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Sunday, August 18, 2019

MORTGAGES FOR SENIORS

When a person retires, he or she may see a dramatic change in their income - at a level a lot less than they were accustomed to when working. Perhaps they had saved money for retirement, but some incidence may have occured to use up these savings, perhaps an illness.

How do people meet these finnacial challenges? Over the past few years, as home prices have escalated, substancial equity has been built up in their home. Do you tap into this equity to free up funds for use. What are the pros and cons? What types of mortgages are available? 

Reverse mortgages, lines of credit and equity take-outs are available. However the amount of income and debt level may make one or more of these unavailable. Over the next few days, each one of the types will be discussed along with the pros and cons for each. 

Are there other reasons that a senior may wish to pull equity out of their property? Perhaps they want to help with the down payment of a child who wishes to  uy a house. Perhaps, they want to contribute to a child's or grandchild's education. Maybe they want to travel while they are in good health. Perhaps they want to renovate their home. Perhaps they are carrying high interest credit card debt and want to lower their payments. The reasons are varied for seniors.

For information on mortgages for seniors, contact doug@seniorequity.com





Saturday, February 23, 2019

Is It Time To Refinance?

When people take on a mortgage the majority opt for a 5 year one usually because they intend to stay in the residence and they know their payments for the next 5 years. However life sometimes throws a curveball at us and we have to make hard financial decisions. Perhaps an illness occurred or 1 person was laid off or a divorce occurs and suddenly you can't pay for anything in cash anymore and resort to using credit cards. As we well know credit cards companies love this because the amount of interest you are paying increases.

Perhaps you took a 5 year mortgage out several years ago You now look at how you can lower your payments and because mortgage rates are at a historical low these days it makes sense to look at breaking your mortgage and taking on a new one at a lower rate.  Paying off credit cards at 20% + interest looks attractive when you can get a new mortgage under 4% these days.

Before you do anything you need to know what it will cost to break your old mortgage. In all probability your lender will use the IRD method to calculate your penalty. Not all lenders use the same numbers to calculate. The best thing to do is to contact your lender and ask what the payout cost would be. This will give you a fairly accurate number to work with.

Next step is to talk to someone. Your bank is more than happy to help you but probably will not give the lowest rate out in the marketplace. A mortgage broker works with many different lenders and can look around to find the best lowest rate mortgage to suit your financial situation.  One advantage of using a mortgage agent is that you give your consent for them to pull your credit bureau and they only do it once. If you walk from lender to lender to lender each one will pull your report which could hurt your overall credit score.

Once you select a potential lender an appraisal of your home and property will be done. As lenders can now only loan to a maximum of 80% of the assessed value the appraisal becomes their source to calculate the value of your home.

You will be asked for your up to date mortgage statement , your recent paystubs, your property tax statement, proof of fire insurance and NOAs. Lenders differ in requirements but these are the basics documents required.

If you are successful in obtaining the mortgage you can pay off the outstanding debts and start back on the road to successful financial pl