Reverse mortgages allow you to access your home equity four different ways. We will examine those ways so you know how to access your reverse mortgage equity.

1. Lump Sum – You have the option of taking all the funds available to you at one time. You can use the money for anything you want, but the most common use is paying off the existing mortgage (if you have one) on your home.

2. Monthly Annuity – Not a true annuity, but a monthly amount of money that is guaranteed to continue as long as you or your spouse lives in the home. Wouldn’t retirement be more comfortable if you had a little more money each month? There is also a tenure option that gives you a larger payment for a specified period of time. More common though, is the lifetime payment.

3. Credit Line – If you don’t need the money today, and you want to have a reserve account for emergency, this is probably the option for you. There is no interest being accumulated unless you use the money. It will only be charged if you actually borrow it.

4. A Combination of the Above – You can customize your loan to combine any of the above options. If you need a small lump sum, a monthly boost to your income, and you want the rest to be in a line of credit, mixing and matching is the way to go. Additionally you can alter your plan anytime you want to get more monthly or get an additional lump sum for a small fee.

If you choose anything other than a lump sum, know that you will have to take the adjustable rate mortgage (ARM). There is only one option if you choose the fixed rate. It is a lump sum. You will have to draw it all when your loan closes.

Before committing to any reverse mortgage programs, make sure you have all the facts. Visit our website for more reverse mortgage information. There is also a free reverse mortgage calculator to see how much money is available to you.

One of the most misunderstood parts of the home buying process is the inspection. For instance, buyers often mistakenly believe that if the home looks to be in good condition it doesn’t require an inspection. Nothing could be further from the truth! In fact, it is recommended by real estate professionals that every home be inspected whether it is brand-new or 50 years old.

Your best protection against buying a home that is substandard in any way is to have it inspected by a qualified home inspector. It can be difficult as you have probably falled in love with the house and are imagining how your children will look playing in the garden. You don’t want to think that there could possibly be anything wrong with your future home, but isn’t it better to know sooner rather than later that the roof will need replacing in a year or two.

While it may seem costly to spend $300-$500 on a home inspection, it is a lot cheaper than going to see an attorney and starting a court case to get the $5,000 bill for a new drainline paid by the old owners who knew about the problem when they sold. People are not always dishonest, sometimes they genuinely think that the plumbing leak in the bathroom doesn’t matter as it occured a few months ago.

The simplest and easiest way to protect yourself is to have a certified home inspector to really go over the house before you purchase it. Make sure that your real estate agent gives you plenty of time in the contract to have your inspection and ask the seller to fix any defective items. Some states even allow for a due diligence time period meaning that the buyer can get out of the contract for any reason during that time period whether it is inspection related or not.

Remember the home inspector is working for you so if you are nervous about something, whether it is the tree that seems to lean into the house or the funny noise coming from the lights, make sure to ask him while he is there. It is a wise idea to make a list of questions before he comes to inspect the house, so nothing is forgotten. Once he is gone then it is too late to ask him to take a look at something.

Wondering what a reverse mortgage is exactly? I have no simple way to explain but if you are at or approaching retirement age then it is well worth looking into.

I often ask new clients what they think their home is worth. Not surprisingly, the answers I get back are usually overly-optimistic. Nonetheless, these clients often have a very strong sense of how much their home is worth to them. In fact, I find that people who come to me looking for reverse mortgages are particularly good at separating the intrinsic value of their home from its market value.

Despite the constant movements in real estate prices, the inherent value that a home has to a borrower is usually much higher than market value. Our homes are more than cinder blocks and wood. They often represent the very essence of our lifestyles and are the places that give us the most comfort. The value of these aspects of our home cannot be quantified in the open market. For many individuals, these inherent aspects of our homes represent the most important and meaningful parts of a home that can’t be value through an appraisal or sale of the home.

Just because a reverse mortgage may make sense for your individual circumstances does not mean that you shouldn’t be very careful and thoughtful in developing an overall strategy to put those funds to work. Smart reverse mortgage borrower look at reverse mortgage proceeds as but one tool in their retirement arsenal. How you ultimately use your funds is, of course, entirely your decision. However, individuals would be well advised to cautiously develop an overall retirement strategy before withdrawing any money out of their equity.

Seniors who carefully consider their overall financial picture and include their home equity in their retirement planning are more likely to live comfortably during their later years. Seniors who ignore their home equity are missing one of the largest pieces of their retirement puzzle. Although these loans are not appropriate for everyone under every circumstance, if your home consists of a large part of your net worth, you should definitely think about reverse mortgages and how they may help your retirement planning.

If eliminating monthly mortgage payments, increasing cash available during your retirement years and maintaining ownership in your home for the foreseeable future sounds like a solid long-term solution to your financial needs, then a reverse mortgage may be the right option for you. Check it out today. The information is free and the benefits may be enormous.

Looking for more information on a guide to reverse mortgages or lowest mortgage refinance rates? Then make sure to check out Tim Begert’s online resources.

Reverse Mortgage Cons:

1. (PMI) Mortgage Insurance – Any time you do an FHA loan, you will have mortgage insurance. This insurance is there to protect you in the unlikely event that your home is worth less than what you owe on it. The only time this realistically happens, is when we go though a recession in real estate and property values drop. The good news is that you can never be kicked out of your home or forced to move, regardless of the balance. This is all thanks to the mortgage insurance.

2. Compound Interest – Everyone likes to earn it, no one likes to pay it. Simply defined, it is interest which is calculated not only on the initial principal but also the accumulated interest of prior periods. If you’ve ever had a savings account or investment that you rolled the earnings back into, you have likely earned it. Since you are not making payments on your loan, compound interest will add up.

3. Borrowing against your heirs’ inheritance – Some will say that you’re spending their inheritance. Whose money is it? I say, if you need it, you use it. Leave whatever is remaining to the heirs and not a penny more. No one is suggesting you waste the money, but use what you need to be comfortable.

The Pros of a Reverse Mortgage:

1. Maintain Your Independence – What could be more embarrassing than asking your kids for financial help to cover monthly expenses? Would you like to need to move in with your kids? You can use your home’s equity to make ends meet and keep your dignity.

2. The Ability to Keep Your Home – Not having to move potentially decades of collected items and memories might be the best reason to do a reverse mortgage. Just the thought of moving makes most people cringe. By taking advantage of a reverse mortgage, you can afford to keep the home you love while affording the retirement you deserve.

3. Life Becomes Affordable – So many seniors live in an impoverished state. They have gotten used to being broke. A reverse mortgage can allow you to access your equity and turn it into a lifetime income stream. What if you could get $200 or $400 or even more every month? You would probably feel like you’ve won the lottery.

4. No Mortgage Payments – There are no monthly payments, and you don’t have to pay back the loan as long as you maintain the home as your primary residence. This can really be helpful when times are tough.

Since fees are not a consideration for getting a loan, they weren’t mentioned above. The new programs available will allow you to (usually) waive any origination frees and possibly get a substantial credit towards your mortgage insurance. The reduction in fees is in the neighborhood of 50%, saving you thousands of dollars.

I have something to admit before we summarize. Yes, I am a reverse mortgage loan officer. I really believe that the best tool to help a senior homeowner is a reverse mortgage. They are not for everyone, and I know that, but I really cringe when I hear someone saying they are bad. There is no bad tool. It is the way you use the tool that makes it good or bad. After saving (paying down your mortgage) for years, shouldn’t you be able to use your equity to make your retirement better?

Now it is up to you to decide. Is this a tool that can help you or someone you know? Will your life be enhanced with a reverse mortgage? If you are still unsure and want more information, read more of our articles on our website.

David Prulhiere is the owner of Redwood Financial Services and he specializes in reverse mortgages. If you would like to read more about reverse mortgage pros and cons? You can also see other articles and blogs with additional reverse mortgage information.

1. Getting a Reverse Loan for the Purpose of a Short Term Fix.

The cost of a reverse mortgage would normally make it a mistake to use for a short term fix. While there are definitely times to use it short term, think of a reverse mortgage as something you are going to use for the next 10+ years. In the event that you are in some serious financial dire straights, like possible foreclosure or in need of repairs to make your home habitable, it may make sense to do a short term reverse Loan. Being aware of the fees associated with the loan will help you determine whether or not you are making the smart choice. Of course, a trusted loan officer will be able to guide you, but ultimately, you need to be the one making the decision.

2. A Reverse Mortgage Can Affect Your Government Benefits.

The benefit that is most commonly affected is Medicaid. If you are on it, you know that there is a limit to how much cash you are allowed to have to be considered for this program. What can happen is; the senior uses a reverse mortgage to get a lump sum of money to do some repairs to their home. They withdraw $20,000 and put it in the bank waiting for the work to get done. When the new month rolls around, they have exceeded the Medicaid limits, and now can be disqualified. Another way that it can happen is when using a reverse mortgage to get additional income monthly. If you needed only $200.00 a month to make ends meet, but you got $400 a month so you could have a buffer, after several months you could save up “too much” money and be disqualified.

3. Using an Inexperienced Loan Officer for Your Reverse Mortgage.

Can you believe that a loan officer at a bank doesn’t need to be licensed? There is no state licensing or education required on the proper way to handle loans. Just about anyone can qualify to be a loan officer in a bank. If you just walk in and say, “I would like to be a loan officer”, you will probably get a desk and a name badge. Call it biased if you like, but I prefer the idea of talking to a trained professional and would like to see a license showing that they can be held responsible. Because the commission is usually pretty good, a loan officer new to the business will sometimes try to make as much money as possible on your loan. Since the terms are all pretty much the same wherever you go, you should really interview your loan officer and test their knowledge. Make sure that you are comfortable with them, as you are trusting your future finances to them.

4. Not Doing a Reverse Mortgage Loan For Fear of Them.

There are so many people afraid of a reverse mortgage for no other reason than they just don’t know who to trust. The facts seem too good to be true, so they shy away. What I would like to show is how to know what is true and how to make a smart decision. First off, there are too many “experts” in a field that they know nothing about. The amount of disinformation is almost overwhelming, even for someone who knows the truth. I have seen financial planners who will state that you lose your home when you do a reverse mortgage. I have heard several people say that you will leave excessive debt to your heirs. So here is a little advice that may soothe your concerns: First, try to find a loan officer that you feel you can trust. If you have an uncomfortable feeling about the loan officer, you should probably find someone else. You are not tied to the first person you talk to. Second, don’t listen to the advice of everyone out there. There is a great article (if I say so myself) called “Bad Advice From Good People about Reverse Mortgages”. Check it out if you want to see an article about how to qualify the person giving you the advice. The gist of it is; see if the person you’re seeking advice from actually knows anything. In the example above, the financial planner may be a genius about retirement money, but probably has never originated a loan. If you ask your kids for advice, which is strongly recommended, make sure they know what they are talking about. If they are not qualified to advise, have them attend your meeting with the loan officer. This also applies to you. I have seen people disqualify themselves because they don’t think they qualify. The best advice here is to ask a true professional in the field.

5. Moving Too Quickly During the Reverse Mortgage Loan Loan Process.

It only takes about 10 minutes to teach you everything you need to know on a reverse Mortgage Loan. But you will probably have questions that will make you more comfortable when you get the answers. Sometimes these questions take a little time to formulate, so don’t let your loan officer rush you into making a decision. Don’t mistake doing your loan quickly with pushing you to make up your mind in a hurry. Once you have determined you want a reverse mortgage, the process should be fairly quick. It will take about a month to a month and a half to get your loan closed.

6. Waiting Until You are Older So You Can Get More Money.

Here is a bonus mistake. Remember your age and the value of your home combined with the interest rate determines how much money is available to you. While being a few years older can net you a few thousand dollars more, an interest rate change of 0.5% higher can make tens of thousands of dollars less available to you. So while it is true that you get more money when you are older, you have to consider that the interest rate will probably go up. Then any age benefit you were getting will be lost.

See more articles and blogs at Redwood Reverse Mortgage. David Prulhiere is the owner of Redwood Financial Services and is a specialist in reverse mortgage education and loans.

I’m a reverse mortgage specialist who closed a for an unique family. They owed nothing on their home. The family’s residence greatly exceeded the maximum claim amount. The husband was still working as a consultant and brought in enough for living expenses and property taxes. With their financial abundance including the equity from the residence, was it necessary to draw money from their home?

During my inquiry, I found out that their son had recently completed Veterinary School and was about to begin his own practice. They decided to assist they son with the creation of his new business with funds from a Reverse Mortgage. Imagine the pride they will feel once their son has built a thriving business with their direct influence.

This was an intelligent to proceed this way for several reasons:

These funds are not taxed (Tax-Free).

2 – The Funds from the Reverse Mortgage came in a Line of Credit. The funds were doled out in identifiable increments for the purpose of the business only. Many seniors that are in the process of creating a Trust are asked themselves, “What is going to happen if our Son/Daughter gets all of their inheritance in one lump sum?” In too many cases that money gets spent frivolously by a generation that is not used to having large sums at their disposal.

Trying to refinance their home, would have lead for it to be denied. The lending institution usually looks at your situation much differently when your income drops due to reaching a particular age. Regardless of whether social security and equity is present. Applying many times at multiple banks will more than likely be a waste of time.

#4 – The process is fast and painless. I had an evening of educating them about this product and how they could benefit from it. This family had already been through HUD Counseling (a required step). I collected a few documents and signatures on the application. The loan was closed in less than 30 days since there is no payoff to schedule.

If you have any questions or would like more information on this topic feel to contact me or click this. Also if you reside near the Santa Ana area, I host a weekly lunch presentation. Follow me on Meetup for updated events.

To get educated and to see if you qualify for a reverse mortgage

On the surface, this sounds like an easy question. Everyone wants a reverse loan with a fixed rate, right? So how do you actually know if the correct choice is the fixed rate or the adjustable rate? Which program makes the most sense for you? Here are a few facts needed to help make your decision.

1. You have a mortgage that needs to be paid off that will consume most of the funds you are going to receive from your reverse mortgage.

2. You have a remodel or repair to your home that will be expensive and uses up a lot of your equity draw.

3. Buying a vacation home, automobile or a motorhome that will use up a good portion of your equity that is available.

4. By combining the above items you may be able to total most of your available draw.

As soon as your loan closes, you have drawn the money and interest starts accruing. If you don\’t have a use for the funds received from your reverse mortgage, your are just accruing interest for no reason.

What if you decide that you don\’t want all the equity at once? You may consider the alternative and look into the reverse mortgage with rate that adjusts.

You can get more reverse mortgage information or read other articles written by David Prulhiere Like \”Pros and Cons of an Adjustable Rate Mortgage\” by visiting redwood reverse mortgage. For a limited time, get the free report titled: \”Five Essential Things to Know Before Getting a Reverse Mortgage\”.

It’s never been a better time to refinance your Florida home. With a myriad of options available and interest rates at an all time low, closing costs can be quickly recovered by lower monthly mortgage payments. If you’ve been thinking of refinancing but waiting for the right time, now is the time to act.

In this day and age, many people are refinancing to lower their expenses, withdraw additional value from their homes or even do renovations they’ve been contemplating for too long. If you have a high interest rate on your existing mortgage, you may want to take a close look at some of the current mortgage options available to you today.

One aspect of reverse mortgages that is particularly unique is that they can eliminate monthly mortgage payments. As long as you stay in your home, and pay your taxes and homeowners insurance, your loan will not be payable. This is a very attractive option for seniors who are on a limited budget.

Another important aspect of reverse mortgages is that you can never owe more than your home is worth. The non-recourse nature of these loans means that if your property value declines below the value of the home, you are not required to pay the difference. This means you don’t ever have to worry about leaving a debt to your heirs. If you die and the loan balance exceeds the value of the home, your heirs can simply satisfy the loan obligation by turning the home over to the bank. Of course, they can also choose to repay the loan or refinance it with a regular mortgage if they’d like.

Reverse mortgages have many options regarding how you receive your money as well. If you’d like to receive all of the money you’re eligible for at closing, this is a popular option for many seniors. Alternatively, you could open a line of credit that will grow as long as you leave an unused portion in the account. You could also do what is called a “tenure” option where you would receive a fixed amount over the remaining years of your life not matter how long you live. This is a great option for supplementing your retirement income.

Whether you are a senior looking for a reverse mortgage or just a homeowner looking to refinance their Florida home, there has never been a better time to explore your options. Interest rates are at an all-time low. Call your local Florida mortgage broker and find out your options today. You could end up saving yourself tens of thousands of dollars over the life of your mortgage. So go out and take advantage of this incredible option today.

Looking for more information on a reverse mortgage or mortgage lending rates? Then make sure to check out Tim Begert’s online resources.

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