7 Reverse mortgage tips you shouldn’t ignore
March 10, 2010
When you wish to cash out equity in your home without having to pay anything on a monthly basis, a reverse mortgage is what you should choose. Reverse mortgages are primarily meant for
seniors aged 62 and above. Whether you wish to supplement retirement and social security income, pay for healthcare or home improvements, reverse mortgages can provide you with tax free cash flow in lump sum amount or through monthly installments. Given below are 7 helpful tips for those willing to avail reverse mortgages.
1. Ask questions: When you approach a lender for a reverse home loan, ask him questions such that you understand the terms and conditions of the mortgage clearly. Accept the loan offer only when you’re clear about how it works and whether it can serve our purpose.
2. It’s worth waiting till you’re older: The older you are, the higher can be the loan amount you may qualify for.
3. How to get the funds: There are different ways to receive funds in a reverse mortgage. You need to understand whether you want equal monthly payments, lump sum cash, a line of credit or a combination of monthly checks and line of credit.
4. Know your liabilities: When you take out a reverse mortgage on your home, you need to keep paying the property taxes, home insurance premiums and maintenance costs. Your loan may become due if you don’t fulfill these responsibilities.
5. Beware of scams: Mortgage scams are quite common these days. The scammers target senior homeowners and offer to help them in finding a reverse mortgage lender in exchange for a fee. This fee is a small percentage of the loan amount available to the senior homeowner. It’s better to avoid getting into such deals as you don’t know what you may end up with. The best thing is to contact a HUD approved reverse
mortgage counselor in order to check out your eligibility and explore options you may consider.
6. Consider the loan costs: The costs of taking out the loan are quite high. You can pay a part of the costs in cash while the rest can be added to the loan amount. So, what you need to do is, compare the costs on different loan programs before you choose the one that suits you.
7. Find if you’ll qualify for Medicaid: Reverse mortgage may affect your eligibility to qualify for public benefits such as Social Security benefits and Medicaid. No doubt, reverse mortgage is a good option to generate cash flow from the equity in your home. But you need to make sure that you’re well aware of how it works and how best it can help you.
Mortgage Tips – The Tax Deductible Mortgage Strategy
March 7, 2010
If you are interested in
- Paying down your mortgage faster (taux hypoth?caire)
- Reducing taxes
- Preparing for retirement
And who wouldn’t be? Read on.
Through the use of a specialized mortgage strategy called the Smith Maneuver, you can achieve all of these goals. And you can do them all together! – taux hypoth?caire
The strategy is named for a British Colombia financial planner, Fraser Smith. He developed this interesting home loan strategy a few years ago (see the press release). I had the good fortune to hear Fraser give a speech about it at a recent conference in Toronto, where I was one of three mortgage consultants from Quebec.
This strategy, formed for a mortgage product that can expressly use it, allows the mortgage holder to make an investment or pay business expenses and, over time, achieve a tax benefit from the related interest expenses. There are a number of ways in which this works, but if it is approached in the right manner, you can limit your risk while increasing how efficiently the strategy works for you. There are many parts to this strategy, so it is best that you phone and discuss your individual circumstances and how they can be addressed using this strategy. We work with financial planners who can analyze your financial needs and put the right package together for you – taux hypoth?caire.
Advantages
? Pay down your mortgage faster
? Reap tax savings
? Save for retirement
? Best for high income people
? Best for self-employed, but can be utilized for salaried employees as well
? Has been approved by tax lawyers, accountants and financial planners
? You can begin the strategy any time, but the sooner the better
? It can be set up on an automated program
? There are no additional fees to be paid
Disadvantages
? It is best for those with a mortgage that is 75% of the value of their home
? The strategy requires that the borrower can increase his payments by 2% per annum
? If the investment component is used (mandatory in the case of a salaried employee), there is always the risk associated with the investment
? In order to lower the risks associated with the investment, this strategy should be used over the longest possible period (10 to 15 years or more)
? It requires a good understanding of certain principles of investment, or the assistance of a financial planner
How to use this strategy for the long term
There are many ways to work with this strategy, applying it to each situation, each type of home loan and each status of employment. The higher your taxes are, the better the strategy works. You can use this strategy in combination with other mortgage strategies depending on your own needs – taux hypoth?caire.
What is our conclusion?
Thanks to the work of Fraser Smith, we now have help in addressing three important questions that concern many of us:
- Is there a way to pay down my mortgage more quickly?
- How can I reduce my taxes? – taux hypoth?caire
- Are there ways that I can accumulate additional funds for retirement?
This is a wonderful idea, but there are many was the Smith Maneuver can be used, differing from case to case. Your best bet would be to contact us and learnthe way that would work best for you.
Debt Consolidation Program – is There Real Benefits
March 6, 2010
With the many different kinds of debt consolidation companies offering various debt consolidation programs that are intended to eliminate debt, people realize that these modern times, they are presented with these many options to relieve them of their debt than when the situation was in the earlier? days.
There are many means by which you can obtain free information and channel that will help in debt reduction. The Internet is one of the more common and even popular ways by which you can get sound debt relief advices and professional help on what steps to take on once you find yourself trapped in great debt.
And if you are able to carefully plan you’re every move towards debt relief, then it is possible that stress-free, debt-free days are just around the corner. It is so unlike in the early days when you are unable to pay your monthly installments, your only solution that you can think of is to declare bankruptcy. It seems people saddled with so much debt have very little option then. Now it is not the same anymore as even for those with huge and seemingly debilitating debt burden has debt consolidation program to count on.
Advantages of Debt Consolidation Program
A sound debt consolidation program offers you numerous financial advantages over bankruptcy. You must realize that even if your debt woes seem endless, declaring bankrupt will not be the right solution to your problem as it proves to be just a temporary answer.
You will find yourself having obligations to pay up certain types of debts such as state taxes even when you have declared bankruptcy. It is the exact opposite of debt consolidation program as with this type of program, you are able to enjoy permanent relief. More so, if you decide on getting debt consolidation, you are sure to be able to minimize all your debts to about 50 to 60 percent. Clearly this means an efficient debt consolidation program can help you cut all your debt on half.
Debt Consolidation Program and Your Lifestyle
Another important benefit of debt consolidation program is that it gives you the chance to continue living and enjoying the kind of lifestyle that you are used to; there is no need for you to make any major drastic changes in the way you live. The only change you have to contend with is the ability to easily pay back all your existing debts to your lenders in very light monthly payments.
If you are very carefully in choosing the right debt consolidation program for you, it will certainly create a stress-free atmosphere of good credit that you can enjoy, with all your lenders and associates happy for your actions and appreciating all your efforts to make better your financial situation.
The most important of getting a debt consolidation program to the elimination of debt which in turn allows you to enjoy full freedom from your lenders. How? You turn over all the debt responsibility to your debt consolidation company as the latter now deals with the creditors, performing the payment responsibility that you once were burdened with. With debt consolidation, you now have a stress free life, no more harassment on the phone and mails. With this type of loan, you can actually witness all your financial woes disappear away.
Mortgage Tips for the First Time Home Buyer
March 5, 2010
Buying your first home? Not sure what the difference is between a variable rate and a fixed rate mortgage? Do you understand the true cost of borrowing? Keep reading for 7 invaluable mortgage tips that are critical for any first time home buyer.
1. The bigger the down payment, the better.
The lower your down payment, the more you’re going to pay on a monthly basis. With a 5 percent down payment, for example, you’ll be expected to pay for mortgage insurance and will most likely be subject to higher interest rates. Most lenders like to see a down payment of at least 10-20 percent.
If there is any way you can squeeze that 20 percent down payment during the purchase process, you can literally save yourself tens of thousands of dollars over the life of the loan.
2. Good credit will save you money.
Lenders base your interest rate and your subsequent cost of borrowing heavily on your credit rating. If your credit is poor, you may be advised to wait a few years while you build your credit back up. The amount you save with a lower interest rate after rebuilding your credit could be tens of thousands of dollars over the life of the loan.
3. Remember the closing costs.
Every mortgage has hidden costs associated with it, from legal fees to home inspections to bank’s closing costs. Before you commit to any mortgage, remember to ask about all the closing costs. You don’t want a $5000 surprise on closing day.
4. Get pre-approved.
While pre-approval can sometimes be more difficult, you can also save yourself a lot of unnecessary headaches. Essentially, you apply to the bank for a potential mortgage up to a certain amount. From there, you have a clear idea of your budget as you search for houses, and you can consequently make an offer that won’t be dependent on potential financing.
Additionally, when a home seller knows that you are already pre-approved to borrow for the amount of their home, this lets him or her know that you are a more serious buyer and could gain you a few concessions during the negotiating.
5. Investigate FHA loans.
The Federal Housing Administration (FHA) offers free loan insurance to qualified buyers with a minimum 3 percent down payment. This insurance means you can get a better rate from lenders without having to pay for outside mortgage insurance. Typically, the FHA sets maximum limits that depend on your county and region, but are based on the median house price for that area.
6. Budget for home insurance and property taxes.
No lender will mortgage a home that has tax liens on it or isn’t properly insured. When laying out your home ownership budget, always remember to calculate the monthly cost for county property taxes and home insurance. Whether the lender collects amounts from you monthly to cover these fees or you pay them directly each year, these are inescapable expenses that must be accounted for in your budget.
7. Choose a reputable lender.
Don’t just accept the first mortgage offer you receive. Instead, look for a lender that’s stable, reputable and able to offer you quality customer service. A lending institution is one you will likely be dealing with for 30 years, so finding one with a stable history and good reputation should be a high priority.
Best Real Estate Financing And Home Mortgage Tips You Can Use Now
March 4, 2010
It’s important to know when looking for real estate financing that the advertised mortgage rates are not always what you’ll get from the lender. The change in rates can be due to market fluctuations, economic news and any other of a dozen reasons. Interest rates can change throughout the day. With adjustable rate mortgages the initial interest rate is usually lower than a fixed-rate mortgage and the monthly payment is also lower. An adjustable rate mortgage may or may not be a good choice because on the average, most people move or refinance within seven years.
Check to see if the property taxes are deductible. Talk with your CPA or other tax advisor for current tax information. The 30-year loan is your best choice if you’re looking for a long-term stable loan; for instance, if you’re planning to stay in your house for a long time. It’s usually the safest home mortgage you can get also. If you’re buying a second home or second property, you’ll need to identify the sources for your down payment, since you will not be selling your current house and using the proceeds to buy the home. You’ll need to expect a larger monthly payment for housing or other expenses too.
The disadvantages of fixed-rate mortgage include higher cost; they are usually priced higher than an adjustable-rate mortgage. The real estate financing situation for each buyer is different. Check with your CPA or accountant, you may be able to deduct the interest you pay on the mortgage loan and some of the financing costs of the home, such as points on your income tax return.
If you’re working with a builder within a sub-division or housing development and just making carpeting, lighting and appliance selections for a brand new home, you’ll probably be able to get a standard home mortgage loan; but if you’re hiring contractors, electricians, plumbers, and painters, you’ll probably need a construction loan, which provides funds to pay the subcontractors as the work goes along. Make sure to get an estimate of your real estate financing closing costs from the lender you’ve chosen. By current law, the lender is required to provide a statement to you within three days of receiving your loan application. And there are many options for those who have a few bad credit marks on their credit report.
If you’re having a problem getting a home loan or home mortgage, why not consider a lease-option on a property. A lease-option on the real property will allow you to set a good purchase price now, and then you apply a portion of the rent each month toward your down payment, building equity in the process. 30-year fixed-rate mortgages offer consistent monthly payments for the 30 years you have the home mortgage. And if the market is good, you can benefit from locking in a lower rate for the full term of the loan. If you don’t get approval a mortgage application can be resubmitted several times; it’s not uncommon for this to happen.
Now if you’re on a fixed income, an adjustable rate mortgage, especially a short-term ARM, may not be your best choice. The advantages of a fixed-rate mortgage include a stable interest rate, consistent principal and interest payments making this loan stable. The rate won’t change; a good choice if you’re likely to stay in the house for many years.
Keep in mind that low credit scores don’t mean you cannot buy a home or other real property. Continue to explore all the options and you’ll come up with the best real estate financing. Work with a reputable mortgage broker or lender to create a customized loan program with the best combination of rates, points, and closing costs to meet your needs.
Most importantly you have to be careful not to assume that you can cut back on your expenses and stretch yourself into a house payment. You don’t want to be cutting into healthy eating habits by eating fast food, for a house that you may not be well enough to live in for a long time. Make sure you know what you can afford to spend each month on a house payment when you start searching for the best real estate financing.