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The ups and downs of the decade

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Most of us have experienced the effects of the current economy or at least know someone who has. But the National Mortgage News has some great statistics that I’d like to share with you. Owning a home is the American Dream, and you’ll be happy to learn that your investment has been a wise one.
According to the National Association of Realtors, existing home prices increased by 25% from 1999 – 2009. The latest forecast by NAR economists shows that the median house price will rise 3.6% in 2010. Existing home sales are predicted to rise 10.8% this year.

Though it was certainly a decade of ups and downs, 2010 is starting out on a very positive note. Whether you’re looking to move or remain in your current home, the economic forecast indicates that owning a home is still a good, solid investment. While the interest rates remain extremely low, now is a good time to have a discussion with areputable mortgage company. They will help you put the pieces of your financial puzzle together.

The 3 big IFs

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My last post discussed the advantages of a reverse mortgage. As with most things in life, there are also some disadvantages. Consider these 3 “ifs” before making a decision:

If you are eligible for low income assistance or will be soon, be sure that your income from the loan doesn’t disqualify your from receiving Social Security, Medicare or other similar State or Federal programs.

If you are planning to move soon, your home will no longer be your primary residence. This is a requirement for a reverse mortgage. Therefore, since closing costs are typically higher than for other loans, this will most likely not be the best short-term loan.

If you are unsure about reducing your home equity, you might want to discuss this with your heirs. Many people want to leave their home to their heirs, and a reverse mortgage decreases your home equity. This, in turn, reduces the value of your estate. However, even with this loan against your home, you can still will your home to whomever you choose. They will have the choice of whether to keep the home or sell it.

Now that you hve the pros and cons, you will be able to consider this option with more clarity and understanding. Feel free to contact us with your questions. Our Reverse Mortgage Specialist can discuss your specific situation and assist you.

The top 5 advantages of a reverse mortgage

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You’ve worked hard your entire life, and now you’re thinking about retirement – or might already be retired. Seniors often face a need for additional cash flow that is greater than their pensions or 401(k) plans. Some worked hard their entire life, and now want to play just as hard. Some are facing high medical costs, or the need to purchase additional health and long-term care insurance. Where do you turn to serve any – or all – of these scenarios? Many are finding that the equity in their homes is a means to finance their needs.

The five main advantages of a reverse mortgage are:

  1. Extreme Flexibility: There are few, if any, restrictions on how and where you spend the money you received from your loan. You can purchase long term care insurance, help pay for grandchildrens’ college or even travel – it’s your money, and your choice.
  2. Easy Prequalification: You don’t have to fall within a specific income range to qualify for a reverse mortgage.
  3. No Downside: You will never owe more than the value of your home at the time the loan is repaid – even if the mortgage lender paid you more than that. This means that if your home declines in value, you will not owe more than what it is worth.
  4. Home Ownership: You live in your home for as long as you want; you are guaranteed a place to live.
  5. Federally Insured: The Home Equity Conversion Mortgages (HECM) is managed by the Department of Housing and Urban Affairs and is federally insured. This means that if your lender defaults, you won’t be affected and will continue to receive your payments.

Our next post will cover the disadvantages that come with a reverse mortgage. Then you’ll be more prepared to discuss this loan option for yourself, or to provide this information to your adult parents. Grandview Lending has a Reverse Mortgage Specialist ready to help you with this decision.