Buy a new home with a reverse mortgage

June 8th, 2010

In the past, a reverse mortgage was used only to help cover expenses, make improvements or to eliminate monthly payments. But seniors can now use the equity in their current home to purchase a new one! As our series of articles on reverse mortgages continues, I'm finding this is one feature of which few are aware.

Not everyone qualifies for the Purchase transaction, but if you have been daydreaming of your dream home, contact a mortgage broker to see if you are able to use this loan to purchase your dream home. And with an adequate down payment, that dream home can be purchased without you having to pay monthly payments at all!

Briefly, with the Purchase program, you just inform your mortgage broker that you want to purchase a new home with a reverse mortgage. He or she will calculate how much you qualify to receive for this new home, just as though you already own it. The calculations take into consideration your down payment, the appraised value of the property and your age.

This is a great opportunity for those wanting to enjoy that home they always dreamed of. Talk to your mortgage broker for further guidance. And happy moving!

Good news for seniors still affected by the economy

June 1st, 2010

We're seeing a few signs of an improving economy, but many seniors are still struggling to stretch their dollars in an effort to make ends meet. To address this situation, the US Department of Housing and Urban Development has extended the loan limits for reverse mortgages through 2010 (initially, this was to expire at the end of 2009).

President Obama signed a bill, The American Recovery and Reinvestment Act (ARRA), in early 2009, which increased the Federal Housing Administration's (FHA) loan limit for the Home Equity Conversion Mortgage (HECM) from $417,000 to $625,500. The increase helped many seniors who live in higher valued homes to take advantage of the opportunity to receive more money from a FHA Reverse Mortgage than they would have been eligible for in the past.

If you are 62 or older, and think a reverse mortgage would be right for you, talk to a mortgage broker who you know and trust. We here at Grandview Lending will help you make the right choice.

Being creative with a Reverse Mortgage

May 25th, 2010

Continuing the series on Reverse Mortgages, I thought it would be beneficial to note some of the creative ways seniors are using the funds received through this special loan. Most seniors use a Reverse Mortgage to help close a gap between their retirement expenses and their retirement income.

According to NewRetirement.com, these loans can help with medical expenses and also estate and retirement planning.

Medical needs met through a Reverse Mortgage:

Funding for healthcare, medical treatment that medicare or your insurance does not cover
Funding for long-term care and/or long-term care insurance
Funding for life insurance to leave something to your heirs

Reverse Mortgages and estate planning:

The loan lowers the total value of your estate, which will lower the estate tax liability
Life insurance policies pay the benefits to your heirs, which will be in tax-free dollars, leaving your heirs a guaranteed sum, rather than the entire value of your home being at the mercy of the real estate market.

Before making any decision that will affect your retirement planning, discuss this with a trusted Reverse Mortgage Lender and also your financial advisor.

When does a reverse mortgage make sense?

May 11th, 2010

We are excited to announce that we have just landed a very competitive source of funds to furnish Reverse Mortgages. Although it is not a loan for all people over 62, it can be a very good loan for the right situation. So, when does a Reverse Mortgage make sense? This is the first of a series of articles providing information to help you understand these mortgages better.

Key facts:

Homeowners retain title and ownership to their home.
You can pay off your current mortgage and eliminate monthly payments.
The loan is not qualified on amount of income, credit, assets, employment, medical history.
Depending on age, the home should have at least 50% equity (i.e., owe $75,000 on home that is worth $150,000).
Can be used to supplement income by way of lump sum or monthly payments.
Tax-free cash advances do not affect Social Security or Medicare Benefits.
All participants attend a free education counseling session with a HUD-approved counselor to have a third party assist you with thinking through if a Reverse Mortgage is the right loan for you.
Repayment is required in one lump-sum when the property is sold or the borrower(s) no longer live in home.
You or your estate may sell your home and use the proceeds to pay off the reverse mortgage.
Your heirs may keep the home in the family and pay off the reverse mortgage from their own funds or with a new mortgage.

Would you like to learn more? Give us a call at 371-255-0062 to walk through your specific questions.

Do brokers work for the wholesale lender or the consumer?

May 4th, 2010

This is a common question. The answer is "neither."

As an independent contractor, the broker allows wholesaler lenders to cut origination costs by providing such services as preparing the borrower's loan package, loan application, funding process, and counseling the borrower. Brokers help keep loan rates low due to their minimal overhead and setup costs. Furthermore, the broker will seek the loan which best suits the borrower's financial circumstances, needs and goals. From the consumer perspective, with rare exception, the broker does not get paid unless and until the loan closes. Thus, the broker has the ultimate incentive to provide the best possible customer service to the consumer.

Today over two-thirds the nation's mortgages are originated by mortgage brokers. This clearly indicates that consumers are choosing the superior options, service, and expertise offered by mortgage brokers. Brokers have forced retail lenders to compete with other loan sources driving down costs nationwide.

The roles of the broker and the wholesale lender

April 27th, 2010

Many people think that if you have a lender, you don't need a broker. There are 2 very distinct roles each serves you, the consumer.

The wholesale lender underwrites and funds the home loan, may service the loan payments, and ensure the loans' compliance with underwriting guidelines. The broker, on the other hand, originates the loan. A detailed application process, financial and credit worthiness investigation, and extensive disclosure requirements must be completed in order for a wholesale lender to evaluate a consumer's home loan request. The broker simplifies this process for the borrower and the wholesale lender, by conducting this research, counseling consumers on their loan package choices, and enabling them to select the right loan for their home buying needs.

The mortgage loan process can be arduous, costly, and seemingly impossible to the consumer. The broker works as the liaison between the borrower and the lender to create a cost effective and efficient loan process. A process that will run like a well-oiled machine.

Tentative steps toward mortgage reform

April 20th, 2010

The Obama administration took its first, tentative steps toward reform of the nation's housing finance system on Wednesday. They had a self-established February deadline but now state they won't have a plan until next year.

According to National Mortgage News, The Treasury and Department of Housing and Urban Development compiled a list of questions to present to the public for input. The question topics include:

ways to manage episodes of market stress
market discipline
incentives to encourage the appropriate alignment of risk between the government and the private sector.
how to tackle capital market functions
mortgage origination
transitioning into a new housing finance system.

Besides presenting the questions, the administration will also hold public form meetings across the US.

Republicans accused the Obama administration of stalling. Rep Spencer Bachus of Alabama, the panel's highest-ranking Republican, said, "We don't need polls, we need leadership. What is abundantly clear is that the Obama administration has no real plan for dealing with housing finance.

Democrats have rejected attempts by Republicans to unwind Fannie and Freddie before a new strategy is in place. "We agree this system needs to be changed, but simply ending Fannie and Freddie with no ideas of a replacement would do damage in a time of economic difficulty," responded committee chairman Barney Frank. He said he will start working on this "very soon."

Stay tuned...

Why choose a mortgage broker?

April 13th, 2010

There are questions often asked about the mortgage industry, such as, "Just what is a mortgage broker?" and "Who are mortgage brokers?" Education is one of Grandview Lending's missions, and trust this information has been helpful to our readers.

Today we're addressing another frequent question: "Why choose a mortgage broker?" We here at Grandview Lending believe that education is key to choosing the right type of loan, and also the right loan provider.

Over 60% of Americans use the services of a mortgage broker, who provide choice, convenience and expertise. You'll receive an expert mentor through the complex mortgage lending process. The broker offers the consumer extensive choices and access to affordable home loans while balancing the consumer's financial interests and goals.

Our focus is to help you achieve the “American Dream” through proper financing of your home purchase or refinance. Why? and how? you ask.

We have a vested interest in satisfying your needs.
We will select the best lender from our many sources to provide you with a loan that meets your individual needs.
We have extensive knowledge of the many loan programs available and will take the time to fit your needs to the best loan.
There is a loan for everyone, and we know how to find it.
Because interest rates change daily, we can obtain a locked rate to insure that the rate being offered is available to you at the closing.
We are motivated to keep the processing time to a minimum to satisfy you with timely performance.
Our position in the mortgage industry gives us a competitive edge allowing us to provide you with a loan that will benefit you the most with the lowest costs.

As your personal Mortgage Broker, we are happy to work with you to find the best loan for you and your home.

Who are mortgage brokers?

April 6th, 2010

A blog post, "Just what is a mortgage broker?" was written because one of Grandview Lending's corporate goals is to provide education about the mortgage industry. It's important to know what a mortgage broker is. Likewise, it's equally important to know who a mortgage broker is.

Finding a mortgage loan for your home can be a confusing experience. With so many options to choose from, it can be difficult to find your way. Whether you've been down this path before, or it's your first journey to home ownership, having a guide to lead you there will make the process much smoother.

So, here is a list of who mortgage brokers are:

Full time residential real estate professionals.
Experts at working through the mortgage lending process to save you time.
Your representative to many lenders.
Providers of loans that comply with industry standards and requirements.
Specialists with competitive up-to-date loan rates.
Resources of knowledge on current trends and terms in the industry.

Working with a reputable mortgage broker will bring a sense of comfort because your purchase is in the hands of a trusted professional who has your best interest in mind.

It's running amok

March 30th, 2010

I read an article by Mark Fogarty in the newsletter National Mortgage News that shows just one more reason to work with a mortgage broker you know and trust - you'll prevent being a victim of mortgage fraud. Fogarty relays information he received from Michael Costanzi, supervisory senior special agent for the Federal Bureau of Investigation, presented at the recent Regional Conference of Mortgage Bankers Associations in Atlantic City.

He spoke specifics abaout New Jersey, but fraud is happening throughout the US. Scams include builder buyouts, property flipping, identity theft, short sale fraud, appraisal fraud, equity skimming and foreclosure bailouts. Foreclosure bailout frauds work like this: a borrower in danger of foreclosure is offered $5,000 for a quitclaim, and the fraudster offers to carry the borrower for a few months while he gets back on his feet and can resume making payments. At that time, he will supposedly will sell the house back. However, he doesn't. The borrower has just sold his house for just $5,000.

Prevent being a fraud victim. When you're ready to purchase a home or refinance, visit mortgage brokers' websites, ask for referrals, and interview a few before making your decision. "Buyer Beware" is certainly a caution that must be heeded, especially in these difficult times.