Retirees concerned about their decimated savings should take a second look at reverse mortgages. Beginning November 1, 2008, homeowners everywhere may borrow up to $417,000. Previously, the Home Equity Conversion Mortgage program assigned various lending limits, ranging from $200,160 in rural areas to $362,790 in the most expensive housing markets. Existing reverse-mortgage borrowers may be able to refinance their loans to take advantage of the higher lending limit. Plus, the new rules cap the origination fee, previously set at 2% of the loan value, at $6,000.
Retirees will be able to use a reverse mortgage to buy a new home starting in 2009.
With a reverse mortgage, homeowners 62 or older can tap the equity in their home in the form of a lump sum, line of credit, monthly payout or a combination of all three. You retain the title to your property and must continue to pay property taxes, insurance premiums and home-maintenance costs. Payouts are tax-free, but the income you receive may make you ineligible for certain state and federal benefits, including Medicaid, which is a major payer of nursing-home costs.
A reverse mortgage need not be repaid until the last homeowner moves out or dies, at which point the home may be sold to pay off the debt. Interest and fees accrue over the lifetime of the loan and could wipe out any remaining equity. But the loan-repayment amount may never exceed the market value of the home; even if home prices decline, your heirs cannot be held responsible for any shortfall.
Reverse mortgages also have a dark side. In recent years, some unscrupulous lenders have pressured elderly borrowers into using their newfound cash to buy annuities and other financial products that imposed high fees and limited access to their money. The new rules prohibit lenders from requiring reverse-mortgage borrowers to purchase additional products or services as part of the loan agreement.
In a recent investor alert, the Financial Industry Regulatory Authority, or Finra, warned seniors to consider all of their options carefully before committing to a reverse mortgage. "Home equity is often a homeowner's most valuable asset and most precious source of retirement security," the Finra alert states. "Consider all the risks and explore all of your options before taking out a reverse mortgage, and even then, use the loan funds wisely."
Comment -- Finally - at Long Last - Mortgage Rates to Come Down! Everyone had thought that just by bailing out Fannie and Freddy and guaranteeing those instruments - that rates would come down. But they only came down in the few days after that govt action - and then went back up again - and stayed up - until recently - when they have been trending down. Now - rates should trend down even more -- something that has been needed for a long long time to bring more buyers into the market for housing.
Excerpt from a Yahoo Finance Article --
Total bailout commitments, loans and pledges of backing has now neared a staggering $7 trillion. (almost half the US GDP)
(comment - unreal eh?)
Treasury Secretary Henry Paulson, who has been criticized for constantly revising the original $700 billion rescue program, said the administration was considering even more changes in its final two months in office.
Reports on the nation's economic health weren't getting any better. The Commerce Department said the overall economy, as measured by the gross domestic product, declined at an annual rate of 0.5 percent in the July-September quarter, even worse than the initial 0.3 percent estimated a month ago as consumer spending fell by the largest amount in 28 years.
The Federal Reserve will purchase $200 billion in securities backed by different types of debt including credit card loans, auto loans, student loans and loans to small businesses. That market essentially froze in October. These types of loans as a result have become harder to obtain and have carried higher interest rates
The Fed also announced that it would spend $500 billion to purchase mortgage-backed securities guaranteed by mortgage giants Fannie Mae and Freddie Mac and another $100 billion to directly purchase mortgages held by Fannie, Freddie and the Federal Home Loan Banks.
This would greatly expand an initial modest effort announced back in September in which Treasury spent $26 billion to purchase mortgage-backed securities. The current credit crisis was triggered by soaring losses on securities backed by subprime loans.
******Analysts predicted the program could send mortgage rates down by as much as one-half to a full percentage point in coming months, helping to spur demand in the beleaguered housing market, which is suffering its worst downturn in decades.
The programs to buy mortgage-related assets and securities backed by consumer debt have the same aim: to boost demand for those assets. In doing so, the government hopes to lower the costs being charged for consumer loans. That would make loans on everything from mortgages to cars more available.
This is one of the key actions we've been advocating," said Charles McMillan, president of the National Association of Realtors, referring to the purchase program for mortgage-backed assets.
As for Tuesday's actions, the mortgage-backed securities the Fed will buy will be investment-grade assets -- not the toxic mortgage-related assets that the administration initially had said the $700 billion financial rescue program would buy.
By focusing on investment-grade securities, the Fed will be able to help provide a functioning secondary market. It will pay the prices for these securities that are being set by the market. Had the Fed needed to buy bad assets, it would have had to develop a mechanism to properly price assets that weren't being traded.
The use of Fed resources also gets around another problem Treasury faced: a limited amount of money in the program. The $800 billion being committed to buy mortgage-related assets and other assets backed by consumer loans will come from the Federal Reserve's vast resources. It will not count against the $700 billion rescue program.
The Treasury Department also announced Tuesday that the rescue program had spent another $2.91 billion in direct purchases of stock from 23 regional banks around the country. These institutions ranged from HF Financial Corp. in Sioux Falls, S.D., to Centerstate Banks of Florida Inc. in Davenport, Fla.
The government has now injected $161.5 billion in 53 institutions. The goal is to spend $250 billion of the $700 billion bailout fund to buy bank stock as a way of encouraging banks to resume more normal lending to bolster the shaky economy.
Lots of people were at the CEDA headquarters in Mount Prospect Monday, seeking assistance from the nonprofit community organization.
Local high schools collecting donations to give hungry families a real Thanksgiving dinner came to the rescue this week.
CEDA, the Community Economic Development Assistance group, is challenged by a surge in people who can't pay for food even as obtaining donations grows more difficult.
"There are a lot of people who've never been there before," according to the head of the organization.
The stagnant economy, increased cost of living, and job cuts are resulting in a 30 percent boost in demand, according to the Northern Illinois Food Bank, a charitable agency based in St. Charles that assists 13 counties, including DuPage, Kane, Lake, McHenry and Will.
The Greater Chicago Food Depository, which serves Cook County, also reported 33 percent more families and individuals asking for help. And suburban Cook County food pantries are reporting a 50 to 90 percent increase in visits compared to a year ago, a survey indicated.
Community organizers noted that many people crowding into their facilities have just lost their jobs.
Local YMCA's are taking food donations. If you know of other places that are - feel free to post them below.
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As Exclusive Buyer Agents - we provide expert research and negotiation for home buyers and investors in the Chicago area. Unlike "buyer agents" - we are specialists -- always 100% on the buyer's side.... NEVER EVER REPRESENTING SELLERS! If you are thinking about buying / purchasing a home in the Chicago Illinois area, you will want to ensure that you have an agent that is on YOUR side – looking out for your best interests.
Relocation Advisors Group, Inc. represents BUYERS ONLY in the Chicago metropolitan area so that you have 100% representation - 100% of the time. SEE MORE TYPES OF PROPERTIES - including for-sale-by-owner, short-sale and foreclosure etc. We show ALL listings suiting your needs - from ANY Real Estate company.
If You Become our Client - We Tell You About the Negatives of a Home - Not Just the Positives. You Have an Unbiased Consultant and Advocate and "Personal Real Estate Coach" on Your Side.... Best of All - You are Nothing Out of Pocket to Us For Our Services... Please Call 847-566-7558 or Toll Free at 866-493-2842 or e-mail us at info@relocationadvisorsgroup.com to schedule a complimentary initial consultation.
If you have excellent credit and are thinking about buying a home in the Chicago Illinois area during the next 60-90 days:
The Kane county board, on Monday, approved the final version of the application it will send to the federal government in hopes of capturing all the money it is in line to receive as a side benefit of the Fannie Mae/Freddie Mac bailout earlier this year. The idea for the money is to use the cash to turn foreclosed property into "affordable" housing, based on local income averages.
Organizations are lobbying the Kane County Board to make their case for a large chunk of the nearly $2.6 million in federal bailout funds the county expects to receive in coming months.
Carpentersville is at the top of that list as it has the worst problems with foreclosures, subprime mortgages and local unemployment. Both Carpentersville officials and the Realtor Association of the Fox Valley agree with that priority.
Local mental health and developmental disability organizations are banding together in a call to use a large chunk of the money to build group homes throughout the county. Service organizations that work with the mentally ill and disabled say there is a waiting list of more than 800 people seeking affordable housing that services their health needs and income limitations.
As Exclusive Buyer Agents - we provide expert research and negotiation for home buyers and investors in the Chicago area - covering both downtown and many Chicago suburbs. Unlike "buyer agents" - we are specialists -- always 100% on the buyer's side.... NEVER EVER REPRESENTING SELLERS! If you are thinking about buying / purchasing a home in the Chicago Illinois area, you should ensure that you have an agent that is on YOUR side – looking out for your best interests.
Relocation Advisors Group, Inc. represents BUYERS ONLY in the Chicago metropolitan area so that you have 100% representation - 100% of the time. We show more types of properties. Besides all MLS listed properties by any company - we show for-sale-by-owner, short-sale and foreclosure properties, properties that aren't advertised, and much more.
If You Become our Client - You Can Be Assured That We Tell You About the Negatives of a Home - Not Just the Positives. You Have an Unbiased Consultant and Advocate and "Personal Real Estate Coach" on Your Side....(Not a "Salesperson") Best of All - You are Nothing Out of Pocket to Us For Our Services... Please Call 847-566-7558 or Toll Free at 866-493-2842 or e-mail us at info@relocationadvisorsgroup.com to schedule a complimentary initial consultation.
If you have excellent credit and are thinking about buying a home between $250,000 to $2 million in the Chicago Illinois area during the next 60-90 days:
Police tried to get the resident's attention through a window, but there was an explosion almost immediately. Hope the cops had hearing protection...
As Exclusive Buyer Agents - we provide expert research and negotiation for home buyers and investors in the Chicago area - covering both downtown and many Chicago suburbs. Unlike "buyer agents" - we are specialists -- always 100% on the buyer's side.... NEVER EVER REPRESENTING SELLERS! If you are thinking about buying / purchasing a home in the Chicago Illinois area, you should ensure that you have an agent that is on YOUR side – looking out for your best interests.
Relocation Advisors Group, Inc. represents BUYERS ONLY in the Chicago metropolitan area so that you have 100% representation - 100% of the time. We show more types of properties. Besides all MLS listed properties by any company - we show for-sale-by-owner, short-sale and foreclosure properties, properties that aren't advertised, and much more.
If You Become our Client - You Can Be Assured That We Tell You About the Negatives of a Home - Not Just the Positives. You Have an Unbiased Consultant and Advocate and "Personal Real Estate Coach" on Your Side....(Not a "Salesperson") Best of All - You are Nothing Out of Pocket to Us For Our Services... Please Call 847-566-7558 or Toll Free at 866-493-2842 or e-mail us at info@relocationadvisorsgroup.com to schedule a complimentary initial consultation.
If you have excellent credit and are thinking about buying a home between $250,000 to $2 million in the Chicago Illinois area during the next 60-90 days:
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Are you buying a $250,000-$9,000,000 Home in the Chicago area within 90 days? Then you need to meet with us to compare the difference. Call 847-566-7558 or e-mail info@relocationadvisorsgroup.com
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