Are you about to retire, thinking about living someplace warm all year around. How does a retirement comumity in North Carolina sound? Wait, you can’t retire since you haven’t stashed money into a 401K plan, social security isn’t enough for you? Well you might still be able to retire by selling your home or getting a reverse mortgage. You’ll get even more money now with a reverse mortgage since mortgage rates are so low right now.
You can find out more about reverse mortgage right here, also the FHA provides information on reverse mortgages and there are HECM housing counselors available also for free or at very low cost, to provide information, counseling, and a free referral to a list of FHA-approved lenders, a mortgage calculator will help you determine if a reverse mortgage is good for you. Also find out how much you can receive every month in a reverse mortgage by keeping track of mortgage rates with a mortgage rates widget and lock-in the lowest mortgage rate when rates decline.
With a reverse mortgage it’s basically a line of credit unscheduled payments or installments, at times and in amounts of your choosing until the line of credit is exhausted. Many retirees have been hurt by low CD rates and savings rates and a a result their interest income is way down.
If you didn’t make saving for retirement a priority and Social Security pays benefits that are on average equal to about 40 percent of what you earned before retirement and If your employer doesn’t offer a retirement plan you sould think about a reverse mortgage. Also since current mortgage rates are another compelling reason.
The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home, sales price or FHA’s mortgage limits, whichever is less.To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, and you must live in the home.By diversifying this way.
You are more likely to reduce risk and improve return.Like all homeowners, you still are required to pay your real estate taxes, insurance and other conventional payments like utilities.You know that saving is a rewarding habit.But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home.
As their principal residence or fail to meet the obligations of the mortgage.You can receive additional free information about reverse mortgages in general by contacting the National Council on Aging at (800) 510-0301 or downloading their free booklet, “Use Your Home to Stay at Home,” a guide for older homeowners who need help now.The HECM is a safe plan that can give older Americans greater financial security.
IRAs can provide an easy way to save.It’s smart to know more about reverse mortgages, and decide if one is right for you!The reverse mortgage is different in that it pays you, and is available regardless of your current income.You should receive a Social Security Statement each year that gives you an estimate of how much your benefit will be and when you can receive it.
You can set it up so that an amount is automatically deducted from your checking or savings account and deposited in the IRA.Remember, it’s never too early or too late to start saving.Financial security and knowledge go hand in hand.The Home Equity Conversion Mortgage (HECM) is FHA’s reverse mortgage program which enables you to withdraw some of the equity in your home.
You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.Find out about your plan.A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash.Inflation and the type of investments you make play important roles in how much you’ll have saved at retirement.
Over time, compound interest and tax deferrals make a big difference in the amount you will accumulate.Modified Tenure – combination of line of credit with monthly payments for as long as you remain in the home.Your investment mix may change over time depending on a number of factors such as your age, goals, and financial circumstances.
Take charge of your financial future.For more information, visit the Social Security Administration’s Web site or call 8712 To be eligible for the FHA HECM.
Your home must be a single family home or a 1-4 unit home with one unit occupied by the borrower.With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments.
You are also required to receive consumer information free or at very low cost from a HECM counselor prior to obtaining the loan.Find out if you will be entitled to benefits from your spouse’s plan.The sooner you start saving, the more time your money has to grow (see the chart below).There are a number of retirement saving plan options available.IRAs also provide tax advantages.Put your savings in different types of investments.Know how your savings or pension plan is invested.
Tenure – equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.Learn what benefits you may have from a previous employer.The tax treatment of your contributions and withdrawals will depend on which option you select.Learn about your plan’s investment options and ask questions.
With a HECM, you don’t make monthly principal and interest payments, the lender pays you according to the payment plan you select.For example, how much would you need to contribute to get the full employer contribution and how long would you need to stay in the plan to get that money.If you change jobs, leave your savings invested in your current retirement plan, or roll them over to an IRA or your new employer’s plan.
Before you change jobs, find out what will happen to your pension benefit.When you sell your home, you or your estate will repay the cash you received from the reverse mortgage plus interest and other fees, to the lender.FHA does NOT recommend using any service that charges a fee for referring a borrower to an FHA lender.When you open an IRA, you have two options.
Traditional IRA or a Roth IRA.Your taxes will be lower, your company may kick in more, and automatic deductions make it easy.If you withdraw your retirement savings now, you’ll lose principal and interest and you may lose tax benefits or have to pay withdrawal penalties.The key to a secure retirement is to plan ahead.Devise a plan, stick to it, and set goals.
The equity that built up over years of home mortgage payments can be paid to you.You can find a HECM counselor online or by phoning (800) 569-42 If you are already saving, whether for retirement or another goal, keep going!If you’re not saving, it’s time to get started.Generally, the more valuable your home is, the older you are, the lower the interest, the more you may borrow.
Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements and more.If your employer offers a retirement savings plan, such as a 401(k) plan, sign up and contribute all you can.See below for more information.Experts estimate that you will need about 70 percent of your preretirement income – lower earners, 90 percent or more.
To maintain your standard of living when you stop working.How you save can be as important as how much you save.Retirement is expensive.Term – equal monthly payments for a fixed period of months selected.Also, the after-tax value of your withdrawal will depend on inflation and the type of IRA you choose.Search online or call (800) 569-4287 toll-frer.
Tor the name and location of a HUD-approved housing counseling agency near you.Ask for an individual benefit statement to see what your benefit is worth.Start small if you have to and try to increase the amount you save each month.With an FHA HECM you cannot be foreclosed or forced to vacate your house because you “missed your mortgage payment.
You can put up to $5,000 a year into an Individual Retirement Account (IRA); you can contribute even more if you are 50 or older.Start by requesting Savings Fitness: A Guide to Your Financial Future and, for those near retirement, Taking the Mystery Out of Retirement Planning.If your employer has a traditional pension plan, check to see if you are covered by the plan and understand how it works.
The remaining equity in your home, if any, belongs to you or to your heirs.HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible.Your employer may be able to set up a simplified plan that can help both you and your employer.You can also start with much less