Pay Half Price To Buy a House

 PAY HALF PRICE TO BUY A HOUSE

…And never pay another penny until you move out or pass away. Too good to be true? Not if you use an FHA Home Equity Conversion Mortgage for the Purchase of the home available for people over age 62. The purchase is closed after an FHA appraisal to verify the house is worth what you offered and you show your down payment of 50% with the funds from the mortgage are sufficient.

There are no further monthly mortgage payments required. You must take possession and move into the home within 60 days of closing. The funds you use for your down-payment must be your own funds, or a gift from a relative (not borrowed funds).

This mortgage is a reverse mortgage in that you do not have to make mortgage payments out of your pocket, however, the cost of the mortgage is assessed against the house which means your equity gradually declines as you age. Because the mortgage is insured by FHA, regardless of how long you live, the house remains in your name and may be left to your heirs, who can decide what to do with it just like any other house with a mortgage.

Example:

Sell your house for $200,000 and payoff any loans and your realtor using $20,000

Your net proceeds from the sale would be $180,000

Purchase a new home at a sales price of $200,000

Put down 50% ($100,000) of the sales price and use the Home Equity Conversion Mortgage $100,000 to close the purchase

Keep your remaining $80,000

Questions? Want more information as to how I can help you pay half price for your next house? Call me, Julia Atherton, at 502-426-7840 right now!

Increasing Cash Flow

Would you would find it advantageous to have a fund for emergencies, long term care, protection from inflation, or just to maximize your monthly cash flow? With a HECM reverse mortgage you can have an available safety net or additional funds every month to spend, consisting of the payment on any traditional mortgage which would go away, or the additional funds added to the credit line which accrues. Cash Flow maximizers don’t anticipate selling their home and the size of their estate is not important. The availability of funds and the potential for increased cash flow may outweigh the decline in wealth resulting from any growth of the reverse mortgage balance.

Call Julia at VanDyk Mortgage today at 502-426-7840 or visit www.mymortgagelouisville.com

Reverse Mortgages Help You Increase Cash Flow

Are You Thinking of Paying off Your Home Mortgage?

If you have a traditional mortgage and continue making payments, the balance would be paid down somewhat in 10 years which could deplete your cash or retirement funds. If you pay off the balance now with the proceeds from an adjustable rate HECM, in 10 years you will owe more because you have received the benefit of keeping the payments in your retirement funds. Which is least costly to use to make your traditional mortgage payments: your retirement funds or reverse mortgage?

If the percentage of growth in your retirement funds is more than the interest charged on the reverse mortgage, you could preserve wealth by using the reverse mortgage funds. But an annual premium of 1.25% for FHA mortgage insurance must be calculated in the interest cost.

If the percentage of growth of your retirement funds is less than the cost of the reverse mortgage funds, using retirement funds to pay down your traditional mortgage debt is less costly.

You will benefit from the appreciation in the house in either case. But also consider whether you itemize tax deductions. How much do you really benefit from the mortgage deduction? Or do you take the standard deduction anyway? Unless you make payments on the reverse mortgage, there is no interest paid so there is no deduction. Most people do not make payments and interest ordinarily is not paid until the borrower dies or moves out of the house, at which time it may or may not be deductible.

If you are near retirement age and you are looking to build wealth and maximize cash flow, the HECM Reverse mortgage could be a perfect tool for you to use.  Call Julia today at 502-426-7840 or visit her site at 

My Mortgage Louisville 

Wealth vs Cash Flow

WEALTH vs CASH FLOW:

Which is the most important?

Building Wealth

Will using a reverse mortgage maximize wealth? If you want to leave as large an estate as possible, setting up a reverse mortgage credit line without using it may accumulate available credit faster than the house appreciates and could eventually be worth more than the house. The growth is guaranteed by the contract at the same rate as is on the note for any funds used. This strategy may also eliminate the expense of long-term care insurance by providing a substantial fund with no monthly premiums.

However, if you are looking ahead to selling your house in the future or already have a mortgage on the house, using the credit line or paying off the mortgage with the proceeds of a reverse mortgage could reduce wealth – unless you can preserve retirement funds that were being drawn down to pay the mortgage.