Reverse Mortgage – Hawaii Reverse Mortgage

Important Facts About Hawaii Reverse Mortgage

uring their retirement years, many Hawaii senior homeowners often find themselves struggling to make ends meet. Currently, close to a third of all retirees are getting more than ninety percent of their monthly income from Social Security.

However, individuals who have adequate equity in their home are able to supplement their Social Security income by using the proceeds from a reverse mortgage.
The reverse mortgages derivesits name based on the fact that instead of making a monthly mortgage payment where the balance goes down each month, there is no monthly mortgage payment made therefor the balance goes up because the interest is accumulating

By working with a reverse mortgage lender in Hawaii, retirees are in a position to tap into their home equity without having to expose themselves to the risk that comes with the usual mortgage. Additionally, they are not exposed to the process of offloading their property and having to move into smaller or less expensive housing. Instead, the senior can stay in the comfort and safety of their family home.

Before making the decision on whether to apply for a reverse mortgage, it is imperative to know what it is you are getting into. Below are facts that any person considering a reverse mortgage needs to know:

Hawaii Reverse Mortgages Come With Different Payout Options

As a retiree in Hawaii, you will be provided with a variety of payout options, all designed to allow you to tap into your available home equity.
For instance, the Federal Housing Administration will provide you with five diverse payment plans. You can choose to take equal monthly payments, which will run for as long as you remain alive, and as long as you remain in your home. You may also opt to go for one that comes with a fixed term (years), after which you will immediately stop receiving the payments, even if you are still residing in your home.

You could also be provided with a flexible credit line, which allows you to make a decision on the amount you would like to receive, and when you would like to take the money out. Or you can take a lump sum of cash. Or you may opt to take a combination of these.

The Reverse Mortgage Will Only Provide a Portion of the Available Home Equity

The Hawaii reverse mortgage will not provide you with access to all your available home equity. Instead, the Federal Housing Administration will make calculations on your total mortgage amount based on the home’s appraisal value, theage of the current youngest borrower, and the prevailing interest rates.

Additionally, you will also need to pay the reverse mortgage costs, which include third-party lender expenses, servicing, and origination fees, as well as mortgage insurance premiums.

In many cases, the lender will work these costs into the amount that they have made available to you, and this will further reduce your net proceeds.

To find out how much you qualify for, and whether a reverse mortgage is right for you, consult the author of this article to discuss the pros and cons. For more information you can also visit: www.AlohaMortgageSolutions.com. There you will find two short video’s, one title “Reverse Mortgages Explained;” and the other, “Testimonials of Real Hawaii Clients.”

For a FREE, no-obligation quote, contact Daniel Nicolosi at Harbor Financial Group – Your Aloha Mortgage Solution in Honolulu. You can reach him directly at (808) 799-8218 on Oahu; or Toll Free at 888-423-2468 from the Neighbor Islands. Within 10 minutes he can tell you how much you are eligible for.

“YOU’VE INVESTED A LIFETIME, NOW REAP THE REWARDS!”

How You Can Make Use of a Hawaii Reverse Mortgage as a Financial Planning Tool

A reverse mortgage was primarily used as a ‘band aid’ to assist seniors in meeting their day-to-day expenses by pulling out some of the equity that they had in their houses. In many cases it was used to divert a foreclosure. It was considered only during times of an emergency.

However, many seniors today that do not need to meet a certain cash-based need, can still take advantage of the numerous benefits provided by a reverse mortgage, by using it as a tool for their strategic long-term retirement planning.

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Below are ways that a reverse mortgage in Hawaii can be a viable financial strategy:

Delaying Pension and Social Security Payouts

There are seniors who may need to utilize payouts from their pensions and Social Security benefits as soon as they become accessible. However, the cash obtained from the reverse mortgage will allow the retiree to delay collecting their pension or social security allowing it to mature.

Postpone Drawing down Your Retirement Assets

It is a move that is designed to allow your assets additional time to grow. The funds you obtain from a reverse mortgagelender will make it possible for you to postpone drawing on your other resources allowing them to fully mature.

Eliminate Monthly Mortgage Payments to Increase Your Cash Flow

Every time you write a check to pay for your mortgage, it takes a sizable chunk from your monthly income. However, when you apply for a reverse mortgage from a lender in Hawaii, the existing mortgage is automatically paid off.

Once it has been paid off, it means that you will remain with extra money in your pocket, which you would have normally have used to pay the monthly mortgage. However, you will still be responsible for paying your property taxes, homeowners insurance and maintenance of your home.

You Get Access to a Line of Credit that is Low Cost, and Non-cancellable

Applying for a reverse mortgage means that you will get access to a line of credit that is ever growing. The line of credit provided by the reverse mortgage grows as time passes.
It basically means that as the years go by, the unused line of credit available to you will be larger than what you initially received.

Protect Your Investment Portfolio When the Market is down

When the stock markets are down, it means that your cash flow, as well as investment portfolio, may not be performing at peak levels.

When you choose to get a Hawaii reverse mortgage, the payment received will be able to provide you with enough protection until the investment markets start to pick up.
To find out how much you qualify for, and whether a reverse mortgage is right for you, consult the author of this article to discuss the pros and cons. For more information you can also visit: www.AlohaMortgageSolutions.com. There you will find two short video’s, one title “Reverse Mortgages Explained;” and the other, “Testimonials of Real Hawaii Clients.”

“YOU’VE INVESTED A LIFETIME, NOW REAP THE REWARDS!”

Why prefer FHA Insured Reverse Mortgage over Single-purpose or Proprietary?

Both a Hawaii reverse mortgage and a home equity loan are commonly used options by older Americans to tap into the equity in their home. If you have owned your home for a long time to be able to pay the balance loan and free up some equity, both loan options can be viable ones to consider for any planned or unplanned expenses in the old age.

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The three types of reverse mortgages are single-purpose, federally insured reverse mortgages and the proprietary. A single-purpose reverse mortgage is offered by the state, local and non-profit agencies, and is considered the least expensive process. Home equity conversion mortgages (HECM) are federally insured reverse mortgages backed by the U.S. Department of Housing and Urban Development. The proprietary type of Reverse mortgage is used generally for a larger advance at a high value.

There is a big difference between a home equity loan and a Reverse mortgage Honolulu. With a home equity loan, you’ll get either an account with a debit card or checks to write against the balance of your approved loan amount. But with a reverse mortgage, you have a choice to get a lump sum payout or a monthly payments.

There are well-defined standard rules to qualify for a reverse mortgage loan. The borrower must be 62 years or more and have significant equity in their home. With an HECM for Purchase, the borrower must have enough money to make the initial investment. With all HECM Reverse Mortgage loans, the owner need to maintain the home and pay the property taxes as well as property insurance. The loan becomes due when the homeowner no longer lives in the home full time or passes away.

There are major benefits of Hawaii reverse mortgage. A Home Equity Conversion Mortgage (HECM) is commonly known as a reverse mortgage. This is a Federal Housing Administration (FHA) insured loan. This type of mortgage loan enables people to access some part of the home equity to obtain funds which are totally tax free. They also don’t have to make monthly mortgage payments. With an HECM loan, borrowers still own their home. These loans can be beneficial for senior homeowners who need extra funds to supplement their retirement income.

The advantages are:

•   You can buy a home that better fits their needs
•   You can move to friends, medical facilities, etc.
•   You can purchase a new home while preserving their cash.
•   You don’t have to pay any monthly mortgage payments for the life of the loan.

Must Read : Hawaii Reverse Mortgage Pros And Cons

The amount of money the borrower can receive with both a traditional reverse mortgage and an HECM for Purchase is based on various factors. The age of the youngest borrower or non-borrowing spouse and the lesser of the appraised value of your home sale price or the maximum lending limit are most important factors. Generally, if the borrower is older, then he / she will be eligible to receive more money. It is important to know that only specific individuals meeting the terms and conditions will qualify for the Reverse mortgage loans.

HECM Reverse Mortgage: Does It Affects The Social Security And Other Benefits?

HECM reverse mortgage, a viable option for the seniors that make their retirement relaxed. Indeed. But retirees do have some common concerns regarding the taxes and reverse mortgage solution. You know everything has its pros and cons and it is always better to get them clarified in the very beginning itself to prevent future confusions. Most of the seniors have this question in mind that whether their other benefits including the social security would be affected if they go with a reverse mortgage in Hawaii. Fair enough! Retirees opting for the reverse mortgage often come up with the concerns like will their pension be affected, what will happen to their Medicare and Medicaid benefits which they are already receiving and so on. Well, there are a lot of myths associated with all these queries and all they need is the facts. And this post is all about the facts that will definitely strengthen their trust in the HECM reverse mortgage.

Let’s start with the social security benefits first, you will be glad to know that HECM reverse mortgage does not hamper your social security. They will not change once you get your reverse mortgage, which means you will keep on receiving your benefits even after this mortgage solution. This was something you contributed in while you were working and receiving a reverse mortgage cannot affect these benefits. It is your right to collect your social security and no mortgage solution can prohibit you from doing that.

Next on the concern list is the pension benefits, well these were the benefits you established with your employer and this cannot be affected by receiving a reverse mortgage. Your pension is that benefit for which you worked hard and saved it for your upcoming years. In no way receiving a reverse mortgage in Hawaii can affect your pension. So just stay relaxed and enjoy your retirement in a better way.

Coming over to Medicare now, this is the part of the social security act only that was created in 1965 to help seniors with their health care costs. It was a way to provide health insurance to seniors aging 65 or above. This was a government program that was specially designed for the seniors to help them from the medical perspective. And, same is the HECM reverse mortgage that is formulated to provide financial help to the seniors. This means you can continue using your Medicare benefits even after taking a reverse mortgage in Hawaii.

Last but not the least is the Medicaid, the only thing that might get affected with your reverse mortgage. The eligibility for this benefit requires the seniors to have no more than $2K ($3K for couples) in assets on any day of the month. However, this does not affect your eligibility for a reverse mortgage but you may not be able to receive your Medicaid benefits once you start getting a reverse mortgage in Hawaii.

So, just make sure to consult a financial advisor before planning out anything. It is better to be safe than sorry.

A Know How About Reverse Mortgages In Hawaii

At any stage in your life, stability and success will be those two factors on which your future will depend. Sometimes, even after being successful we are unable to save enough for our upcoming years. This is usually the retirement scenario where due to shortage of funds things take a different turn. To get over this, start exploring reverse mortgages in Hawaii. These are a small fraction of the mortgage market, which is growing fast because of its tantalizing advantages. With 10, 000 people retiring daily life expectancies are rising and retirees could outlive their assets.

Today, the growing number of reverse mortgage lenders in Hawaii is recommending people to take a fresh look at reverse mortgage in order to enjoy the best retirement income. If you are still holding on to the basics then let me make this clear that the present day reverse mortgages in Hawaii are far more different from reverse mortgages 10 years ago. You must give up those age old misconceptions and start considering it as a financial planning strategy.

I agree reverse mortgages can be a difficult concept to understand especially when there is so much conflicting information about it. We don’t know whether it will prove beneficial for us or not. If you are a good candidate it can help you lower your bills, giving you another reliable source of income. The proceeds can be used for in-home care, healthcare costs, home improvements and purchase, long-term care, emergency funding, traveling, payment of property taxes and insurance and a great supplement for retirement income. All in all, reverse mortgages in Hawaii can be a good alternative for seniors who are falling short of money, yet sitting on a significant amount of equity in their homes.

However, with so many Hawaii reverse mortgage questions, this is how reverse mortgage is explained below:

• Many people have a question that in case they are unable to pay the loan, will the lender take away their home. The answer to which is No. As long as you or one of the borrowers continues to live in the house and pays the taxes and insurance, your house is yours. Also, you can never owe more than the value of the property if you are planning to sell it.
• Another common thing that people ask about a reverse mortgage is how much money they will get if they apply for it. Well, it will entirely depend on your age, the current interest rate and the appraised value of your home or mortgage limits for your area fixed by FHA, whichever is less.

• Last but not the least, many borrowers ask whether they will have a property to leave for their heirs or not. When you decide to sell your home, you will have to repay the amount you received from the reverse mortgage plus the interest and other fees to the lender. The remaining equity, if any, will be there for you and your heirs.

So, what are you thinking about? It’s time to enjoy your retirement on your terms!

Everything You Need To Know About HECM Reverse Mortgage

HECM or Home Equity Conversion Mortgage, which is commonly known as the reverse mortgage is one of those mortgage solutions that are designed for borrowers over the age of 62. These are federally insured loans that are truly a mortgage in reverse. These are an FHA’s reverse mortgage solutions that allow you to take out a portion of the equity in your home if your financial situation calls for it. In this way, borrower’s current monthly payment is eliminated and he is given an access to the available equity in his home or in some circumstances, to purchase a primary residence as well. As these reverse mortgage solutions are insured by the federal government so it is advisable that seniors interested in this kind of loan should apply for it through a Federal Housing Authority approved lender only.

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Highlighting Some Terms Of HECM

• Furthermore, on availing HECM, you are not subjected to any monthly payments or fees instead you get a monthly cash payment until you don’t use the mortgaged home as your primary residence

• Over the time this reverse mortgage balance will grow. Since monthly payments have already been eliminated so the loan will yield an interest charge each month, which will be added to the balance of the loan

• In case the borrower dies or sells the property, the cash, interest and finance charges will be repaid through the equity in the home itself

• Once the debt is paid, any remaining proceeds after it will either be retained or left to the surviving family members. In no ways, your spouse or loved ones can be held responsible for this debt

Must Read : Do’s And Don’t of Reverse Mortgage Hawaii

Eligibility Criteria For HECM

• Qualifying this type of financial product demands you to be at least 62 years old

• An eligible candidate should either own a property that is paid off or has substantial equity in the home or must be living in the property as a principal residence

• You should not be overdue with any federal debt and must have the finances to pay costs for your property, including taxes, insurance and associated fees

• The application process also requires you to attend official information session on HECM in order to make things clear to you in advance

• Properties that can get you these mortgage solutions are either single family property or if you are occupying one of the units of a multi-unit property, as well as, certain manufactured homes and approved condos

The Factors That Decide The Amount Of Money You Will Get

• The monthly payment of the borrower will depend on the following:

# The amount of equity you have
# Your age
# The current interest rate

• When you will apply for HECM, everything will be verified by your lender, which will cover your income, assets, expenses, good credit as well as how up to date you are on your taxes and insurance premiums

• If you decide to go with a fixed-rate loan, you will receive the same amount of money each month, which is termed as Single Disbursement Lump Sum Payment Plan

• For the ones who want to opt for an adjustable rate, they can choose between fixed monthly payments or flexible monthly payments funded by a line of credit or the combination of the two

HECM And The Associated Costs

• When you apply for HECM, the cost of these reverse mortgage solutions will include an insurance premium between .5 and 2.5 percent of the total loan amount that covers any third-party charges, title search and insurance, and inspections

• There will be an origination fee of up to $6,000 along with $35 as monthly servicing fee

It is completely your choice whether you want to finance these costs as a part of the mortgage, (which will reduce the total amount of payments you will receive) or you want to pay these costs upfront.

On the whole, HECM is those reverse mortgage solutions that give you the flexibility to have an inflow of ready cash. The best part is all payments are delivered in increments so that you don’t run out of income as you age. Being backed by FHA is its biggest plus point as it gives you the assurance that your investment is fully protected. So, when you are thinking about long-term financial retirement plans, there are no better mortgage solutions than HECM. Of course, you have to meet certain requirements before obtaining one.