Registered Rep, a magazine for professional financial planners and stock brokers, recently highlighted how a reverse mortgage could be used to purchase a new home. Reverse mortgages are receiving more and more coverage in the financial planning community and many planners are learning about the benefits these loans offer their clients. In “The New Reverse Mortgage Magic,” Registered Rep explained how a senior citizen could buy their new retirement home without adding a monthly mortgage payment to their budget. Financial planners have long known that reverse mortgages, or Home Equity Conversion Mortgages (HECM), can be used by home owners over the age of 62 to unlock the equity they have in their primary residence. The amount they can access depends on the homeowners’ ages and the val...

Editor’s Note: This article has been re-written since it’s original publication. Thanks to the readers below who brought to our attention some good points about some of our wording. We hope the edited versions helps clarify our position a bit on the HECM For Purchase Program. -Ed No money down loans were a popular idea several years ago. Speculators were able to buy homes with no money down and they were even able to get cash back at closing. In hindsight, we now understand this was reckless. Home prices were in a bubble and rising beyond their true value. Markets tend to go too far in both directions and after home prices got pushed too high, they seem to have been pushed down too far in many parts of the country. The population is growing, keeping up with supply There should...

The Reverse Mortgage for Home Purchase on-line calculator is now available on the Legacy Reverse Mortgage web-site (http://www.legacyreversemortgage.com/reverse-mortgage-for-purchase).   One simply puts in the State and city where the home is going to be purchased, age of the potential borrower and amount available as a down payment.   By hitting the “Calculate your Estimate” button, the approximate maximum value of the home one wishes to buy is shown.  For instance, if a 74 year old senior is looking to purchase a home in CA and has $125,000 available for a down payment, the senior could be looking for a home valued up to $368,800. The other choice is where the senior has found a home or range of home values that she or he would like to purchase.  In that case, one would put in ...

Until last year, single family home rental properties were generally owned by individual investors. Some of these investors might own multiple properties, but most rentals have been managed by the property owner. All that could be changing after home prices have fallen in the past few years and some large investors believe that the potential investment returns have become too good to pass up. Now, according to Bloomberg, institutional private equity investors are bringing hundreds of millions of dollars to the rental home market because of the attractive returns that are possible. Income properties can offer high yields and provide current income for these institutions. College endowments, hedge funds and large private equity firms are among the recent market entrants. This is a positive s...

The FHA Reverse Mortgage for Home Purchase Seminar has been approved by the California Department of Real Estate effective February 13th.  This 3 Clock course (Certificate Number 5004-1001) is being offered to all Real Estate Professionals under the “Consumer Service” category.  This continuing education offering is being presented by Ken Keranen, a Reverse Mortgage consultant who has 18 years of experience in the field representing Legacy Reverse Mortgage. With more than 10,000 Americans turning 62 every day and the prices of homes bottoming out, learning about this option could not be timelier.  The course covers how real estate agents can make more sales  by introducing seniors to this method of financing. The course includes: The basics of Traditional Reverse Mortgages Reverse...

Morgan Stanley looked at the returns available to owners of rental properties and found that this often overlooked investment class beat stocks over the past twenty years. The Wall Street analysts reported that single-family homes operated as rentals delivered annual returns averaging 8.1 percent since 1990. Over the same time period, the S&P 500 gained just 6.1 percent a year on average. Looking ahead, there are several trends that indicate the residential rental market should continue to deliver steady returns. The Census Bureau reports that the number of home owners has been declining and will probably continue falling for some time. Nationally, the home ownership rate has fallen to 66 percent at the end of 2011, down from a high of 69.2 percent in December 2004. This means a larger...

Many homes are selling at a steep discount to what they would be worth under normal market conditions. These low prices make the discounted homes a good buy, even though now seems like the worst possible time to buy if you follow the news. Some of the investors avoiding real estate right now are the same ones who buy stocks when they become cheap. Warren Buffett has made billions of dollars for himself and investors in Berkshire Hathaway by “buying when others are fearful.” When it comes to real estate, many investors are fearful, worried that the six-year decline in prices will last even longer. Following Buffett’s advice, this could be the time to buy. Six years is actually the average length of a real estate crash. Economists Carmen Reinhart and Kenneth Rogoff studied a variety ...

Many condominium developments around the country have lost their eligibility for Federal Housing Administration (FHA) financing, which could make it much harder to sell units in those projects. This is due to several changes in rules that have been released in response to the housing crisis. The US Department of Housing and Urban Development had previously required that completed condo projects only needed to apply for approval one time and the certification would remain in effect for the life of the project. But in the wake of the housing crisis, HUD began requiring renewals on all condo projects every two years. In order to obtain approval, no more than 15 percent of units in a development can be delinquent 30 days or more on their association fees. In addition, at least half of the unit...

One of the biggest issues facing retirees today is longevity risk. There is a very real possibility that most average seniors could easily outlive their money. Time magazine recently noted that, “In 1900, life expectancy at birth was 47. Today it is 76, and if you are already 65 you should make it to 85.” Retirees have a good chance of living 20 years after they stop working, but recent financial market setbacks leave many financially unprepared for that scenario. MetLife recently released the results of their Retirement Income IQ Survey and found that planning for retirement income is becoming a more an important consideration for individuals nearing age 65. Almost 90 percent of respondents said that they have taken some steps to secure their retirement income and almost two-thirds ha...