California Reverse Mortgage Lender

The issue I wrote about in my last post involved the new congress’s bill to help ailing homeowners going into foreclosure. I was researching this topic a bit further to find out what the current house rates look like in California. Since I search the NRMLA website from time to time I found a graph that shows the average home value is still. 69% higher over the last 5 years. I also noticed house prices had gone down by a % point or more. The economy as it is might still shed a few more points, but I hope they will stabilize by years end. ( a prediction hoped by many)

Home price graph for California home owners

reverse mortgage info.org

LIVING in REVERSE

Welcome to Living in Reverse

We all need accountability when it comes to dealing with our nations aging population. Today, the world is moving at such a fast speed we seem to forget sometimes that life is really a precious thing. When it comes to my parents, I want them to be happy in their older years as much as I was when I was a child with them. Now there really is no way to make that happen if I can’t be with them enough to even say hi or pick up the phone on a daily or weekly basis. Being as busy as we are on any given day, it seems we are negligent of our duties as children to our senior parents. They did raise us after all. Now that we are starting to see what that is really all about (some of us anyways), then we can see right away they spent a lot of time raising us. Now its time to take care of them.

My parents need a reverse mortgage. I am an agent who happens to do reverse mortgages. So I know about all of the “up” and “down” talk that goes on about these loans. One evening my dad called me and asked what I knew about the reverse mortgage process. I told him about the major banks that lend the money to cover the value of his home while he lived there. I also mentioned that there are smaller lenders who can sometimes make a loan work (within the FHA guidelines). I broke down the way a bank insures his loan and charges interest back to the loan. Finally we agreed that with a thousand dollar mortgage payment and a house that was worth over 6 hundred thousand, he would be able to get about 170 thousand from his home considering his age, and would not have to payback the amount he owed on the house. Being and agent who knows about these loans and knowing my mother and father needed some cash in reserves and could use $1000 a month I signed them up for a consultation with an FHA representative thinking they would come in to my office the following week.They did’nt show up right away. So the following weekend I went home to my parents (about 2 hours away) and I discussed at length the idea that this was their home and their lives we were talking about and not what they would “leave behind”.

Of course they would leave all that was here “behind” so I told them it is time now to be at one with “nature and each other.”

What I meant was, in this day and age the least I could do for my parents is assure them that it was going to be ok and that they were not selfish for taking the value of their house and turning it into a ‘new way of life’. Why would I, someone who had signed hundreds of people up for a reverse mortgage tell them I wouldn’t approve of their decision? I already had my fair share of conversations with people my age about the decision to take out a loan that would accrue interest. The fact was, I and my parents were no different than all those I helped through the process before. We were never ‘rich’ by the means of any standard. My parents both had jobs their whole lives and took care of every infraction or decision to better myself or our well being. So to me it was a simple decision. My father a savvy enough with his finances in his older years would make my mother happy with what ever she wanted while still having enough to plan their trips and buy his fishing outfit. This sense of freedom and happiness was overwhelming to me and for my parents it was enough to go out and “celebrate” together with my family. My father said to me six months later that this was what he was dreaming about when they called me from a gas station on the way to Moab.

This was really what I hoped for my parents and was glad to be of service in pointing out the cost/benefit analysis was on their side.

House Prices. Sustain in first Quarter 2008?

We all know that there were record house price increases especially in California from 2001 until now in 2008 we finally may dip a little bit as we did in the mid 90’s. Even then, we will not see levels of a decade ago, our house prices have shot up almost 55% since 1998 (average home values). So where does this leave us today if we want to cash in on the value of our homes? Straight into the horses mouth: we are on the edge of seeing substantial gains in the last 50 years equalizing again.

Looking back at the decade between 1980 and 1990: Over that period,  we had a relatively good economy with a housing slump in the 90’s and only a 4% gain was seen in average home prices with price drops seen for several years. Remember when we bought homes for under 25,000 in 1968? We see that the value of our homes has gone up by 19 times that amount since. What this says to me is that… going into a bear economy with full gail force in 2008 means we are at the tipping point and it looks like our 41 year projection, is a cooling effect. Now, inflation has been on the down turn for 15 years. If this increases like it did after Katrina in 2006 we might need to recalculate our current spending for our retirement.

What can one do in this economy to protect their worth? One may not want to infuse a lot of money in the stock market unless they know some good information about whats going to stick around or become the next wave, but it has been said that buying low is the key to success. Other investors go in for the long haul protecting their investments versus inflation and sometimes gaining on those figures with their own interest bearing accounts. The best way to secure yourself if you are 62 or older is to make sure you weather the storm so to speak in the next decade by sheltering your net assets. There are many traditional ways one can do this.

But not all of us have thought traditionally when it comes to our retirement, and in order to make it we have to find alternate forms of income or live by our bootstraps. But there is no need for this right now in California. Those of us with debt in our houses and who live on fixed income can still turn their houses around to make life sweeter all the way through the next decade. Ima talking once again about reverse mortgages and the important thing to know is that you still have the option to cash in on our home and take all or some of the proceeds to protect like the tigers do.

So why not wait it out? It appears we have increases in all 10 year spans and some significant drops. So it looks like the banks are covered on their investments. I know we can never tell exactly which way the proverbial wind blows in times like these so sometimes its better t get a sense and others its time to act. Ask yourself about what the market has done and imagine not having to sell your house on the market for months, or living but always paying out of your pocket for your home, Imagine even if you have your house paid off, you have money that can become available at any time with the California Senior Lenders.

If you have questions, send them to info@seniorlendersreversemortgage.com

FHA Gets a Review

Back in May of 2007 H.R. 1852 was passed by the House Financial Services Committee. See Press Release

Changing HECM or Home Equity Conversion Mortgages. Waiting until the bill gets passed the Federal Housing Authority and Financial Services Committee will be sending this through to the full Appropriations Committee by September. What is to come for the Annually reviewed HECM program? Lets take a look.

Why did the House of Representatives approve a bill that costs the average family $34.06 per year?

1. Number one it extends the program which is usually under review within every year. The bill does not put a limit on the number of mortgages the FHA can insure.
2. Second, it opens up the the FHA to cover larger equity homes in places like California allowing the lending limit be increased to the conventional limit currently $417,000.
3. Third, the amount of Origination Fees for the loan will be recalculated to either of two measures. Either the fee will be calculated on 1.5% of the total loan instead of 2% of $362,790 current capped figure, or the fee will be calculated against what a borrower qualifies for at 2% of that amount.

If these changes take place, keeping the HECM vital to our nation’s seniors the Government has done our parent’s a service to offer financial stability. This is what the bill is designed to do. No one wants to see their parents struggle in their retirement. If the candidate fits all of the requirements then the FHA may have your back. Of course, if you own your home outright and do not need to a large sum of cash then Reverse Mortgages might not make sense. The point is there is a level of struggle and love for our homes that need to be weighted against the options we have today.

Reverse Your First. Talk to an Expert today. 1 (800)-681-3340 SLRM