Possible Changes for Reverse Mortgages

Are the upfront charges for Reverse Mortgages coming down?  The FHA isn’t talking about this too loud, but the agency may be getting ready to lessen the upfront costs of ‘Reverse Mortgages’ for some borrowers.  They are also considering reducing the amount that seniors can borrow from their homes.  The ‘Reverse Mortgage’, or ‘Home Equity Conversion Mortgage’, as it is called, is designed to let homeowners who are 62 years old or older tap into the equity of their homes.  The loans and accrued interest do not have to be repaid until the owner sells the home, dies or fails to live there for one year.  These loans have traditionally had significant upfront, and annual expenses.  There has been a trend in recent months, however, with some of the ‘Reverse Mortgage’ lenders decreasing their origination fees and closing costs.

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Debt Management

Today, homeowners and consumers are finding that because they have fallen behind on certain payments, their credit rating is showing the results which can prevent them from buying another home, or refinancing, or hindering their ability to do home improvements, etc. At this point many people search out ways to get back on track to repairing their credit.

A ‘Debt Management Plan’ is very popular and is a simple and effective way to pay your non-priority creditors. Your assigned counselor will calculate the amount you can afford to pay after giving consideration to your priority debts – mortgage, utilities, council tax etc., and day-to-day living expenses. Any money left is then deposited with the DMP administrator as a single monthly payment and then distributed to your non-priority creditors on your behalf. What are the benefits of this plan?

The ‘Debt Management Plan’ administrator will request reduced payments on your behalf, with your creditors. In many cases the creditors will also agree to totally freeze or reduce the amount of interest being charged on your accounts.
With the ‘Debt Management Plan’ you have:

• Assistance in dealing with your creditors
• Making payments you can afford and reducing your debt
• Having regular reviews of your circumstances and your monthly deposit amount changing to reflect your current situation.  Once the DMP administrator receives your monthly deposit, you have peace of mind in knowing that all of your creditors on the DMP will be paid.
(You can do a search on Google by typing in: Washington State Debt Counseling, or, Washington State Consumer Credit Counseling)

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FHA Home Financing

Many people do not know where to go to find out about FHA Home Financing and if they can qualify for an FHA loan.

The best thing to do is to call banks in your area and ask for the mortgage officer. Ask that person if they handle FHA – most banks do, but some don’t. In this case you might have to do some homework.  FHA loans have the advantage of requiring only 3.5% as a down payment, which means less cash out of your pocket (a conventional non-FHA loan would require 20% or so down. The disadvantage is that you have to pay FHA an insurance premium for the loan guarantee, which means that .your closing costs are higher, but usually not enough to offset the much lower down payment.

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Make a Home Look More Expensive

When you are getting ready to sell your home, there are many things that have to be done so the house is in excellent condition when potential buyers come to look at it.

Home staging is very important and whether you do it, or hire a professional to do it, certain things should be done to make the home look and have a feeling of being in fashion and up to date. This brings up the age old problem of having to re-do the home and possibly having to go buy new pieces of furniture, or accessories.

Unfortunately, there is not just one place to find home staging supplies, so being creative is important, not only in what you use, but what you buy, and then how you use it.  You can get some ideas from your close friends.

Here are five ways to make your home’s interior look more expensive, and in fashion, but not at the cost of your bottom line:

1.  Use one expensive piece of furniture, or other item, in each room, well positioned.  It can be a piece of art, a table or something rare and expensive like valued china. The expensive piece(s) should be the focus of attention as soon as someone walks into that room.   This is what they see first. First impressions!

2.  Use white. It has always, and will always be a staple that professional home stagers use. It radiates of light, cleanliness, and open space. Try using inexpensive white pieces on an expensive table or other piece.

3.  Look at what can be recycled. Try recovering a favorite chair or sofa.  Much of the furniture of past years had great design and great lines and sometimes are worth recovering and restoring them back to life.

4.  Rotate your theme colors, and do it in each room if possible. Every new season, the design world changes the “what’s-in” color.  A good way to make your home look in-style, is to have that in-style color. Visit some ‘in’ stores in your area, and see what they are doing with different colors, how they are using them, and which is the most popular.  You will get lots of good ideas.

5.  Don’t buy new furniture or accessories at the beginning of any new season.

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Some Advise For the First Time Buyer

When you are purchasing a home you will need anywhere from 3½% to 20% down, the lowest down payment being a Government FHA Loan. So what are the limits on such a loan?  The limit on a FHA Forward is $271,050.00.

Going on the assumption that your FICO score is at least 620, you will be able to qualify for a FHA loan that only requires a 3.5% down payment, so on $$271,050.00 mortgage loan you need $9485 down. When calculating your projected monthly payment, be sure and include what is called private mortgage insurance (PMI) until the principal becomes 80%. Another monthly expense is your property taxes and insurance.

This loan might cover less of a house than you were counting on, but it will keep you safe from payments you cannot afford and start you off on a good foundation of home ownership.

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