New Reverse Mortgage Option is Announced by HUD
There is a new modified version of the Home Equity Conversion Mortgage (HECM) product announced by the Federal Housing Administration (FHA). The modified version allows older home owners to tap into the equity in their home to cover living expenses and health care costs while continuing to live in their homes. The new version allows homeowners to not have to continue to make traditional mortgage or equity loan payments.
The new option will be available for all HECM case numbers assigned after October 4, 2010. The new FHA designed HECM Saver is a second reverse mortgage option to lower upfront closing cosst for homeowners who want to borrow a smaller amount other than what would be available through a standard HECM loan.
Some seniors find out fees are too high for them despite the popularity of out HECM loan. HECM Saver was created to provide seniors with a reverse mortgage option that significantly lowes cosst by eliminating Mortgage Insurance Premiums (MIP) that are required under the standard HECM option.
An upfront premium of .01% of the property value in the HECM Saver plan versus a premium of 2% in the HECM Standard option makes a difference. HECM Standard and Saver plans will be charged monthly for Mortgage Insurance Premiums.
Under the HECM Saver program, it will reduce the upfront fees while substantially lowering the risk to the FHA insurance fund because the principal limit or amount of money available to a borrower under the Saver program will be reduced.
Funds are advanced by HECM to the borrower and interest accrues, but the outstanding amount does not have to be repaid until the borrower dies, leaves the home or sells the property. At that time, if the balance due on the loan exceeds the value of the home, FHA insurance pays the difference. Borrowers may opt to receive funds as a lump sum at the loan origination, establish a line of credit or request fixed monthly payments that will be disbursed for as long as they continue to live in the home.
More information available at: www.hud.gov.
Seniors Should Know These Tips Before Modifying Their Mortgage
Since 2009, the federal government has ordered mortgage companies to modify loans rather than foreclose them. Therefore, I have some tips for seniors that can help before you modify your mortgage.
The idea is to cut the monthly mortgage payments so they are less than 30% of the homeowner’s income. The federal government’s Making Home Affordable Program has lengthened loan terms-in most cases, it extended from 30 years to 40 years, according to lenders and federal reports. Out of 390,000 mortgages, over half have been permanently modified through this program.
The U.S. Treasury Department has not released the number of struggling homeowners who have been put into 40-year loans, but lenders say that’s the predominant new term for modified mortgages. Earlier in January, about 42% of the loans modified at that point had been lengthened.
The number of mortgages that have been changed by trimming the principal on “underwater” houses is between 27% and 28% of all modifications. The modified loans have had their interest rates reduced.
Attorneys specializing in home loans say that, if you’re 60 in a 40-year note, you’re just renting from the bank and you’re paying more than you would from someone you could rent from. That is what the mortgage industry has gotten to.
The stepped approach to modifying home loans in the federal foreclosure-prevention programs is to reduce interest-rates and lengthen loan terms before the principal write-offs. This is according to what the government has called for specifically.
Mortgage companies are not allowed under the federal Equal Opportunity Credit Act to consider the age of homeowners when putting them into loans. Homeowners typically don’t have any payment penalties. Homeowners that have taken a 40 year home loan can always pay more if they want to treat it like a 30 year loan.
Forty year loans make little sense financially, particularly for seniors who face paying the upfront interest possibly for the rest of their lives. Usually, the 60+ clients take the reduced interest rate and longer term because they are attached to the home and want to stay.
Travelers Who Might Rent Your Vacation Home and How to Bring Them In
Fall is a great time to take a vacation, especially in resort communities such as Lake Havasu City. Visiting old friends and taking a break from the cold winter weather in other parts of the country may make your vacation home the perfect spot for travelers.
There is an abundance of possibilities for booking your home this fall. And it’s important to know what might interest travelers who are interested in renting your vacation home. Therefore, I have some tips that will help bring them in.
Warm Weather Lovers
If your vacation property is located in a warmer climate, then yours may be just the place for people that search for warmer winds. Be sure to include outdoor activities available to entice people to put on their shorts one last time before winter.
Outdoorsman
Entice hunters and fishermen as well as families with information about best times for deer hunting, fly fishing etc,. Include information for families about hiking and back packing for others to do while Dad’s hunting or fishing.
SemiLlocals
Many people with their budget in mind look for short trips closer to home. Include in your posting that a long weekend is the perfect get away. Fall breaks from schools or Columbus Day provides extra vacation time for families as well. Advertise with that in mind for travelers within driving distance. Post pictures of animals vacationers may see on or near your property.
Bargain Seekers
Bargain hunters can be frustrating during your peak season. Let them know you might be willing to entertain their offers once the off-season rolls around.
Promote your available fall weeks for those deal-seeking inquiries. Bargain hunters might take what they can get.
Treasure Hunters
Shopping for some is the highlight of their trip. Fall is prime for antique auction season and shopping. In your home’s fall postings, include information about shopping locations and auctions and any Christmas expos coming to the area.
Empty-Nesters
Parents will take advantage of their new-found freedom and extra spending money by traveling. Not being restricted to school time anymore, these couples may be more inclined to travel during off-season to avoid the crowds. Be sure to include attractions to your town during these times.
Honeymooners
June weddings aren’t for everyone. Focus on couples planning a fall wedding and promote your home as the perfect honeymoon place. Add romance to your ads by including photos of candles, rose petals, the tub filled with bubbles and champagne.
Event Seekers
Think of local events to promote your vacation home. List festivals and concerts or a trip to the pumpkin patch with hayrides. Be sure to include all events in your listing-you never know what will attract renters.
Pet Lovers
For travelers that can’t bear to leave their pets behind, including them in your vacation package may broaden your reach.
Retreat Planners
Employers try to boost employee morale by heading outside. A mix of brainstorming sessions and rounds of golf can do wonders for businesses. Sometimes professionals need time away from the bustle of the office to get inspired. Focus your posting on the quietness of your home and the availability of work space for those working vacationers.
Guy or Girl Getaway Travelers
Guys and girls of all ages need to get away from home and from each other. Feature local attractions that would appeal to groups like fishing, spas, and golfing. Think about father/son, mother/daughter getaways, too.
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