12
Jun
By First Rate Financial Group
Mortgage

What Is A Reverse Mortgage?

What Is A Reverse MortgageA reverse mortgage is a way to use the equity value that built up in a home to improve the quality of life for those who have appropriate circumstances when they reach the retirement age of 62 or older. With a reverse mortgage, a person continues to live in their own home and retains the title to it but does not have to make any monthly reverse mortgage payments.

A reverse mortgage may be helpful; however, not everyone qualifies for one. The benefits come with disadvantages as well. Here is a list of the advantages and the disadvantages for reverse mortgages.

Be sure to discuss this option with a qualified professional when thinking about a reverse mortgage before making any commitment.

Reverse Mortgage Advantages

  • Reverse mortgage funds may be used to pay off an existing home loan balance. The funds may be taken out in a lump sum or paid in monthly installments for a certain period.
  • The reverse mortgage creates a lien on the home but does not require any monthly loan principal or interest payments. This continues as long as the person lives in the home and takes care of it (paying the property taxes, home insurance, HOA fees, etc.)
  • Usually, a reverse mortgage has no effect on social security payments or Medicare benefits. It does not usually cause any tax consequences because it is a loan structure, not income.
  • If repayment of the loan happens at some point, any equity remaining is still available to the homeowner for any purpose, such as giving something to heirs.
  • It is a non-recourse obligation. There is no personal liability to repay the reverse mortgage loan if the equity value in the home is not sufficient to pay it off.

Reverse Mortgage Considerations

  • Since a reverse mortgage has no payments, the loan balance increases and the interest accumulates over time.
  • A reverse mortgage reduces the equity in the home that would otherwise be available to heirs. If the remaining equity exceeds the loan, the home can be sold off to repay the loan and the balance can then go to the heirs.
  • Medicaid eligibility or disability payments (SSI) may be affected.
  • A reverse mortgage loan becomes immediately due if certain things happen, such as the death of the homeowner, the homeowner vacates the house for six months or more for a non-medial reason and 12 months or more for a medical reason. It becomes due if the home is no longer the principal residence of the reverse mortgage borrower.
  • The loan is immediately due if the homeowner does not pay the property taxes, home insurance premiums, HOA fees, and other things necessary to maintain the home.

Summary

A reverse mortgage is a special financial tool that needs to be used only when appropriate. Typical rates for these loans may be higher than standard home equity lines of credit and other traditional home-refinancing options. Consider all the details very carefully before and as always, consult with your trusted home finance professional to get the best advice for your unique situation.

11
Jun
By First Rate Financial Group
Real Estate

7 New Home Upgrades that Could Save Your Life

7 New Home Upgrades that Could Save Your LifeOne of the best things about moving into a new home is personalizing it and really making it yours. From hanging wall art to arranging furniture to finding the perfect spot for your grandmother’s hand crocheted afghan, it’s a real joy to decorate.

But are you forgetting about the big investment you just made? Consider the following important home upgrades that will protect your home and your family.

1. Smoke Alarm

Take an afternoon and upgrade all your new home’s smoke alarms. Smoke alarms save lives and it’s not worth it to assume that just because it’s there it’s working. 

2. Carbon Monoxide Alarm

Do the same upgrade with your carbon monoxide alarm. If your new home doesn’t yet have one, go ahead and pick up the latest model. Even if your home has all electric appliances, it’s worth it to have this added protection.

3. Trim Bushes

It’s lovely to have a home that’s nestled behind evergreens, but you should know that this gives intruders easy cover around the perimeter of your home. Trim bushes so they are no more than four feet high so intruders have nowhere to hide.

4. Outdoor Lighting

Outdoor lighting adds to the curb appeal of your home and also deters intruders. Install solar lighting to highlight attractive areas and motion sensor lighting around windows and doors. 

5. Security System

Consider enrolling in a security alarm system for your new home. Several companies offer this option. These systems come with cameras that you can have in/or around your home. The mere presence of cameras is often enough to ward off unwanted persons. 

6. Fire Extinguishers

Stock every room with a fire extinguisher. Many times people only put these in the kitchen, but a candle or electrical fire can break out anywhere, including the garage. This isn’t technically an upgrade, but this could save your live and your property.

7. Door Alarm

If you have children, consider installing a door alarm on your sliding patio doors. This is especially helpful if you have a backyard swimming pool. A door alarm can be picked up at the local hardware store and installed within minutes if you’re even a little bit handy.

These seven tips will help to ensure that both you and your home are well-protected. After this, you can get back to decorating comforted by the knowledge that you’ve taken care of the important points first.

Another way to protect your family is to be sure that you have the best financing options available by staying in contact with your trusted home mortgage professional.

 

10
Jun
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – June 10th, 2019

What’s Ahead For Mortgage Rates This Week – June 10th, 2019Last week’s economic releases included readings on construction spending, public and private sector jobs and national unemployment. Weekly reports on mortgage rates and first-time unemployment claims were also released.

Construction Spending Little Changed in April

Census Bureau readings for April showed a minor dip in construction spending as compared to revised figures for March. $1,295.5 billion was spent on a seasonally-adjusted annual basis and missed the expected reading of $1,314.7 billion.

March construction spending was revised to $1,299.2 billion. Falling mortgage rates were good news for home buyers, but concerns over global economic disputes and higher materials prices concerned home builders.

Mortgage Rates Fall as Initial Jobless Claims Hold Steady

Freddie Mac reported lower average mortgage rates across the board. 30-year fixed mortgage rates dropped 17 basis points to 3.82 percent; the average rate for 15-year fixed rate mortgages fell 18 basis points to 3.28 percent and the average rate for 5/1 adjustable rate mortgages fell eight basis points to 3.22 percent. Discount points averaged 0.50 percent for fixed rate mortgages and 0.40 percent for 5/1 adjustable rate mortgages.

Initial jobless claims were unchanged with 218,000 first-time claims filed.  Monthly labor reports issued for May showed sharply lower jobs growth for public and private sector jobs.

Public and Private Sector Jobs Growth Dips in May

In a potential warning of slowing economic growth, public and private sector job creation fell far short of expected readings in May. The Labor Department’s Non-Farm Payrolls report showed 75,000 new jobs in May as compared to expectations of 180,000 new jobs and April’s reading of 224,000 public and private sector jobs created.

ADP’s report for private sector jobs growth was equally dismal for May; 27,000 jobs were created as compared to April’s revised reading of 271,000 private sector jobs created. Mark Zandi, who developed ADP jobs reporting, said “The economy is weakening; growth is slowing and slowing sharply.” The national unemployment rate was unchanged at 3.60 percent, which matched expectations. Analysts said that signs of slower economic growth could lead the Federal Reserve to implement monetary easing. 

What‘s Ahead

This week’s scheduled economic news includes readings on inflation, retail sales and consumer sentiment. Weekly reports on mortgage rates and new jobless claims will also be released.