After you have secured finances through a reverse mortgage, a home equity line of credit or solid retirement planning and you are happy with your current residence, now is the time to consider making alterations for the convenience of elder living. Rails on the porches, bathtubs and hallways may be a welcome addition. Also considering an electronic stair lift or elevator for those of us with the access to such exceptions. Karen Shan’s spotlights how many aging Americans are preparing for the 2nd half of their lives.
Yet the council states 35.9 percent of households aged 55 to 64 living in single-family detached homes reported difficulty with at least one physical activity, including dressing (9 percent), vision or hearing (11 percent), going out (11.9 percent), getting around the house (27.1 percent), remembering (12.7 percent) and working (23.8 percent). (more…)
Written by charles dennis on June 15th, 2007 with no comments.
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If you thought the USA vs. the USSR race to nuclear dominance was one for the ages, wait until you see Countrywide vs. BofA vs. Wells Fargo vs. the rest of the reverse mortgage banking industry. I have been watching Countrywide recruiting ads (for Simple Equity job fulfillment) pop up all over the country and thought to share this one from an Arizona career site with you guys. As I have stated before, competition is a good thing, but the little guys can remain competitive for so long, before the big guys swallow them up.
Written by charles dennis on June 14th, 2007 with no comments.
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Seth Sutal
Associated Press
Jun. 12, 2007 09:41 AM
Q. What is a reverse mortgage?
A. A reverse mortgage is a financial tool that lets you take money out of your home to help fund your retirement. However, financial advisers caution that they’re not for everybody, and should probably not be your first choice for supplementing your income.
They’re called “reverse” mortgages because instead of paying back a loan to a bank and building up equity, or ownership, in your house, the bank is paying you out part of the equity in your home in cash, either in a lump sum, regular payments, a line of credit or some combination. The debt incurred would be paid off once the home is eventually sold, typically once the person who took out the loan moves out, sells the home or dies.
These types of loans are relatively new, but more people are using them.
Darryl Hicks, spokesman for the National Reverse Mortgage Lenders Association, an industry group, says Congress passed a law in 1988 creating a reverse mortgage loan program that was guaranteed by the U.S. Department of Housing and Urban Development, or HUD.
Issuance of those loans has grown since then from a few thousand a year to 85,639 in 2006, up from 48,493 the year before, according to data compiled by the association from HUD.
Taking out a reverse mortgage is an option some people choose if they have a fair amount of equity in their home, need income, are at retirement age, and don’t want to sell or leave their home.
John Rother, the policy director for AARP in Washington, cautions that the fees involved with getting a reverse mortgage can be high - some $20,000 to $25,000. He also says you’re likely to get more money in your pocket if you sell the home.
“If your only objective is getting money, you’re better off selling,” Rother said. “This is not something you want to do casually - this is really more of a last resort.”
Rother also pointed out a factor referred to as “longevity risk.” If you elect to receive monthly payments over a fixed period of time and that span runs out while you’re still alive, you could suddenly lose that income while still being liable for upkeep on the house, taxes and insurance.
Bob Jazwinski, a CPA and financial planner based in Hermitage, PA, says he also counsels clients to think of reverse mortgages only as a last resort. He recommends considering alternatives such as selling the home and investing the proceeds in a way to generate income.
Jazwinski says that even if you do take out a reverse mortgage, in many cases you can only draw down some 40 percent to 50 percent of the equity value in the home. The rest will go to cover interest costs as well giving the lender a cushion in case the value of the home declines.
“There is a price to be paid - and that is the interest cost of the funds borrowed, and that accumulates over time,” Jazwinski said.
Written by charles dennis on June 14th, 2007 with no comments.
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Whenever I consider retirement from a good career, unless I put on my thinking cap I always thought about it as leaving the workforce cold turkey and riding off into the sun set. If not cold turkey, then going from working a 9-5 in April with a paycheck to living in a beach front condo in May with a full pension. But for most Americans, myself included thats not retirement, thats what we call winning the lotto. The San Diego Tribune gives a great picture of what a normal near term retiree will look like. While the article is long anyone considering retirement and using their home equity as a part of the strategy, should read closely here.
Bonnie Daly has a pretty long list of “to-do’s.”
First, she’d like to work as a docent for a local art museum. Then, it’s off to get some training to further her nursing skills. Later, she’d like to do some pro bono therapy work and maybe even join the Peace Corps at some point.
When exactly the 71-year-old San Diego resident will be able to get started on all this is a big question. Full Story here.
Written by charles dennis on June 11th, 2007 with no comments.
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It is a difficult task to find advice regarding mortgages that is not promotional or contrarian that also makes sense. The following piece is one you should consider with your reverse mortgage information gathering process.
DEAR BRUCE: I wish you would give us a general talk about reverse mortgages. I am not sure I trust the advice I receive from someone who is selling them. Are there special criteria that set candidates apart? — M.T, via e-mail
DEAR M.T.: A reverse mortgage is a useful tool for some people. In essence, it is simply borrowing against the equity you have built up in your home and receiving payments on a monthly or quarterly basis… Read More by Bruce Williams
Written by charles dennis on June 11th, 2007 with no comments.
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Arizona’s top reverse mortgage lenders thru April 2007. Look for Wells Fargo’s lead to fall as the year goes on with Bank of America and Countrywide making noise at the party.
| Top Arizona HECM Lenders |
HECM
Loans
2007 |
| WELLS FARGO BANK NA |
487 |
| SUN VALLEY FINANCIAL OF UTAH I |
295 |
| FINANCIAL FREEDOM SENIOR FUNDI |
194 |
| SUN AMERICAN MORTGAGE CO |
145 |
| SEATTLE MORTGAGE COMPANY |
105 |
| WSB MORTGAGE SERVICES INC |
52 |
| FIRST MAGNUS FINANCIAL CORP |
51 |
| ACADEMY MORTGAGE LLC |
46 |
| AMERICAN ADVISORS GROUP |
42 |
| PRIME SOURCE MORTGAGE INC |
25 |
| FIRST NATIONS HOME FINANCE COR |
24 |
| FIRST MARINER BANK |
22 |
| AMERICAN MORTGAGE PROFESSIONAL |
22 |
| COMUNITY LENDING INC |
22 |
| AMERICAN SENIOR FUNDING CORPOR |
21 |
| AMWEST CAPITAL MORTGAGE INC |
20 |
| U.S. FINANCIAL MORTGAGE CORPOR |
18 |
| PRIME CAPITAL INC |
17 |
| OMNI HOME FINANCING INC |
13 |
| OPTION FUNDING INC |
12 |
| MORGAN FINANCIAL INC |
12 |
| APPROVAL FIRST HOME LOANS INC |
12 |
| PACIFIC REVERSE MORTGAGE INC |
11 |
| EQUIPOINT FINANCIAL NETWORK IN |
11 |
Written by charles dennis on June 8th, 2007 with no comments.
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If you are like me, the range of financial advise you have heard over the years when it comes to how to take proper deductions on your taxes ranges the gambit from writing off money given to the guy outside of the 7-11 to not having to pay the IRS any taxes because the laws are “allegedly” illegal. I came across a solid article that goes into detail of deducting interest accrued from a home equity loan that you may want to know about:
The state of California recently reviewed a sample of state tax returns which claimed large mortgage interest deductions and found that 75% of the tax returns had claimed excessive interest deductions. There are rules that limit how much interest you can deduct for your mortgage and other monies borrowed against your house. However, historically, only the extremely (more…)
Written by charles dennis on June 8th, 2007 with no comments.
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As with any burgeoning market, the entrants to capitalize on the market are numerous. SWBC is throwing their name in the reverse mortgage hat and getting ready to compete with the likes of BofA, Countrywide and Wells Fargo. Usually competition is good for consumers, tough on businesses. Consolidation may occur in ten years, but for now the pool will keep on growing.
Southwest Business Corp. (SWBC) has created a new Reverse Mortgage division at the local company.
The new division will help homeowners 62 and older supplement their income, SWBC officials say.
A reverse mortgage allows homeowners to convert part of the equity in their homes into cash without having to sell the home or add to their monthly expenses. (more…)
Written by charles dennis on June 8th, 2007 with no comments.
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In light of the evolving market for reverse mortgages, Bronwyn Belling, a reverse mortgage specialist at the AARP Foundation, which doesn’t endorse any lenders, suggests, “Unless you have an urgent need, it may be worth your while to see how the changes in the market affect the products, the pricing and the choices.”
It will be interesting to watch the landscape of the Reverse Mortgage market over the course of the next 18 months. It is important to note that reverse mortgages as of this time, (06/2007) account for less than 4% of all mortgage volume, but the number is growing and lenders are paying attention.
Floyd Robinson, president of Bank of America’s consumer real estate division, said the purchase of Seattle Mortgage, coupled with the proprietary reverse mortgage it already has been testing, will “propel us to our target of being the No. 1″ reverse mortgage originator by the end of 2008.
According to NRMLA, In 2005 the Top 10 markets include: Los Angeles, CA (3,345 HECMs made); Santa Ana, CA (2,164); San Francisco (1,666); New York, NY (1,406); Denver, CO (1,362); Sacramento, CA (1,300); San Diego, CA (1,285); Detroit, MI (1,063); Coral Gables, FL (1,009); and Chicago (912).
Written by charles dennis on June 7th, 2007 with no comments.
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Tom Kelly from the Daily Herald examines the gigantic growth of the reverse mortgage industry and the arrival of several large banks in recent months. There is no doubt that the rise of boomers coming into retirement age will help to ignite the industry, but to what extent is this vehicle the best option for those in need of cash today? (more…)
Written by charles dennis on June 7th, 2007 with no comments.
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