New Year Bringing Changes and Higher Rates

Rates are on the rise as we head into a new year. For the last couple of weeks we have seen both forward and reverse mortgages swing upward. No longer are analysts talking about lower rates. The push is for an improved economy and that can only be accomplished if companies are getting more profits (that's more interest, for those with mortgages).
Overall, rates are still historically low and now is a great time to check on what is available for your own personal situation. Whether a reverse mortgage will benefit you or not all starts with getting an free analysis from a good reverse mortgage originator.
More changes are coming next year and I will keep you informed as we move ahead.

More Lenders Offering HECM Purchase Loans

Although there was a slow start to lenders offering the ability to purchase a home using a reverse mortgage, the industry is now coming on board with the idea of offering this unique loan program. Many seniors thinking of making a housing change and not wanting a mortgage have previously only been able to buy using the cash they had on hand or had within the equity of the home they were selling.
A HECM purchase loan allows a home buyer to buy a home with no mortgage payment. The money used for down payment is matched with the available reverse mortgage benefit allowing for either an ability to not use all your money or use all your money and buy more home. Check out WashingtonReverse.com for details on this great home buying loan program.

New Pamphlets Issued

Updates for many of the reverse mortgage handbooks and guides for information have now been published and are available. These publications are designed to more easily explain how a reverse mortgage can benefit the senior home owner:
Reverse Mortgage Loans - Borrowing Against Your Home (An AARP Publication)
Just the FAQs: Answers to Common Questions About Reverse Mortgages (A NRMLA Publication)
The NRMLA Guide to Aging in Place (A NRMLA Publication)
All of these publications should be read before you go to or call for your counseling session. Locations for counseling can be obtained be visiting http://www.washingtonreverse.com/ and clicking on "Counseling".

WARNING: 2010 Census Cautions from the Better Business Bureau

Be Cautious About Giving Info to Census Workers

With the U.S. Census process beginning, the Better Business Bureau (BBB) advises people to be cooperative, but cautious, so as not to become a victim of fraud or identity theft . The first phase of the 2010 U.S. Census is under way as workers have begun verifying the addresses of households across the country. Eventually, more than 140,000 U.S. Census workers will count every person in the United States and will gather information about every person living at each address including name, age, gender, race, and other relevant data.
The big question is - how do you tell the difference between a U.S. Census worker and a con artist? BBB offers the following advice:

**If a U.S. Census worker knocks on your door, they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice . Ask to see their identification and their badge before answering their questions. However, you should never invite anyone you don't know into your home.

** Census workers are currently only knocking on doors to verify address information. Do not give your Social Security number, credit card or banking information to anyone, even if they claim they need it for the U.S. Census.

While the Census Bureau might ask for basic financial information, such as a salary range, the Census Bureau will not ask for Social Security, bank account, or credit card numbers nor will employees solicit donations.

Eventually, Census workers may contact you by telephone, mail, or in person at home. However, the Census Bureau will not contact you by Email, so be on the lookout for Email scams impersonating the Census..

Never click on a link or open any attachments in an Email that are supposedly from the U.S. Census Bureau.

For more advice on avoiding identity theft and fraud, visit http://www.bbb.org/ .

SHARE THIS INFO WITH FAMILY AND FRIENDS..

HUD Gets Ready to Axe Benefit Amount

Just when seniors have seen equity pour out of their homes through reduced values, HUD in all their wisdom decides to reduce the principle benefit amount by approximately 10% for all new transactions after Oct. 1st.
This information just came across our desk about 3pm. As it stands now, I am advising anyone thinking of doing a reverse mortgage to get started on their application. Of course, your senior counseling will have to be completed first.
This is a true shock to lenders and analysts are predicting that it will adversly affect about 21% of seniors doing reverse mortgages by having them possible have to bring additional money to the closing table just to pay off their existing mortgage.
My advise = contact your Senators and U.S. Representatives and sound off! I will post details as I get them.

Buy a Home Using a Reverse Mortgage

If you are planning on buying a new home, HUD has now introduced a Reverse Purchase mortgage. This HECM loan provides a maximum benefit based upon age and sales price and delivers a reverse mortgage with no monthly payments. Here is an example:

1. You plan on selling your home and want to downsize - The sale of your existing home is going to net you about $180000. You had planned to use this all to buy your new $180000 home. You are 72 years old. Instead of paying all cash, you find out your maximum benefit for a Reverse Purchase is about $88700. You put down $91300 and keep the $88700 working for you in other investments. No monthly payments!
2. You want to buy a second home to use as a vacation home. You use a normal reverse mortgage on your existing residence and with the lump-sum of equity you get, you go and pay cash for your vacation home.
3. Things have changed in your life and you need to up-size your home because it is too samll to accomodate the live-in help you want to have. You use the proceeds from the sale of your home; let's say that same $180000 as in example #1, and you use it all and add a reverse mortgage to it to come up with the ability to buy a $360000 home with still no monthly payment! Your reverse benefit allowed you to put the $180000 down and have a Reverse Purchase mortgage for the remainder.

The above examples were all estimates using the age of 72 and existing HECM interest rates. As each age is different and rates change, you need to find out what you purchase abilities would be by getting a maximum prinicple benefit analysis so that you can determine how this program will help you. Visit http://www.Reverse4HomeBuying.com for details.

Rethinking Your IRA Distribution

The start of this year presents a perfect time to review and possibly begin to rebuild your retirement account. Having to take a mandatory distribution means cutting into your already decimated IRA values.

In an effort to prevent having to sell stocks in your IRA to take your yearly distribution, there is now new legislation which suspends the 2009 requires distribution from your qualified plans. At age 70 1/2, you normally have to begin to withdraw from your account. This taxable event also applies to Inherited IRA Beneficiaries regardless of age.

Congress has made the decision to waive this required "pull-out" for 2009 to give seniors the opportunity to not have to sell investments during this down market. A chance to rebuild some of their assets.

But what if you need the money to live on. If you have not already educated yourself about reverse mortgages, now may be the time to do so. A reverse mortgage could provide needed income during this time, giving you an opportunity to not have to pull monies from your retirement accounts. Of course, the key to good planning is to stay informed and educated about what is available to you.

Check with your financial adviser about the new legislation and how it could help and learn about the potential benefits of a reverse mortgage. You can get a lot of information at WashingtonReverse.com and you can even find out your maximum reverse mortgage benefits using their calculators.