Using Reverse Mortgage for your Next Purchase

There are several regulations implemented by the federal government in order to provide financial support to those who wish to acquire their own homes. One of the most prominent is the reverse mortgage which aims to help the senior members of the society. In order to take advantage of the benefits featured by reverse mortgage for your next purchase, you need to know basic and fundamental information about this type of home mortgage.

What is reverse mortgage?

In the previous years, seniors find it hard to avail and use their home equity for the many years they have complied with their mortgage payments. With reverse mortgage, a special home loan type that enables you to convert your home equity into cash, qualified applicants can now benefit from their home equity without the usual payment requirements needed in conventional home equity loans. The benefit for this mortgage as its name implies grant cash payment for eligible borrowers instead of them complying with the monthly payment due.

How does it work?

Reverse mortgage grants borrowers the monetary support they can get out of their home equity. They have different choices for the payment they will receive which are in forms of lump sum or fixed monthly payment. No payment is obligatory as long as the borrower stays in the purchased home and makes it their primary residence. Those who opt to leave the property permanently will have to comply with the financial obligation and fees incurred for the purchase of the said property.

You can actually use your reverse mortgage payment for other financial expenditures you need to pay such as your daily expenses for your basic commodities, education and travel expenses, care insurance, medical and prescription drug bills, finances for home improvements and remodeling projects and any other needs the borrower have.

Who qualifies for reverse mortgage?

Seniors who are 62 years old and even older are eligible for the reverse mortgage incentive. As the borrowers are the ones to receive payment instead of them having monthly obligations, there are definitely no asset or credit requirements as well as income requirements needed for submission during their application. The types of home they can purchase using reverse mortgage also varies depending on the borrower’s preference and lifestyle. You can choose to acquire the conventional single-detached residence, single unit in a multi-unit building or a condominium type of residence, manufactured homes like townhouses and the like. It is imperative that the borrower or home owner stays in the house and make it his primary residence and not for any other purposes like for vacation and rentals.

Countless assistance in terms of finances are offered by the federal government which more and more home owners are entitled to avail. With reverse mortgage loan, seniors who have retired from their employment are given the chance to enjoy the fruits of their labor and still make productive investments with their money. Finding the right resources and understanding the mechanics of reverse mortgage is sure to provide opportunities for them especially in their next purchase in the real estate industry.

Source: Article base

Money Saving Tip: Deals and Steals

Low on cash? In today’s tough times, the phrase “every penny counts” makes more sense now then ever before. So for those who need ideas on how to save money, I’ve got one word for you: bartering.

For those who don’t know what bartering is, it’s a system in which goods or services are directly exchanged for other goods or services without a common exchange unit. This means that no money is involved.

Although the use of commercial bartering hasn’t been widely used as a medium since the 1800s, its purpose does have its advantages.

Say for example you know someone who’s good at fixing cars and also has kids who need looking after. And let’s say your car needs some repairs and it just so happens you’re good with kids. This would be a perfect scenario in which bartering would work well for both of you: they get childcare, your car runs again. You’re not losing any actual money-you’re just capitalizing on your own talent.

No matter who you are, you must be good at something, so why not put that ability to good use?

Some people have been known to have something called barter-parties where a group of people do favors for each other without ever exchanging money. Things get done and no one goes broke.

One time, I got a bunch of free homemade cookies at UC Berkeley by standing out in front of a club table and spending some time handing out flyers advertising their upcoming events. Admittedly, it does sound somewhat silly and unorthodox, but I didn’t have to pay anything for a bunch of tasty cookies!

So just imagine instead of paying for something, you can just work it off or do someone a favor. Sounds pretty sweet and you never know what kind of benefits you may come across until you try.


Neighborworks Gets Grant For Reverse Mortgage Mortgage Education Product

NeighborWorks America announced that it received $4,860,802 in funding from the U.S. Department of Housing and Urban Development to help support training and certification opportunities for thousands of counselors from HUD-approved nonprofit counseling agencies.

“The grants announced by Secretary Donovan provide tremendous support for the critical housing counseling and training activities being carried out by NeighborWorks America and our affiliated NeighborWorks organizations across the country,” said Jayna Bower, director of the NeighborWorks Center Homeownership Education and Counseling (NCHEC).

NCHEC and the NeighborWorks Training Institute will use $3,240,301 of the grants to provide nationally-recognized training and certification to thousands of counselors and plans to award over 1,300 training scholarships to counselors throughout the year.

The grant also includes funding to support NCHEC in providing reverse mortgage counseling administration services nationwide, including comprehensive training, HECM Certification Exam oversight, online courses and other Web resources.

“We thank HUD and Secretary Donovan for this immense support,” said Bower. “Our ability to equip counselors around the country with the critical knowledge and skills they need to help more families understand the increasingly complicated sustainable homeownership process is greatly enhanced. ”

Earlier this year, NeighborWorks took over administering the Reverse Mortgage Education Project from AARP after it elected to focus its efforts on consumer education.

Source: Reverse Mortgage Daily

Be Skeptical of Unsolicited Mailings about Reverse Mortgages

So you’ve been thinking about getting a reverse mortgage and open up your mail or email one day to find an offer from a reverse mortgage lender. The offer says you can get a lot of money if you sign the card and send your name, phone number, and age. Likewise, phone solicitations may pressure you to give out personal information on the spot. Should you pursue these offers?

Reverse Mortgage Scams

Unless you specifically requested information from a reverse mortgage lender, you are better off ignoring these offers if you aren’t sure who is sending them to you. Also, never reveal any personal information such as your social security number to companies that you know nothing about because it could be a scam.

Some reverse loan offers may come from companies with names that sound similar to legitimate companies, according to an article at AARP. Other mailings may be set up to confuse you into thinking they come from a government agency. There also are mailings designed to collect your personal information so it can be sold to various vendors of reverse mortgages.

Be skeptical of companies that claim you can get “free government money” or offer deals that sound too good to be true. Even if you want to apply for a reverse home mortgage, don’t rush into anything without first investigating any company you plan to do business with.

Compare Reverse Mortgage Lenders

Shopping for a reverse loan doesn’t have to be stressful. Get free reverse mortgage quotes from our trusted network of lenders. Take time to talk with a reverse mortgage counselor to learn more about how a one of these loans might help your situation. Put together a list of any reverse mortgage questions you have before your counseling session.

Source: Best Reverse Mortgage

House votes to expand homebuyer tax credit

WASHINGTON – Buying a home is about to get cheaper for a whole new crop of homebuyers — $6,500 cheaper.

First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the House voted 403-12 Thursday to extend and expand the tax credit to include many buyers who already own homes. The Senate approved the measure Wednesday, and the White House said President Barack Obama would sign it Friday.

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who hasn’t owned a home in the last three years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.

“This is probably the last extension,” said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.

The homebuyers tax credit is one of two tax breaks totaling more than $21 billion that was included in a bill extending unemployment benefits for those without a job for more than a year. The other would let companies now losing money recoup taxes they paid on profits earned in the previous five years.

“We are still in a world of economic hurt, and Congress must continue to act boldly and creatively,” said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. “With the right mix of tax breaks and investments we will get through this recession and get folks working again.”

The real estate industry has been pushing to extend and expand the housing tax credit. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

Extending and expanding the tax credit for homebuyers is projected to cost the government about $10.8 billion in lost taxes. While the measure passed the Senate by a 98-0 vote, Sen. Kit Bond, R-Mo., questioned its efficiency in stimulating home sales.

“For the vast majority of cases, the homebuyer tax credit amounted to a free gift since it did not affect their decision to purchase a home,” Bond said. “And for the small minority of buyers whose decision was directly caused by the credit, this raises the question of whether we are subsidizing buyers who may not have been able to afford buying a home in the first place.”

The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.

Expanding the tax credit for money-losing companies is projected to cost $10.4 billion.

The business tax break would allow money-losing companies to use current losses to offset taxable profits earned in the previous five years, giving them refunds of taxes paid in those years. Under current law, businesses with annual gross receipts of more than $15 million can claim losses back only two years.

The tax break would help industries suffering losses in 2008 or 2009, including retailers, homebuilders and newspapers. Congress included a scaled-back version of the tax break — for companies with revenues of $15 million or less — in the economic recovery package enacted in February. The new tax break would be available to companies of any size, providing a quick source of cash.

The U.S Chamber of Commerce has been a big backer of the tax break for money-losing companies.

“It frees up capital that they can use to maintain jobs and potentially even hire new people as the economy returns,” said Caroline Harris, senior tax counsel for the U.S. Chamber of Commerce.

The tax breaks would be paid for largely by delaying a tax break for multinational companies that pay foreign taxes. It was passed in 2004 and originally was to have taken effect this year, but would now be delayed until 2018.

Source: Yahoo News

Foreclosures Have Met Their Match

Foreclosure filings were reported on 2.3 million U.S. properties in 2008, an increase of 81 percent from 2007 and up 225 percent from 2006, according to the RealtyTrac U.S. Foreclosure Market Report released January 15, 2009. The soaring number of forclosures have sent ripples through the housing and banking industry with the affects being felt by millions.

According to RealtyTrac, California, Florida, Arizona posted the highest 2008 foreclosure totals. A total of 523,624 California properties received a foreclosure filing in 2008, the nation’s highest state total. Foreclosure activity in the state increased nearly 110 percent from 2007 and nearly 498 percent from 2006. With 385,309 properties receiving a foreclosure filing in 2008, Florida documented the second highest state total. Florida foreclosure activity increased 133 percent from 2007 and nearly 412 percent from 2006. Arizona’s 2008 total of 116,911 properties receiving a foreclosure filing was third highest among the states. Foreclosure activity in Arizona increased 203 percent from 2007 and 655 percent from 2006. Other states with Top 10 totals for 2008 were Ohio, Michigan, Illinois, Texas, Georgia, Nevada and New Jersey.

With mounting job losses and a weakening economy, forclosures and mortgage delinquencies are expected to continue to rise. The nation’s unemployment rate shot up at the end of the year, reaching 7.2 percent in December its highest level since early 1993, according to a Labor Department report release January 9, 2009. That puts U.S. job losses at 2.6 million for 2008.

However, with all this doom and gloom in the housing market, there is a glimmer of hope for senior homeowners 62 years of age and older. That hope comes in the form of a HUD Home Equity Conversion Mortgage (HECM) or Reverse Mortgage. Those who have obtained a reverse mortgage need not be concerned with the increasing forclosure rates and whether or not they can make their mortgage payments. With a HECM reverse mortgage, there are no monthly payments required.

Borrowers remain in their homes for life and never have to worry about making a mortgage payment again. All they need to do is keep the property in good repair, pay their property taxes and keep their homeowners insurance current and paid.

For seniors who currently do not have a reverse mortgage, now may be the time to explore the option. It does not matter if a senior is currently late on their mortgage. They may still qualify for a reverse mortgage. To qualify all borrowers on title must be 62 years or older, occupy the property as their primary residence and not currently be in a bankruptcy. That’s it!

MLS Reverse Mortgage has helped save several seniors who were months away from losing their homes.Â

So, in these tough economic times, there is still hope for seniors looking for mortgage payment relief or cash out to enjoy life’s pleasures.