Pros and Cons of a Reverse Mortgage
A reverse mortgage is a loan that you can apply against the equity in your home. It enables a qualified older homeowner to withdrawal part of equity in their home. The equity can be withdrawn and paid to the homeowner in a lump sum or in monthly payments to help supplement their income. The Housing and Urban Development (HUD) agency insures the most common reverse mortgage program through the Federal Housing Administration (FHA). The FHA reverse mortgage is named the Home Equity Conversion Mortgage (HECM). The HECM does not require homeowners to repay the reverse mortgage, unless they no longer occupy the house, become delinquent on the property taxes or home insurance, or they fail to meet the obligations of the mortgage.
The eligibility qualifications for the HECM are very simple. The homeowner must be at least 62 years old and have an acceptable equity position in their primary residence. The primary residence includes any FHA approved property: single family residence, multi-family 2 to 4 unit dwelling (one unit occupied by home owner), HUD approved condominiums, or manufactured homes. There are no income or credit requirements for this mortgage program. Eligible homeowners must also complete counseling with a HUD approved and accredited reverse mortgage counselor. The counselor would review all aspects of the reverse mortgage program and how this mortgage type will specifically help the homeowner(s) based on their equity position. The mortgage typically does not have to be repaid until the last surviving homeowner moves out of the property. If the homeowner does not maintain the property as their primary residence for a 12 month period, the mortgage will be due.
The maximum mortgaged amount is calculated from the appraised value of the property, homeowner(s) age (youngest homeowner), interest rate (fixed or variable), equity position, and FHA lending limit for the county the home is located in. These factors will determine how much equity is available to the homeowner(s) to receive in a lump sum, equal monthly payments for as long as the homeowner lives in the home, line of credit, or monthly payments over a set period of time.
Homeowners retain ownership of their property and are not required to make any monthly payments. Even if the value of the home decreases, the homeowner is not held liable because a reverse mortgage has a non-recourse provision. This means that HUD and the lender share the risk on the future value of the house, not the homeowner. Although, HUD does require the home to be maintained in acceptable condition to retain its value.
Reverse mortgages have minimal fees for qualification, processing, and approval. These costs can vary by lender. Service fees may also be charged to homeowners who choose their equity to be paid to them in monthly payments. For additional information on the reserve mortgage program, please contact a local HUD approved lender.
Buying a home is not easy especially in today’s expensive market scenario. After all, homes are not cheap and you may not always have the cash handy to buy the property that you desire. Given this situation, home loans are an excellent option. Additionally, paying rent or paying an EMI comes with the same amount of financial stress. However, the end result is different. When you are paying an EMI, you end up becoming owners of the home. This is what makes home loans a preferable choice for thousands of aspiring couples as well as bachelors.
But, before you apply for a home loan, you need to familiarize yourself with the different types of home loans. Usually, this information can be procured from bank or financial institution’s representative. In fact, if you are feeling lazy enough to make the call or walk in to the nearest branch, the internet is always there to bail you out. Do a simple search and you will be able to get a rough idea.
Meanwhile, here is a brief preview to help you understand it better:
Fixed rate home loans: Every loan comes with a rate of interest. However, when customers opt for a fixed rate home loan, it means that during the tenure of the loan, the rate of interests will not change irrespective of the external economic scenario. This could be advantageous in cases when the economic turbulence could lead to interest rates peaking. But in cases where the interest rates are going to drop considerably, opting for a fixed rate home loan could prove to be heavy on your pockets.
Variable rate home loans: This is the ideal option for people who have an excellent foresight and are able to predict the economic scenarios with surprising accuracy. As part of the terms of this loan, the applicant is charged according to a changing rate of interest. This change is dependent on the prevalent market scenario.
Land purchase loans: If you are buying a plot for constructing a new house, the land purchase loan works well. Most banks are willing to provide up to 85% of the amount as loan.
Flexible tenure plan: As part of this option, the bank will lend you the amount and allow you to choose the preferred repayment tenure. In some cases, the bank also offers option where the repayment starts after a certain period like six months or one year.
Phantom and Sarah are pit bulls who found themselves in two separate shelter with dismal prospects for adoption.
Pit bulls are at the highest risk for euthanasia in the United States. They don’t get a second chance as often as other breeds. The controversy surrounding the pit bull breed has resulted in real world consequences for many of these dogs. Thankfully, these two rescued pit bulls got a second chance at life thanks to some very thoughtful police as well as two organizations with a focus on giving purpose to dogs who would otherwise be facing euthanasia.
The two amenable pit bulls were rescued from their respective shelters and were trained to become K9 dogs for the Clay County Sheriff’s Office in North Carolina.
The officers in the department decided that the two pit bulls deserved a chance rather than being judged and sentenced to death for nothing more than their breed.
The Clay County Sheriff’s Office talked about some of the reasoning behind their decision in a post on Facebook:
“Departments do not need to spend $15-$20,000 for a pure breed German Shepard or Belgian Malinois to search and find illegal drugs, at the same time giving dogs destined for a life in a shelter or euthanasia a second chance at life serving Law Enforcement Officers and Departments around the country.”
They would be saving the lives of the dogs, saving the tax payers money, and getting two excellent new K9 dogs. There really was no losing in the situation.
They found Phantom in a shelter in Texas. Sarah had just spent an entire year in a shelter in New York. Both dogs are now trained in narcotics detection.
They will never be involved in the direct apprehension of suspect.
Animal Farm Foundation and Universal K9, the organizations involved in getting these dogs into the Clay County Sheriff’s Office K9 program, do not allow their dogs to train in apprehension or bite work. They want to showcase the other talents that pit bulls have and highlight their kind nature rather than risking further damaging the reputation of the breed.
The Sheriff’s Office has had only positive things to say about their experience with the two organizations:
“The Clay County Sheriff’s Office would like to express their great gratitude to Animal Farm Foundation and Universal K9. Had it not been for their great work both Sarah and Phantom may still be looking for their forever homes.”
A Close Call
Another dog, Storm, in the same class as Phantom and Sarah, was rescued from the shelter just one day before she was scheduled to be euthanized. She is now a narcotics dog in the Red Oak Independent School District where she serves with School Resource Officer John Julin.
That’s a close call and a very good dog that came very close to being lost for good.
Too many pit bulls do end up lost to the world when they remain unadopted and are still in the shelters on the day they are scheduled to be put down.
Organizations such as Animal Farm Foundation and Universal K9 hope to change that, one dog at a time.
If their work with Phantom and Sarah is any indication, we think they are already doing a phenomenal job.
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