Can I Get a Reverse Mortgage If My Spouse in Under 62?

MortgageReverse mortgages are becoming integrated as a staple in the long term financial plans. Used in a comprehensive plan, reverse mortgages make retirement funds last longer. Unfortunately, there is still a lot of confusion for those couples with notable age gaps. Generally, reverse mortgages take place when all borrowers are over 62.

It is possible for a couple with one spouse who is under 62 years of age to get a reverse mortgage loan? Is it a smart financial move in this scenario?

Yes You Can! Make an informed decision.
The key is that all borrowers must be 62 years old, or older at the time of taking out the loan. The younger spouse must not be on title at the time of the loan closing.

Spouses under age 62 should have questions about this scenario. The key is to study your situation and see if entering into a reverse mortgage makes financial sense. HUD has recently made policy changes to protect younger spouses.

If the other spouse dies before the younger spouse, the younger spouse may inherit the home. The reverse mortgage repayment date defers for the lifetime of the younger spouse. This deferral period must be applied for. There are specific aspects of a reverse mortgage when there is a younger spouse (under age 62). Let’s take a closer look.

The Aspects
· The couple need to be married at the time of closing the reverse mortgage. (Common-law spouses are recognized as legal in the state where the borrower lives. This applies to same sex couples if recognized as legal in their state.)

· The younger spouse must not be on title at the time of closing.

· The reverse mortgage proceeds are calculated on the younger spouse.

· The non-borrowing spouse may not receive any remaining loan proceeds after the death of the other spouse.

· The non-borrowing spouse must establish legal ownership of their home within 90 days of the death of their spouse to qualify for the repayment deferral.

· The non-borrowing spouse must maintain their home as their primary residence.

· The non-borrowing spouse must pay property taxes, insurance, association dues and maintain their home.

· The reverse mortgage debt is only attached to the house. It is not a personal debt of the surviving spouse.

· If a reverse mortgage borrower marries after a reverse mortgage is in place, the borrower will need to refinance to add the new spouse on title or to qualify for a repayment deferral.

Providing they do the above, the surviving younger spouse may be able to continue to live in the home for their lifetime. The loan will continue to gain interest. They will not receive any more loan proceeds money. But the loan repayment is deferred for their lifetime. The exception is if there were repair funds in escrow. When those repairs are completed during this ‘deferral period’. Those funds are released.

When Does it Makes Sense to Get a Reverse Mortgage with a Younger Spouse?
The above aspects means that this plan may not be for everyone. So who does it make sense for, and when?

This strategy may make sense for couples desiring being mortgage payment free.

Proceeds may deliver a lump sum of money, regular monthly payments, or act as a flexible credit line.

It’s important to create a lifetime budget. Be sure to take into account any income changes when one spouse dies before the other. Life insurance, cash flow businesses and having other assets may be helpful.

The surviving spouse may not want to stay in the home. The property can be sold if they would like to downsize or go live with family.

Cash taken out earlier can be used to get a smaller home or condo. The guidelines require the borrower and non-borrowing spouse participate in HUD approved 3rd party counseling as a safety measure in protecting consumers. This occurs before any contract is signed.

Summary
In conclusion; it is possible for couples to take a reverse mortgage, even if one spouse is less than 62. It is important to look at the big picture, and whether this is the optimal strategy for your situation. For many it will be the best move.

It is vital for homeowners to understand the loan agreement in its entirety. Know the rules now, make your plan.

A Few Things You Must Know About The Probate Process

Probate ProcessProbate is becoming an increasingly important term, which is also commonly heard of these days. Therefore, it is definitely something that you must essentially know.
So, here is this article we shall discuss a few things about probate.

• Death – Following the death of a loved one, when you have grieved and paid your respects, it is the administering the property that must be concentrated on. You can hold off any legal process until you get the death certificate. But, once you receive the certification of death from the respective doctor or hospital, then you must begin to take care of administering the property.

• Get the papers in order – Once you are done with the funeral, it is imperative that you get the papers and the will of the deceased in order. This will help you and your estate planning attorney to set things in motion. The executor of the will shall require all such documents to carry on further with the process.

• Title to the real property – In case the deceased owned any property, then that property cannot be put up for sale until and unless the probate court appoints an executor. However, even if the process of sale cannot begin, the executor can start the process of retaining a specialist that deals with probate realty matters.

• The death certificate – As already mentioned, obtaining the death certificate allows one to begin with the legal procedures. Administering of a state is a complicated process and it is better to appoint a probate attorney for the same. You must have the will of the deceased if there is one. You must also carry necessary documentation like financial statements, a copy of the deed of the property, etc.

• File a petition for probate – The next thing that you must do is file a petition for probate in the court which is in the country of the deceased. Normally, a hearing schedule is within thirty to forty five days from the date of filing. The main reason as to why a period of about a month is given is to ensure that all people having an interest in the property are duly informed and can make the necessary arrangements.

• Sale of other items – Forms of any personal belongings of the deceased such as furniture, art, jewellery, etc can be carried out by the family members without any formality. However, if the will of the deceased states that certain items must be passed on to certain individuals, then that must be carried out in a proper manner.

So, now that you have read this article, you are more capable of handling probate matters should the need ever arise.

 

Collateral Loans Pros and Cons

Collateral LoansThese are also referred to as secured loans. When taking out a collateral loan there are many pros and cons, which a person should consider before taking out such a loan. There is no risk to the lender because if the borrower does not pay back the loan the lender has the collateral that the borrower used. Many times with a collateral loan you can get a lower interest rate and a longer period of time to repay the loan. Before applying for a loan figure out how much money you are going to need. You should avoid taking out excessive collateral loans because in the end you will paying back more money. To get an idea of how much you can borrow you should calculate your monthly expenses and monthly income and then decide after seeing how much you have left, how much of a monthly payment you can afford.

Next you will decide what you will offer as collateral because many times what you offer as collateral will help to determine what the rate will be for your loan. A collateral loan can be used to consolidate a debt, home improvements, vacation, or major purchase. When applying for this loan the loans that the bank or lender will give you against collateral will usually be percentage of the estimated market value. For example, if you are using a car that is worth twenty thousand dollars the lender would most likely offer you a collateral loan of seventeen thousand dollars, or approximately eighty-five percent of the value of your collateral.

Pros

• It is an easy loan to get and usually is quickly approved
• The borrower can usually borrow more money that they could with an unsecured loan, which is the type of loan that you would need a good credit score, steady employment, good income to get it.
• If you are turned down for an unsecured loan many times a person can get a secured loan.
• There is not a cap on how much a borrower can borrow.

Cons

• What the borrower used as collateral is at risk if they cannot pay the loan back in the time agreed upon.
• A collateral loan is not available to just anyone as you will need to own a vehicle, house, or another piece of property that can be used as collateral and if you do not have any of the three you cannot get this type of loan.

As you can see there are more pros than cons when considering a collateral loan but do make sure that you do not borrow more than you can pay back.

 

Find an Appropriate Hard Money Lender

Hard Money LenderFind out a hard money lender is not a tough work. The internet can help you most about it. The tricky part is finding out a hard money lender that has low rates, a lender in your local market and is experienced. Many lenders charge more than 15% so it is important to find out a perfect one.

There are great hard money lenders available, but they are not always very easy to find. There have many companies that call themselves hard money lenders and most do very small lending. Maximum lenders are also localised to one state or even one area where they understand the market. However, there have some bigger lending companies that work in many regions and have smaller rates that a typical lender may have.

How does It work?

These loans are not coming from banks. In this loan situation, a company borrows fund from investors and then lends that amount to other investors searching too but real estate at a higher rate. The investors who lend money to the lending company wants to see a good return because of the risk. The lender then has to charge the real estate investor a higher interest rate to make any fund. With a hard cash lender, you will find rates in the 14 to 18% range, along with they will charge from 2 to 5 points on the loan.

Why Investors Pay So Much?

The reason investors are showing interest to pay such high rates on this type of loan is that they have no other option. It is very difficult to get short-term financing from a traditional lending company like a bank, and that is what this loan is for. The loan program is very good for six months to 1 year, where bank lending may be good for around 30 years. Many lenders will also allow investor put less than 20% down payment on properties where banks will not.

How Find A Cheap Lender?

Many of hard money lenders will charge 15% or more, but still there are many lending companies offer affordable rates for debtors. The reason these companies can charge less to the real estate investors is that they are getting more money from larger investors who do not need as high of returns as the smaller individual investors. Many hard cash lenders have rates as low as 11% with 2 to 4 points. Getting bellow 12% with any lending company is going to be difficult. Below are hard money lenders that lend in many states and have good rates for hard loans.

Find A Local Lender

If you like to work with a local lender, you should be careful who you deal with. Referrals are the best option always to find a reputable partner. Here a few process to find some good hard fund lenders. At first, you should ask around at a local real estate investor meet up. Many times lenders will sponsor as well as speak at the meeting. You can ask your real estate agent or a lender if they know any lending company. There also have a chance they don’t know any lender, but it does not hurt you if you ask. You can also check online to find out a real estate investor. When you are searching online, be careful because there has many fraud lending companies are available in the market.

This loan program can be an excellent way to flip houses and expand your returns when flipping by using less of your fund. Hard fund can also be used to buy a rental asset and then be refinanced. Finding the right lender can be challenging work, and if you select the right one, it can cost your deal.