Home : Finance : 4 Basic Questions Answered About Reverse Mortgages

4 basic questions answered about reverse mortgages

A reverse mortgage is a loan that allows individuals older than 62 to improve their financial well-being. They can convert part of their home equity into lump sum cash, fixed monthly payments, or line of credit, according to their preference. The money can be used to pay for medical bills, in emergencies, or to pay off a mortgage.

4 basic questions answered about reverse mortgages
Here’s what you should know about reverse mortgages in case you’re looking for one.

How much can you borrow?
For reverse mortgages, the loan amount can’t exceed the value of the property against which it is borrowed. Federal regulations require lenders to ensure that the loan amount doesn’t exceed the value of the house by structuring the transactions accordingly. Additionally, these regulations state that the owner/borrower is not liable to pay off the balance amount in case it exceeds the property value.

How are reverse mortgages paid for?
A reverse mortgage is payable when the borrower sells the house, relocates permanently, or dies. Unlike forward mortgages, reverse mortgages don’t need the borrower to make any monthly payments. They are only liable to pay interest on the money received, which is rolled back into the loan balance. While the owner gets to keep the title to the home, their home equity reduces over the loan tenure.

Who can take a reverse mortgage?
This type of loan is ideal for seniors and retirees whose net worth comes mostly from the value of their home. Seniors who don’t qualify for a home equity loan or can’t refinance due to limited cash flow or poor credit can opt for reverse mortgages. Home Equity Conversion Mortgage (HECM) for purchase is a reverse mortgage that allows seniors to buy another property. That said, it is complex, and you should study the risk factors before getting one.

What are the risks associated with reverse mortgages?
Reverse mortgage scams are not unheard of. Unreputable vendors could offer to help seniors secure reverse mortgages by undertaking house repairs. They don’t provide quality results and get away with the homeowner’s money instead. For spouses living together in a home with only one spouse named as a borrower on a reverse mortgage, the other spouse can lose the home if the borrowing spouse dies first. Besides, reverse mortgage lenders charge fees and closing costs and may also charge mortgage insurance premiums for federally-insured HECMs.

Must Read

View All
What to look for in a studio apartment
Real Estate

What to look for in a studio apartment

Studio apartments are different in many ways, when you compare them with other types of properties. One of the main advantages of taking up a studio apartment is that they are cheap. Thus, looking for a roommate just to save rent is not the first thing that will come to your mind, before moving in. You would think after living in a one bedroom or with your parents in the suburbs, before graduating school, adjusting into a studio apartment will be a major task. But it is not that difficult as it looks, in fact moving into a studio apartment which suits your needs and for that purpose meets your budget is not such a big transition after all. Here are some of the reason why you should prefer a studio apartment, over a one bedroom. Space: Compared to decent one bedroom apartments, studios will have a lot more vertical space which can be a bit confusing at first to adjust to. But you can use most of this space to create shelves and cabinets, utilizing the height instead. Granted there will be limited horizontal space, but it won’t make much of a difference if you can get used to the fact that you might have a larger than normal ceiling limit which actually sound kind of cool. Downsizing: When you are transitioning from a big space to a studio apartment, you might find it tricky to adjust all the extra stuff. The solution is to pile most of the things into the newly closet space designed to make the most of the ceiling height. This will ensure you don’t make the small studio look cluttered and cramped beyond comfort. Look for the essentials: Moving into a studio apartment doesn’t necessarily mean that you give up your stove and cooking appliances, just because space is an issue. Look for an apartment which can still fit the essentials like a gas stove, cooking countertops, even a dishwasher for that matter. It all depends on the design of the apartment and the fact that how smartly can you use the space to make most of the layout as is. All the above points will help you to look for a studio apartment which still feels like a one bedroom. The main point is you should not under any circumstance compromise on the living space, after everything is said and done.
Different types of residential homes available for rent
Home

Different types of residential homes available for rent

Finding a decent place to live is like winning the lottery nowadays. with so many options available to choose from, and attractive pricing for that matter, finding your dream house can be quite a challenging task. There are a number of factors to be considered, even before you start weighing the pros and cons. For starters, houses are classified according to type and category for one thing. You can choose to live in a single-family home which may be a one bedroom or a two bedroom, or you can opt for a condominium is you are planning to share the apartment with a couple of your college buds or office colleagues. Townhouse are a rage since they feature both a condo and a single-family home. Here is a list of pros and cons you can consider to differentiate between the various types of homes. Single family home: since they are built solely to accommodate one family, you won’t have to compromise on privacy. These homes will have their very own parking, front yard and some even backyards. But the maintenance for this property will be a lot more compared to other residential lots. But this type of a home will give you the freedom to express your won’t living style, without having to compromised on the things which you like. Condos: Condos can be found in densely populated areas, and generally consist of a number of ingle unit flats in a building or community or homeowner’s association, where the rent is to be paid on a monthly basis. However, condos being a part of the association, the resident has nothing to worry about in terms of maintenance and upkeep. The downside however is the shared accommodation, even if there are walls separating the occupants. Townhouse: The townhouse is a cross combination between a condo and a single family home, thus featuring both pros and cons. On one hand a townhouse will offer more privacy compared to condos, but they don’t usually feature the shared amenities that condominiums do. In case of a town house, there will be joint maintenance agreements to share upkeep costs and are more affordable than single family homes. When it comes to weighing in our options to decide on a place to live, you have to take into account one main factor that is how much are you willing to compromise on comfort and privacy so as to afford that place near your work, or are you willing to commute from the suburbs where you will have all the privacy you will ever need. Deciding on this will enable you to then narrow down options according to your budget to look for residential homes available on rent from the owner.
Tips to decide on what kind of property to rent
Property

Tips to decide on what kind of property to rent

House hunting can take a toll on you, especially if your are new to the city and the neighborhood for that matter. You don’t just go and move in the first place you see, that is not how it works. There are a number of factors to consider and options to weigh in even before you can think of moving in. Here are a few factors to consider before signing in that lease deed. Legal system: There are specific tenant laws which govern the agreement, which will also differ according to location. You may find homes which are available for rent directly by the owner, but this is where those owner tenant laws come into play. Understand the laws which govern that particular are in order to make sure the owner is not taking you for a ride and that everything he says pertains to the generally accepted norms. Property inspection: Whether you go through an agent or find listings for homes for rent by owners directly, you still have to ensure that a thorough inception is conducted by an expert. If you do find anything that needs repairing or needs replacement in the apartment, do not hesitate to contact the owner. Generally, your landlord will be responsible for home maintenance and must ensure that periodic renovations are carried out. Lease terms and agreement: After everything is said and done, comes the lease agreement. This is a binding contract between you and the owner, so read the terms and conditions very carefully before committing. Have an attorney or a legal expert go through the lease once, the lease should be such that it benefits both parties and not just the owner. Types of homes available for rent: Single family homes: These are ideal for families giving you all the privacy you will ever need, with your own parking and garden. But such homes are a little high on the maintenance and ha to be taken care by the owner. Condominiums: These are mostly single units which are designed to accommodate a number of occupants in the same building unlike single family homes. The privacy is not compromised much, but you will still feel the changes I occupancy every time someone changes or moves. However, in case of condos, the maintenance and upkeep is taken care of by the home owners association which is formed for that particular building. There are many others like townhouses, multifamily rentals and more, information about which can be found online on major real estate websites and through known agents and brokers. You can also find listing directly by owners for rent, cheap homes for rent online and more.
Benefits of renting a duplex
Duplex

Benefits of renting a duplex

There are a number of options when it comes to renting a place, ranging from single bedroom apartments, to duplex, to condos, to townhouses and more. but with so many options available at attractive prices, it just might become a bit difficult to choose from. Here are a few reasons why a duplex should be preferred over renting other residential properties. Work from home: Duplex homes are designed in such a way that you can easily create a separate office space for yourself. Apart from spacious living spaces and communal spaces, duplex offer the flexible option to people who work from their homes or have a job that requires them to commute only a couple of times to office in any given week. The layout of a duplex helps balance both your work life and home life, keeping them separate at all times. Rent out the extra space: If you just happen to own a duplex, you can let out he additional portion of the house for travelers and tourists searching for vacation homes. Vacation rentals are generally for a shorter duration and the occupants keep on changing, but you are free to charge good rates and people will generally prefer a full apartment to rent instead of jus renting out a single room. Shared backyard or garden: Nowadays it is impossible to find a decent space in the city which also happens to have a decent backyard or small garden. But duplex are designed by default to have a garden space which is of course shared with your neighbor next door. This is any day better than having no garden at all, for a number of reasons. The occasional breath of fresh air, and a nice little garden for you kids to play will be a good change form the over polluted and crowded parks and so called recreation facilities in the city. No matter how well they are maintained, public parks will always be over crowded on a nice warm sunny weekend where you kids have to wait for their turn to get on the slide. Build a small one in your backyard with a nice porch swing to go with where you can relax and have all the privacy you need, provided there is a wall which splits the shared backyard space. Plenty of space: Compared to renting two bedroom apartments or even a nice condo in the city, duplex will always feature more space and all the power outlets you can install to make sure there is enough for the number of appliance and kitchen utilities you can install. The living space and communal areas will also be spaced out to maximize comfort and promote a cozy living.
Things you need to know about clayton modular homes
Modular Home

Things you need to know about clayton modular homes

Modular homes as the names suggest are prefabricated living spaces designed on a specific theme or as requested by the client. Home companies are now following this method to manufacture all the structure components off site and then simply assemble them on site, to build a beautiful living space for you and your family. This process is more cost effective and efficient, not to mention time saving since prefabricated structures are easy to manufacture and mass produce. Modular homes are fabricated in sections and then assembled together like a big toy set. They are real houses which are eligible for all the particulars of any other type of residential property. This property will depreciate over time just like any other normal property, and the fact that they are nothing more than pieces of house put together doesn’t affect its treatment. One of the companies amongst many other who specialize in modular homes is Clayton. Clayton is a big strong team with over 13400 members who have helped families build their dream homes for over 60 years now. Clayton has been providing affordable home and quality living spaces since 1956 with projects ranging from traditional site built homes, modular homes, manufactures homes, college dormitories, apartments and even military barracks. Clayton features Energy shared certified homes, which boasts a number of benefits. Energy star homes by Clayton are less expensive compared to your standard homes, because of low utility costs. Energy efficiency also ensures more comfortable and quieter homes. Effective insulation ensures you stay warm during the winters and enjoy a cool breeze with energy efficient cooling, not having to worry about the electricity bill. These home are built with attention to detail which helps eliminate drafts, moisture, dust, petals, pests and pollen. This also improves the quality of air inside and ensures an overall healthy living. Modular homes may be constructed in a different way, but they are not so different than regular housing.
Cheapest cities to rent an apartment
Apartment

Cheapest cities to rent an apartment

Looking for an apartment to rent is one of the major challenges you face when you are new to the city. Apartment prices will depend on a number of factors like area, the neighborhoods around, construction and more. but not all apartments prices are sky high, in fact here are five cities where you can rent apartments starting at just under $550 on an average monthly basis. Detroit, Michigan: Apart from the cost of making some minor changes and renovations to the apartment you are trying to rent, Detroit homes can certainly be rented for cheap. The monthly median rent ranges on an average between $550 to $560. Apartments are cheap and affordable according to the cost of cost of living standards of the city, even cheap to purchase at just an average of under $43000. Shreveport, Louisiana: Probably one of the cheapest cities in the State of Louisiana, since it offers the lowest real estate tax rates in the country. The cost of purchasing a home is very expensive here, but the average monthly home rent is just under $578 with a cost of living standard which is a little less than that of Detroit. Akron, Ohio: The city which his also know as the rubber capital on account of the rubber tire industry which manufactured most of the country’s stock. Akron boats a number of research and development facilities, even after most of its rubber factories were shutdown. The real estate is also right on point with an average median rent of just $541 per month. Birmingham, Alabama: The largest city in Alabama, but houses only 60% of the population compared to what the number was back in the day. This has helped boost real estate where the demand is low and thus prices are within budget, for both purchasing and renting for that matter. The monthly median rent is just under $520 which makes it a cheap place to live. Buffalo, New York: In New York city, you might just get a decent apartment for an average of $1000 a month. But here in Buffalo, you can easily afford a decent place for almost half the price. The cost of living standard is right around that of Shreveport, but that doesn’t majorly affect the price of renting apartments and the median range is right around $512. There a number of cities where you can rent a decent apartment for less than $550 dollars.