
Explain that, according to Federal statute, you must complete a reverse mortgage counseling session and provide you with a list of HUD-approved counselors you may contact. (As a means of maintaining a hands-off relationship so that you get unbiased third-party advice, a lender is not permitted to recommend any specific counselor);
Prepare you for making your counseling session the most effective by providing you with questions you might want to ask and information you should confirm.
Types of Reverse Mortgages
The products, all or some of which a lender may have available, include:
Home Equity Conversion Mortgage (HECM)
HECM is the commonly used acronym for a Home Equity Conversion Mortgage, which is a reverse mortgage insured by and regulated by the Federal Housing Administration, which is part of the U.S. Department of Housing and Urban Development (HUD).
A HECM is not a government loan. It is a loan issued by a private lender that is insured by the Federal Housing Administration (FHA). The borrower pays an insurance fee upfront at loan origination, and each year the borrower is charged an annual insurance fee of 1.25% of the outstanding loan balance. Your loan balance thus increases by the amount of this fee. The insurance purchased by this fee protects the borrower (1) if and when the lender is not able to make a payment; and (2) if the value of the home upon selling is not enough to cover the loan balance. In the latter case, the FHA will pay off the remaining balance. Currently, HECMs make up 99% of the reverse mortgages offered in America. HECMs come with rules and regulations that include a requirement that the borrower receive third-party counseling.
HECM OPTIONS
HECM Standard
The term “HECM Standard” refers to a traditional Home Equity Conversion Mortgage, which has been available since 1989. There are currently more than 500,000 senior homeowners who have standard HECMs on their homes. The amount of money you receive is based on a table created by HUD and is based upon your age, the current appraised value of your home and interest rates. Fees can include an origination fee, an upfront mortgage insurance premium (MIP), an appraisal fee, traditional closing costs and a monthly servicing fee. (More on fees later.) Beginning April 1, 2013, this product option is only available with an adjustable interest rate. This product is desirable for senior homeowners who need the most money available to them.
HECM Saver
HECM Saver is a lower-cost version of the HECM Standard. The savings comes from a lower upfront mortgage insurance premium (MIP). The MIP collected by the Federal Housing Administration on a HECM Saver is equal to 0.01% of the value of the home, rather than 2% on a HECM Standard. On a$250,000 home, for example, you pay $25 in MIP under the Saver option, instead of $5,000 for a HECM Standard. The trade-off is that you receive 10-18% less money. This product is desirable for people who don’t need as much money compared to a HECM Standard, or don’t want to pay the higher fees. Because the fees are lower, and no monthly payment is required, it may also prove to be an alternative to obtaining a home equity line of credit that requires monthly payments.
HECM for Purchase
While retirees typically use a HECM to cover living expenses, supplement income, eliminate debts, or pay for healthcare, a growing segment of the senior population is using HECMs to purchase new homes that better suit their needs. The advantage of using a HECM for Purchase is that the new home is purchased outright, using funds from the sale of the old home, which are then combined with the reverse mortgage proceeds. This homebuying process leaves you with no monthly mortgage payments. While study after study reveals that an overwhelming percentage of seniors want to continue living in their current home for as long as possible, for some people that isn’t the best, or safest, option. HECM for Purchase offers a solution for downsizing into a place that’s more easily navigable, possibly more energy efficient, with lower maintenance costs, or which is closer to friends and family.
Proprietary Reverse Mortgages
Right now, very few proprietary reverse mortgages exist. However, it’s important to mention them, because market conditions may change in the foreseeable future when property values stabilize.
Proprietary reverse mortgages are non-FHA insured reverse mortgages offered by banks and mortgage companies. They are not subject to all of the same regulations as HECMs. In some states, no counseling is required, although it is always recommended and required by some lenders.
Proprietary reverse mortgages are sometimes called “jumbo” reverse mortgages, because they are taken on higher-valued homes, generally $750,000 or more.
REDLIGHT
To obtain a reverse mortgage on a home, that home must be your primary residence, which means you must reside there 183 days per year or more. When you obtain a reverse mortgage and each year thereafter, you must confirm your residency by signing an Annual Occupancy Certificate that will be provided to you by your Servicer. If you must leave your home for an extended period, due to work or health or for some other reason, you should notify your Servicer and coordinate winterization and other preservation issues. If you are out of the home for twelve consecutive months, your loan could be in default. If, for any reason, you rent the property to someone else, it precludes the property from being your primary residence and the loan is in default. If the loan is in default, your Servicer will request HUD approval that the loan become due and payable.
Additional Information:
In addition to company-specific educational materials provided by a lender, a prospective applicant can gather information from independent sources, such as newspapers, magazine articles and informational websites. Educational material is available from HUD (hud.gov), AARP (AARP.org) and NRMLA (reversemortgage.org). Prior to being counseled, you will receive an information packet from either the counseling agency, or the lender, depending on who you contact first. This information packet will include the following materials:
An informational document called "Preparing for Your Counseling Session"
A printout of loan comparisons, so the counselor may review what you are potentially eligible to receive from the reverse mortgage
A printout of the Total Annual Loan Cost (TALC) Disclosure required by the Federal Reserve Board on all reverse mortgage transactions. This form illustrates the cost of the loan if it is outstanding for different durations of time.
801-277-5100 Legend Financial Services specializes in Reverse Mortgages. Based in Salt Lake City, Utah. 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. http://www.legendfinancialservices.com/
Watch a Video at http://www.youtube.com/watch?v=ejzyNK3c2qg
Saturday, February 2, 2013
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:
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.
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.
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
Thursday, January 31, 2013
Reverse Mortgage Utah - REVERSE MORTGAGES ARE NOT FOR EVERYONE!
REVERSE MORTGAGES ARE NOT FOR EVERYONE!
If your home is fully paid off, and
If you have enough cash in the bank, and
If you have a monthly income sufficient to pay all your bills,
YOU DO NOT NEED A REVERSE MORTGAGE!
But
If you are still making mortgage payments, or
If you need to have more cash in the bank, or
If you need more monthly income to live comfortably, or
If you need a lump some of cash to pay off bills, or
Help a child go to college, or pay for a mission, or
Travel or do or buy??
MAYBE A REVERSE MORTGAGE IS FOR YOU!
For some a reverse mortgage is not needed; but
For others a reverse mortgage is a God-send.
Lillie and Jim purchased a home in 2005:
Purchase Price…………$220,000.00
20% Down Payment...........44,000.00
30 Yr. @ 6.82%..............$176,000.00 loan amount
Their principle and interest payment was $1,000.00 a month for 30 years. There are
360 monthly payments in a 30 year loan (12X30=360). In five years they had made 60
payments but still had 300 ($1,000.00) payments left to pay. In other words they had
paid $60,000.00 of the $360000.00 but still had $300,000.00 more to pay. They still had
25 years to go or 300 more $1,000.00 payments.
In the 2008 market crash they lost their investments and retirement income. In August of
2010 Jim’s company downsized and Jim lost his job. They were not able to survive on
their meager social security payments.
Their children volunteered to make the mortgage payments or assume the loan. That was
another 300 ($1,000.00) payments for another 25 years, totaling $300,000.00.
Would it be wise for anyone to pay $1,000.00 a month, for the next 300 months to live in
their home, if they didn’t have to? Consider the costs so far:
Down Payment………………………………...………..$44,000.00
Five years P.I… ………………………..…………….…..60,000.00
Property taxes and insurance ($300.00 X 60 months)……18,000.00
30X40 two story barn and other improvements…….….....36,000.00
Total cash in the home…….............................................$158,000.00
Is it wise to pay another?……………….…….…….….…300,000.00
Total cost plus 25 more years for taxes and insurance.....$458,000.00
After five years they still owed about $161.000.00 with 300 payments left. With no
income they immediately fell behind in their house payments.
WHAT WERE THE OPTIONS?
1. Let the home go into foreclosure
2. Ask the children to make the mortgage payments
3. Put the home on the market and try to sell it.
4. Refinance the home
5. Rent out the home.
6. Get an FHA Reverse Mortgage Loan
CONSIDERING THE 6 OPTIONS!
1. Let the home go into foreclosure.
Unthinkable: lose our $158,000.00 investment, our credit and a place to live.
2. Let the children make our mortgage payments.
Unthinkable: Nice to know they offered and are capable but they have their own
expenses and trials. We do not want to become a financial burden on our children.
3. Put the home on the market and try to sell it.
Unrealistic: The chances of selling a home in this market at a fair price are very
poor. It is also very expensive to sell (8-9%) and we would have only a little cash
after paying off the loan and no place to live.
4. Refinance the home.
Impossible: Must have good income and qualify for the loan because you must make
payments for the duration of the loan. With no job it is impossible to refinance.
5. Rent out the home.
Impractical: The mortgage payments are more than the home could be rented for in
today’s market. And…where would Lillie and Jim live?
6. Get an FHA Reverse Mortgage Loan.
Practical: About 5% in costs; and because there are no mortgage payments we
needed no credit or income. We had already put many thousands of dollars into our
home. This option allowed us to stay in our home as long as we wished with no more
mortgage payments for the rest of our lives. For Lillie and Jim this was the perfect
solution.
Getting a Reverse Mortgage is less expensive than selling a home through a real
estate broker. The Reverse Mortgage costs about 5% of the appraisal; selling with a
broker costs about 8-9%. The seller of real estate has higher sales costs and pays taxes
on profits. The individual getting a reverse mortgage always owns his property, gets to
live in the home with no mortgage payments forever, gets tax free money, and focuses on
savings, not expenses.
HOW MUCH IS THE REVERSE MORTGAGE SAVING?
If Jim and Lillie live 5 years they will save $60,000.00 in mortgage payments.
If Jim and Lillie live 10 years they will save $120,000.00 in mortgage payments.
If they live 15 years they will save $180,000.00 in mortgage payments
If they live 20 years they will save $240,000.00 in mortgage payments.
If they live 25 more years they will save $300,000.00 in mortgage payments.
What Happens In The End?
When does the Reverse Mortgage have to be paid off?
1. When the home is sold.
2. When the home is no longer the primary resident of the senior couple.
3. A year after the death of the last senior living in the property.
4. A year after the last senior abandons the property (i.e. rest home, etc.)
5. If the taxes and insurance are not paid, or the property not kept in repair.
When the time comes to pay off the loan, if the amount of the loan is more than the
property is worth, the children can let the home go back to the lender. The property will
then be placed on the market at a fair market value and sold on the open market as in a
normal real estate sale. Any losses to the lender will be paid by the insurance company
that insured the loan originally. If the heirs are interested in buying the property they can
purchase the property when it is offered for sale on the open market. Regardless of how
much the loan has grown the heirs are not responsible for it.
The reverse mortgage is a non-recourse loan. A non-recourse loan is a loan which
does not allow the mortgage company or anyone else to go to court and get a deficiency
judgment because they lost money on their loan. In other words, if there is a loss of
money when the property is sold and the lender cannot recover the full amount owed
on the mortgage, the lender can not come after the owners to recover any financial loss
whatever.
If the amount of the loan is less than the market value of the property the heirs may
choose to sell the property and make a profit. Or they may elect to refinance the property
and occupy the property themselves. The heirs will never have to pay more than the
property appraises for at the time of the future sale.
The Future Real Estate Market?
How unstable will our economy be in the future? Two or three years ago we could
have sold our properties for much more than they are worth today. Some have struggled
and paid off a home mortgage of $200,000.00 only to see the market sink, buyers drop
off and property values tumble to 50% of what they paid for their property. No one can
predict the future. The home your children inherit from you could be worth a million
dollars or next to nothing, depending upon things completely out of your control, the
economy.
IN SUMMARY: No one can predict what 10 or 20 years will bring. Today you
might be able to get a $100,000.00 reverse mortgage on your home; next year it will be
more or less, depending on the market. Two or three years ago you could have gotten
much more than you can today.
801-277-5100 Legend Financial Services specializes in Reverse Mortgages. Based in Salt Lake City, Utah. 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. http://www.legendfinancialservices.com/
Watch a Video at http://www.youtube.com/watch?v=ejzyNK3c2qg
Saturday, January 26, 2013
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.
Saturday, January 12, 2013
Shame On Banks - Mortgages in Salt Lake City, UT
Mark's Credit Tips
As your source for creative mortgage financing, I've "done my homework" on credit and credit scoring. In doing so, I've found there are a lot of misconceptions out there about how credit scores are determined. I find quite often that well-intentioned people are doing things that will hurt their credit scores without knowing it. Many times they were told to do these things by someone in the mortgage or banking industry. Go figure.
I thought it would be beneficial to pass on what I have learned from the credit bureaus and to clarify some of the most common misconceptions about credit scores.
Here are the factors that affect credit scores in order of importance. The percentages shown are the extent that these items affect the score--or how much "weight they carry."
Payment History - 35% of what determines your score - DON'T BE LATE
Public Record and collection items
Recency, frequency, and Severity of delinquencies (in that order)
Outstanding Debt - 30% of what determines your score - DON'T MAX OUT
Number of balances recently reported
Average balance across all trade lines
Relationship between total balances and total credit limit on revolving trade lines
Credit History - 15% of what determines your score - DON'T CLOSE CREDIT CARDS
Age of oldest trade line
Number of new trade lines
Pursuit of new credit - 10% of what determines your score - ONCE ESTABLISHED, LAY LOW
Number of inquiries and new accounts opened in last year
Amount of time since last inquiry
Types of credit in use - 10% of what determines your score - KEEP A GOOD MIX OF CREDIT
The number of trade lines reported for each type:
Bank cards, travel/entertainment cards, dept. store cards
Personal finance company references ("Same as cash" NOT good)
Installment loans
The most shocking thing is that "paying on time" only accounts for 35 percent of what determines your score. Even if you always pay on time, you CAN still have VERY LOW SCORES if you're maxed out on everything, for example.
Hardly anyone realizes that 30 percent of what determines the score is how outstanding debt is managed. "Maxing out" credit cards is the biggest "no no." Maintain a low ratio (49% max suggested) of how much you owe in relation to how much your credit limit is. Request credit line increases or pay down balances to avoid a lower score due to being over extended.
NOTE: Even if you pay off the account on the next business cycle, there's a good chance the high balance will report before you do so. Then the damage is done.
Next, it's wrong to assume that scores will improve by closing accounts. People think that by having too many credit cards with high limits, their scores will be low due the risk of a "mad spending spree" that could cause them to get over-extended.
This is a fallacy.
Maintaining stability and control with large credit limits will help to produce very high scores. Closing accounts, on the other hand, will reduce the amount of credit available, which will make the person appear more "maxed out." KEEP ACCOUNTS OPEN!
Finally, credit inquiries and new credit lines can temporarily lower the score until those accounts are seasoned. Credit inquiries can affect credit scores for up to 1 year. People with very little credit must pass through this in order to get established. However, people with established credit should be careful about applying for and opening up a lot of new credit right before they apply for a home loan.
NOTE: If you need a loan, don't hesitate to have me run a credit report to assess your chances. The advice I can give you to improve your scores will make them go up way more than the few points they might lose by having an inquiry. For example, don't wait till your rental lease is up toget qualified. Get with me months before, so that if something needs to be fixed, you'll have time to do it.
Credit scores are very accurate in forecasting trends that lead to severe delinquency. People on the road to delinquency, tend to be over-extended, and to continually be in the pursuit of more credit. With most mortgage programs these days, the interest rates are driven by the credit scores, especially at high LTV (Loan to Value) ratios. However, I have additional programs that are still underwritten the "old fashion way," based on payment history alone without regard to credit scores for those who learn this too late.
Hopefully this information will be valuable to you. If you follow these rules, you'll improve your chances of obtaining the best loan programs available for your situation. Call me if you have any questions. TELL A FRIEND about this part of the site. You know you know several people who should read this. Call me for the best loans with high and low credit scores. Buy or refi with no $ down, and no income verification 801-808-6275.
Friday, January 11, 2013
Reverse Mortgages in Salt Lake City Utah
REVERSE MORTGAGE ELIGIBILITY
To be eligible for a reverse mortgage, the Federal Housing Administration (FHA) requires that all homeowners be at least age 62 and have sufficient equity in the home That’s IT! There are no income or credit requirements for a reverse mortgage. Borrowers can even be in foreclosure or bankruptcy and the reverse mortgage can pay off the existing loan.
Simply provide your Legend Financial Services loan consultant with your age(s), the approximate value of the home and the existing loan balance(s). Your loan consultant will let you know the approximate loan amount that you can get (subject to appraised value). Whatever amount exceeds your loan balance is yours to keep and can be taken as a lump sum, line of credit, or monthly payments to you. If you don't have a mortgage, the entire amount of the loan is available for you to use.
BENEFITS OF A REVERSE MORTGAGE
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.
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