Join us Wednesday, 3/25, as Ted Butler, host of KIXI Radio's "Affordable Aging", guides Senior Homeowners on a tour of the FHA Reverse Mortgage.
Not sure just what a Reverse Mortgage is? Or do you think you know what a Reverse Mortgage is? Are you 62 years of age or older and own your own home? Then this comfortable, class room style workshop is for you. Call today to reserve your seat: 800-963-8011.
Unless you've had a chance to find out about the important changes made by The Department of Housing and Urban Development and The Federal Housing Administration then you owe it to yourself, and your family. to come hear "the rest of the story".
Ted Butler has been teaching seniors and their families about the FHA HECM (Home Equity Conversion Mortgage) for over five years. As host of KIXI Radio's "Affordable Aging" Ted brings a wealth of knowledge of just what issues are important in today's trying financial times. Ted was also invited to be a part of KCTS Channel 9's special report,Tough Times - Rising above the Financial Crisis.
Please call to RSVP, seating is limited. Provided will be both printed and visual learning materials and a nice hot lunch. The class room setting allows for a warn exchange of the facts and the opportunity for real life examples of topics such as: What is a Reverse Mortgage and how does it work? The History of the Reverse Mortgage, Common Myths & Misconceptions, How much do I get and How much does it cost as well as the New FHA HECM for Purchase.
Did you know that for many Senior Homebuyers today that their Purchase Finance options have all but vanished? Don't have a great Credit Score? Don't have good income? You may have found that your local bank has simply told you "Good Luck!"
But with the passage of the Housing and Economic Recovery Act of 2008 Senior Home-buyer's now have the use of the FHA HECM as an exclusive finance option for new home purchases!
Call today to learn more. 800-963-8011
Free Lunch & Learn Workshop:
Reverse Mortgages Explained
Wednesday, March 25, 11:00 to 1:00
Location: Stay In Home Mortgage, Inc., 1000 124th Ave NE #200, Bellevue, WA 98005
The "Graying" of America... is it time to revise how we look at retirement?
With boomers now turning age 62 at close to 10,000 each day and growing we are also finding the ranks of seniors being joined more and more so by those much more versed in modern finance. Fading are the closely held notions that things like one's home are now far more than just a homestead, passed down from one generation to the next as a means of accumulating generational wealth. Today people are finding that their home is an investment, and while it still remains a place to raise one's family, many families live in two, three, four or more homes while raising their family. And the concept of paying of the mortgage used to purchase these homes get's extended as do the concept of the home as an important part of a family of this current generation's financial master plan.
Sadly as well many retirees are finding that it wasn't the failure to plan for retirement that is placing so many in the unenviable position of having to put off retirement or lower what expectations they have of a certain lifestyle in retirement, it is simply that plans for many "financial planners" have failed. Keep in mind that those same planners though are quick to point out that it wasn't their plans that failed but rather the system itself...
But, for all the good that the FHA Reverse Mortgage is doing to help keep senior homeowners in their own home and provide additional income, the reality is that this is not a "one size fits all" type of solution. Even for those who do qualify for this program it simply may not be the direction that some still choose to go.
Interesting to think though how different things are today for those reaching the age 62 than it was for those just 10 or 20 years ago. Pensions... once the mainstay in plans for retirement have all but disappeared. And with savings in America at an all time low, negative 1% as of last account, the implications of stark social contrast can be quite shocking, especially for those from the "Greatest Generation". One of the underlying facts that have been difficult to plan for is that we as a population are simply living longer. And with that longer lifespan comes a complete rethinking of everything from how long does one work or how soon one retires. We have shifted from a "labor" oriented workforce to more "service" oriented. In generations past where engineers took on the mantle of manual labor, sometimes quite strenuous and at time perilous, today's engineers type as their major physical exertion which brings along with it a whole new set of concerns. But for those fortunate enough to have reached retirement with sufficient equity in their homes, there is relief, the FHA HECM.
Accusations have gone ‘round more than twisters in Oklahoma in the Spring time. With plenty of blame no matter which way one points one thing is certain... we are where we are. The Stock Market is in the tank, the Real Estate market has gone through far more than the "correction" that experts told us we were dealing with two years ago. And the Banks... well, true, money has gotten tighter, but the real issue is that lenders got burned with lending to people who they knew going in had higher probabilities of defaulting... and to no one's surprise, they did. There is still plenty of money to borrow, but if you don't have high credit and good income your options have vanished.
And what are we to do? Well, as someone who as seen just about all that this economy can dish out after 50 years, Mr. Nicholas Caputo, retired President of Bank of America's Trust division and former Vice President of Chase Bancorp tells us "...we've been through tough times before. Our salvation isn't going to come from our leaders, it's going to come from the same place that it has always come from, the strength and resolve of the American people themselves."
And he's probably right... let's hope he's right, the alternative isn't a pleasant one. But with every challenge comes the opportunity to learn. We as a people are a nation of "non quitters", of stumblers and fumblers who's only difference between their success and other's failures is that they simply did what it took, they picked themselves up yet again, they persevered, and they overcame. We shall overcome...
That is the question many in the mortgage industry, and many senior homeowners, are asking these days. After 20 years of near obscurity the FHA Home Equity Conversion Mortgage seems to be finally getting the due so well deserved. Not the first choice for advertising budgets spent by mortgage lenders looking to maximize return on marketing dollars, and slow to shed the mantle of derision brought about by abuse of reverse mortgages of days gone bye, perhaps the stars have finally aligned for the safest mortgage in America today.
We are at a unique period in time where the awareness of the Government version of the Reverse Mortgage is at it's highest. Combine that increased visibility with a dramatic decrease in financial stability and you find that environment for a "perfect storm" of sorts, but instead of a storm senior homeowners today are finding a safe port in these unsettling financial times.
Also contributing to the growth in the FHA HECM are the recent passing of the Home and Economic Security Act of 2008 which brought with it an increase in the FHA lending limit to $417,000.00 and the limiting of certain fees charged the borrower. And the current administration has leant this program a hand as well, the Stimulus Plan just signed by President Obama further raises the FHA lending limit to a new height of $625,500.00, great news for that select group of homeowners that have seen some of the most dramatic gains in home appreciation over the past few years. As well with gains in property tax that quite sadly has lead many in this situation to sell their beloved homes because with their limited income in retirement, even with planning, they simply find it difficult if not impossible to keep up.
Affordable Aging Saturday morning at 8:30 on AM 880 KIXI Radio and streaming online at www.kixi.com
Hello, I'm Ted butler, your host for "Affordable Aging". I invite you to grab a cup of coffee, pull up a chair, and join me every Saturday morning when we'll discuss the latest in government programs, insightful interviews, and information about the issues that are important to you and your family during these trying financial times. We'll have the latest in senior programs and services dedicated to help senior homeowners age in place with safety, independence, and the dignity we all deserve. I welcome your input and suggestions for show topics. I'll be talking with you!
New legislation has positive effect on reverse mortgages
By Colby Keener Sunday, September 28, 2008
On July 30, the president and Congress signed into law the Housing and Economic Recovery Act of 2008.
This law made a number of changes to the housing and mortgage industry. One item that was rarely discussed is the effect that HR3221 has on reverse mortgages. This very important legislation has been in the works for almost two years now. This is positive for the industry and most importantly to homeowners considering reverse mortgages.
Reverse mortgages have come a long way since 1961 when Nelson Haynes of Deering Savings & Loan extended the first reverse mortgage to Nellie Young, the widow of his high school football coach. It was an act of kindness that today continues to offer a helping hand to seniors in need.
Over the years, reverse mortgages continue to improve with stricter regulations, oversight by the Department of Housing and Urban Development and the mandatory third party counseling to ensure that all borrowers understand the product before the loan process starts. These and other improvements are helping families recognize that a reverse mortgage is a legitimate retirement tool.
The reality in this country is that our home represents the largest asset for most people. Even as real estate values decline from inflated highs, the median home value in Ventura County still exceeds $400,000. Given the tremendous wealth tied up in real estate and the continual rise in cost of living, a home must be considered as a tool to supplement retirement income.
We expect the changes for points one and two to be effective sometime between November 2008 and January 2009. The three key changes include:
Reduction in loan costs. Loan origination fees will be capped at $6,000, compared to $7,255 or higher today. Fees will be calculated at 2 percent of the first $200,000 of home value and then 1 percent of the value that exceeds $200,000. It is recognized that loan fees are a deterrent for reverse mortgage candidates and that these changes will help to alleviate this obstacle. Often overestimated in the cost structure of these loans is the cost of comparable options to improve your cash flow.
Selling your home and downsizing may be a good option, but consider that real estate fees, closing costs, and moving expenses can cost you up to 8 percent of your home's value.
Increase in cash available. The amount of money you receive is mostly based on age, interest rates and home value. In Ventura County if your home is worth more than $362,790, the value above this amount is not considered in determining your benefits due to current Federal Housing Administration lending limits. Whether your home is worth $370,000 or $600,000, current limits allow you to borrow only a percentage of $362,790.
The new law will increase the lending limit to $417,000 nationwide and up to $625,500 in areas that the FHA will define as "high cost." The estimated impact will increase the dollars available to reverse mortgage borrowers between 15 percent and 70 percent depending on your home value and how the limits are implemented.
Purchase a home with reverse mortgage. For seniors looking to relocate or downsize, this feature will allow you to purchase a house without taking on a mortgage payment and without having to sink all of your cash into the house. The idea of spending the rest of your retirement years making mortgage payments can be quite daunting. Many times that cash can be used to help better afford cost of living increases, maintaining the house, and enjoying retirement in a way you had envisioned.
These changes represent the continuing road to making reverse mortgages as mainstream as your 401(k). As with any program, this does not work for everyone, but most people should at least understand the facts on how this program works. Our lives can change quickly and being prepared is the key.
- Colby Keener is the regional manager of Bellevue, Wash.-based Stay In-Home Reverse Mortgage Inc. He can be reached at 805-485-6800.
With the Economic Stimulus Package up next the President is just a signature away from siging in to law the legislation that will give thousands more Senior Homeowners access to what for many of them has become their only viable asset - the very home that they live in.
But timing is an interesting player in this mix. The conventional lending industry and it's supporting entities are reeling under the Sub-Prime meltdown. Then there is the housing market that is at very best "soft" in many parts of the country.
While this new bill will lower a portion of the fees and costs associted with the FHA HECM (the financed origination fee will drop from a maximum 2% of the loan amount to 1.5%) this will be quite minor compared to the largest contribution to the overall cost, the FHA Mortgage Insurance Premium that remains at 2% of the loan amount. It is interesting that while the Government is touting this as a cost saving measure... they themselves still represent the largest part of the cost to the consumer.
What home owners and lenders alike a waiting for though is the FHA Countly Lending Limit to be increased to $417,000.00 for the entire continental United States. This represents a jump anywhere from 14% to more than double depending on the county.
This increase will allow hundreds of thousands more homes to qualify as well as give a tremendous opportunity for those already in a FHA HECM to refinace and take advantage of the gain in accessable equity. That is if their homes have appreciated, and held that appreciation.
It's been a great month in reverse mortgage. My company is expected to close well over 100 loans in October.
Reverse Mortgage is very gratifying work, as each day I am able to enjoy helping seniors understand how the federal government had created a program to help them stay in their homes for the rest of their lives.
Many seniors think that the FHA HECM or Home Equity Conversion Program is too good to be true. There is no other program out there that gives seniors the financial flexibility, security, and peace of mind.
There are non-fha programs available for seniors in higher value homes that can also be just as valuable to help seniors keep living the lifestyles that they are used to, without having to "downsize" their living situations.
On Wednesday September 19th - The Chairman of the Banking, Housing, and Urban Affairs Committee had announced that the Committee had passed the FHA Modernization Act of 2007. Legislation that seeks to help American families that have been hit hard by the current mortgage market crisis, including those that currently face the threat of foreclosure and those who may be seeking financing to buy a new home.
*Increases FHA single-family loan limits 100% of the median home price of an area or the conforming loan limit that is currently $417,000, whichever is lower.
*Downpayment Requirements Reduced to 1.5% from the current requirement of about 3%, depending on an assortment of factors. Sets the maximum loan amount of 100% of the appraised value of the home.
*Simplifies FHA requirements for condominiums so that FHA can be used more effectively to purchase condos
*Expands the FHA HECM senior reverse mortgage program. The legislation sets one national loan limit equal to the conforming loan limit (currently $417,000). In addition, the legislation lowers the origination fee from 2% to 1.5%, a cut of 25%.
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Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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