The Home Equity Conversion Mortgage (HECM) program gives the most choices in how you can get your cash from a reverse mortgage. You can take all of your loan as:

* a single lump sum of cash; or as

* a “creditline” account of a specific dollar amount that you control; you decide when to make a cash withdrawal from this account and how much cash to withdraw; or as

* a monthly cash advance for a specific period of time, or a monthly advance for as long as you live in your home.

In addition, you can choose any combination of these options, and you can change your choices at any future time.

Loan Amounts

The amount of cash you can get depends on your age, current interest rates, and your home’s value. The older you are, the more cash you can get. If there is more than one owner, the age of the youngest owner is the one that counts. The lower interest rates are when the loan closes, the more money you can get. You can also get more money from a lender who charges lower loan fees.
In general, the more your house is worth (its appraised value), the more money you can get. But the value is subject to a limit of $625,500. If your home is worth more than $625,500, you are still eligible for a HECM loan. But the amount of money you can get is based on $625,500, not on your home’s actual value. For example, if your home is valued at $700,000, then the amount you can borrow is the same as it would be if your home were valued at $625,500.

The current home value limit of $625,500 went into effect on February 24, 2009, and will remain in effect until December 31, 2009. Congressional action during 2009 could extend this limit into 2010. If Congress doesn’t act on this matter, the limit would most likely revert back to the previous limit, which was $417,000.

The amount of money you can get from a HECM loan also depends on how you want it paid to you: lump sum, creditline, monthly advance, or some combination of these three types of cash advances.

For example, a 75-year-old borrower living in a $250,000 home getting a HECM loan at 7% expected interest could select:

* a lump sum or creditline of $135,484; or

* any combination of lump sum and creditline that totals $135,484, for example, a lump sum of $30,000 and a creditline of $105,484.

The Reverse Mortgage Calculators give you an estimate of HECM cash benefits based on your age, home value, and current interest rates.

Creditline Growth

Perhaps the most attractive HECM feature is that its creditline grows larger over time. This means that the amount of cash available to you increases until you withdraw all of it.

For example, if the creditline equals $100,000 and you withdraw $20,000, you would have $80,000 left. But if your next withdrawal is one year later, you would then have more than $80,000 left — because the $80,000 grows larger by the same total rate* being charged on your loan balance. If that rate were to equal 6% per year, for example, your available creditline one year later would be $84,800 (6% x $80,000 = $4,800).

So a growing HECM creditline can give you a lot more total cash than a creditline that does not grow. The HECM creditline grows larger every month until you withdraw the last of your money. The Reverse Mortgage Calculators can estimate how much cash would remain in a HECM versus a non-growing creditline.

HECM creditline growth means that taking a large lump sum of cash from a HECM and putting it into savings or most investments is not wise. If you did that, you would be charged interest on the full amount of the HECM lump sum. If you leave the money in the creditline, you avoid substantial interest charges. You also end up with more available cash, since your creditline grows larger at a greater rate than a savings account or safe investments are likely to grow.

*The rate at which a HECM creditline grows each month equals the current interest rate being charged on the loan plus one-half of one percentage point, divided by twelve. So if the interest rate this month is 5.5%, the creditline would grow by 0.5% (5.5% + 0.5% = 6%/12 = 0.5%). If you had a creditline of $80,000 at the start of the month, it would equal $80,400 at the end (0.5% X $80,000 = $400).

AARP does not endorse any reverse mortgage lender or product.

You can always visit me at www.allwestmortgage.com with questions or if you need more information on Reverse Mortgage!

Ten Ways to Redefine Yourself for Retirement – Shifting Gears to Successful Retirement

For original content click here

By Cynthia Barnett

If you’re like most folks, you have your doubts about retiring. On one hand you may be elated. On the other hand, you may be a bit frustrated because you have no idea what the future entails. We’ll, we’re here to tell you that shifting gears from a working professional to a successful retiree can be easy. In fact, we consider it like simply shifting gears to a different lifestyle and being open to redefining yourselves. It is not about giving up. It is about undergoing a career transformation, maintaining your professional and personal identity and taking control of your life. It is about being productive, not losing touch with that inner you that makes you special.

In this article, we’ll discuss ten proven ways that you can use to redefine yourself and transition into the initial phase of retirement. These ten tips will help you adapt positively to your post-retirement years and are as follows:

1. Partial disengagement – In order to transition smoothly, you must partially disengage yourself from your full time working life. This isn’t to say that you must go cold turkey. Instead, you have to develop a different mindset that retirement, although a time for change, is a period of new growth and a time for self fulfillment. At this point, many go from full time to part time and some go from full time to no work at all. Trust your instincts and go with what you feel works for you.

2. Changing our image – You must change your internal image about what your career means. After all, don’t focus on ‘What am I to do now that I’m retired?” instead think “What will I become once I’m refocused and retired?” Therefore, you have to change your perception and realize that you can succeed as a retiree if you believe that you can.

3. Appreciating ourselves – Remember that you’re a unique individual and you need to celebrate this fact, every single day! Your personal worth is far beyond the work you did in the past. You have so much to give and contribute to the world and retirement is the perfect time to let your “inner light shine” and let this light shine as far as you can see.

4. Staying connected – You should be committed to interacting with people with whom you have a common interest. Finding such people can be done by improving your social life to include more people, places and things. Make it a point to get to know people with similar interests as yours. Join clubs and groups, participate in activities, and have a great time.

5. Remain active – Do not think of retirement as only a period of rest and relaxation. Times have changed, and so has the concept of retirement. Being inactive is “OK” if this is all that you want to do. This is about you. Some people take a period of a few months to a year to just cool out and relax before moving on into a more active life. Whether you decide to be “active” or “inactive” and how long, it is totally up to you. You know yourself better than anyone else and you must do whatever makes you happy.

6. Consider your options– Consider your many available options. Whether you ‘ease’ into retirement, take a course at a college, or work some part time job or pursue a volunteer position, do what you want to do and let no one tell you what you need to do while in retirement. This is your personal time and you are in control of your life.

7. Increase our knowledge – There is no end to educating yourselves. As long as you’ve got breath in your body, you should increase your knowledge base. After all, learning is a lifelong process and there are many things that you can do to increase your knowledge and in the process share your knowledge with others. For instance, you can learn computers. You can learn how they operate, how to fix them, and many other things. The possibilities are endless.

8. Explore Your Dreams – Retirement is a perfect time to fulfill your dreams, especially now that you have some time to devote primarily to your needs. Take some time and really think about what you want to accomplish in life and then make those dreams a reality!

9. Join a Cause – Retirement does not mean that you are worthless. To derive a feeling of self worth and fulfillment, commit yourself to a worthy cause that you truly believe in. For instance, you might chose to help people become aware of the devastation of HIV or breast cancer.

10. Maintaining youthful attitude – Retirement from a job does not mean that you give up everything and retire to ‘watering plants’. Just because you are s0 does not mean you have to act your age! It is the attitude that counts.

Redefining yourself after retirement is not as difficult as you might imagine. By maintaining a youthful attitude, joining a cause, exploring your dreams, increasing your knowledge, considering your options, remaining active, staying connected, appreciating ourselves, changing your image and partially disengaging from work force, you can redefine yourself.

For questions or more information regarding Reverse Mortgages click here

http://seniordailyliving.com/Articles/PersonalFinance/TenWays.html

By Cynthia Barnett

If you’re like most folks, you have your doubts about retiring. On one hand you may be elated. On the other hand, you may be a bit frustrated because you have no idea what the future entails. We’ll, we’re here to tell you that shifting gears from a working professional to a successful retiree can be easy. In fact, we consider it like simply shifting gears to a different lifestyle and being open to redefining yourselves. It is not about giving up. It is about undergoing a career transformation, maintaining your professional and personal identity and taking control of your life. It is about being productive, not losing touch with that inner you that makes you special.

In this article, we’ll discuss ten proven ways that you can use to redefine yourself and transition into the initial phase of retirement. These ten tips will help you adapt positively to your post-retirement years and are as follows:

1. Partial disengagement – In order to transition smoothly, you must partially disengage yourself from your full time working life. This isn’t to say that you must go cold turkey. Instead, you have to develop a different mindset that retirement, although a time for change, is a period of new growth and a time for self fulfillment. At this point, many go from full time to part time and some go from full time to no work at all. Trust your instincts and go with what you feel works for you.

2. Changing our image – You must change your internal image about what your career means. After all, don’t focus on ‘What am I to do now that I’m retired?” instead think “What will I become once I’m refocused and retired?” Therefore, you have to change your perception and realize that you can succeed as a retiree if you believe that you can.

3. Appreciating ourselves – Remember that you’re a unique individual and you need to celebrate this fact, every single day! Your personal worth is far beyond the work you did in the past. You have so much to give and contribute to the world and retirement is the perfect time to let your “inner light shine” and let this light shine as far as you can see.

4. Staying connected – You should be committed to interacting with people with whom you have a common interest. Finding such people can be done by improving your social life to include more people, places and things. Make it a point to get to know people with similar interests as yours. Join clubs and groups, participate in activities, and have a great time.

5. Remain active – Do not think of retirement as only a period of rest and relaxation. Times have changed, and so has the concept of retirement. Being inactive is “OK” if this is all that you want to do. This is about you. Some people take a period of a few months to a year to just cool out and relax before moving on into a more active life. Whether you decide to be “active” or “inactive” and how long, it is totally up to you. You know yourself better than anyone else and you must do whatever makes you happy.

6. Consider your options– Consider your many available options. Whether you ‘ease’ into retirement, take a course at a college, or work some part time job or pursue a volunteer position, do what you want to do and let no one tell you what you need to do while in retirement. This is your personal time and you are in control of your life.

7. Increase our knowledge – There is no end to educating yourselves. As long as you’ve got breath in your body, you should increase your knowledge base. After all, learning is a lifelong process and there are many things that you can do to increase your knowledge and in the process share your knowledge with others. For instance, you can learn computers. You can learn how they operate, how to fix them, and many other things. The possibilities are endless.

8. Explore Your Dreams – Retirement is a perfect time to fulfill your dreams, especially now that you have some time to devote primarily to your needs. Take some time and really think about what you want to accomplish in life and then make those dreams a reality!

9. Join a Cause – Retirement does not mean that you are worthless. To derive a feeling of self worth and fulfillment, commit yourself to a worthy cause that you truly believe in. For instance, you might chose to help people become aware of the devastation of HIV or breast cancer.

10. Maintaining youthful attitude – Retirement from a job does not mean that you give up everything and retire to ‘watering plants’. Just because you are s0 does not mean you have to act your age! It is the attitude that counts.

Redefining yourself after retirement is not as difficult as you might imagine. By maintaining a youthful attitude, joining a cause, exploring your dreams, increasing your knowledge, considering your options, remaining active, staying connected, appreciating ourselves, changing your image and partially disengaging from work force, you can redefine yourself.

Visit us at www.allwestmortgage.com to see if a reverse mortgage can help with your retirement plan!

The Department of Veterans Affairs provides three types of long term care services for veterans.

The first are health care benefits provided to veterans who have service-connected disabilities, who are receiving VA Pension or who are considered low income. These services include free medical care, possible free prescription drugs, orthotics and prosthetics, home renovation grants for disabilities, home care, assisted living, domiciliary care, nursing home care, and a possible host of other services or benefits.

The second benefit is state veterans homes. The majority of these homes offer nursing care but some may offer assisted living or domiciliary care. The Department of Veterans Affairs in conjunction with the states helps build and support state veterans homes. Money is provided to help with construction and a federal subsidy of $72.71 a day is provided for each veteran using state veterans nursing home services. These homes are generally available for most veterans and sometimes their spouses and in some cases for so-called “Goldstar parents.” Veterans homes are run by the states, sometimes with the help of contract management. There may be waiting lists in some states.

The third benefit for veterans is disability income programs. The most familiar of these benefits is an income for service-connected disabled veterans called “Compensation.”  The least known of these is a program officially called “Pension” but popularly known as the “aid and attendance benefit.”

…. read the entire article by going to the link below

Please go to the following URL for the entire article and previous articles: Either click on the link   http://www.planforcare.org or copy and paste the following into your browser:     http://www.planforcare.org

Visit us at www.allwestmortgage.com if you have questions, or would like to see how a reverse mortgage can help you pay for your eldercare needs.

* the bursting of the housing bubble;
* the stock market crash; and
* the ongoing rise in Social Security’s Full Retirement Age

The Index results from comparing households’ projected replacement rates – retirement income as a percent of pre-retirement income – with target rates that would allow them to maintain their living standard.

Even if half of today’s household work until they turn 65, the NRRI shows that in 2009, half of today’s households will not have enough retirement income to maintain their pre-retirement standard of living.

As the study says, ensuring retirement security for an aging population is one of the most compelling challenges facing the nation.

The National Retirement Risk Index: After the Crash

Visit us at www.allwestmortgage.com if you need help in the Los Angeles, CA area.

You may not be aware of this, but reverse mortgages are the safest kinds of mortgages available today.  In addition, they are among some of the most beneficial senior financial products ever produced.  What makes this true?  It was not always the case, but since it was highlighted by the federal government, they were able to spot the dangers for senior citizens and put a stop to the possibility of them being taken advantage of.  The hazards initially present in this kind of mortgage were removed, and now the FHA and HUD have closing costs, interest rates and fees with set limits.  On top of these steps to properly regulate reverse mortgages, the qualifications that banks must meet to provide them are set so high that only a few lenders have taken the necessary measures in order to offer reverse mortgages.  This means that your reverse mortgage will remain in force and be secure for your entire lifetime if you take the correct steps to establish it.

Another great advantage is that reverse mortgages allow you to make use of the appreciation in your home’s value.  The standard way to utilize the equity that has been building on your home is to sell it and move.  What if you do not want to move?  Reverse mortgages, which have been designed specifically for senior citizens, give you a way to access the equity on your home without the risk of making monthly payments.  This is great for avoiding a financial predicament in your later years of life.

With reverse mortgages, you can remove 50 to 60 percent of the appraised value of your home without making monthly payments.  There are multiple ways you can extract the cash, including as a lump sum, a direct line of credit or as a monthly payment.  Effectively, the money your home appreciates can serve as a form of income for you and your household.  What a perfect solution to your depleting retirement fund!

How is interest calculated on a reverse mortgage?

Interest on a reverse mortgage is calculated based on the money paid out to you. In general, reverse mortgages have variable rates, though fixed rate reverse mortgages are becoming more popular. Variable rate reverse mortgages are based on certain indexes. Interest is not covered by the proceeds you get from a reverse mortgage – it builds up over the course of the entire loan until it’s repaid.

Does a reverse mortgage affect tax liability?

Reverse mortgages are not counted as standard income, but they may still be partially taxable. The IRS sometimes provide tax breaks for interest paid toward loans, but no interest is paid on reverse mortgages until the loan ends. Thus, this is not a concern until then. The insurance premium that is required to take out a reverse mortgage can be deducted from your taxes for that year.

How do reverse mortgages work with existing mortgages?

Reverse mortgages must be the primary liens on a property, which means that all other debts must be paid off when the loan is taken out. You can use the proceeds from the reverse mortgage to pay off your regular mortgage or other debts so that the reverse mortgage becomes the primary lien. This frees you from making monthly payments which can make it easier to make ends meet.

How do reverse mortgages interact with government assistance programs?

Some people worry that taking out a reverse mortgage will disqualify them from getting social security or other benefits from the government, but this is not the case. The only benefit that may be affected is Medicaid, which is based on how much money you have available. If you spend the money from a reverse mortgage immediately, it will have no effect. If you keep some money, however, it counts as an asset and may disqualify you from Medicaid.

Where can I learn more about reverse mortgages?

There are counseling sessions that are required in order to take out certain types of reverse mortgages. These counseling sessions are designed to ensure that you fully understand the responsibilities and repercussions of taking out this sort of loan. At the end of the session, you’ll be given a certificate that confirms you understand how reverse mortgages work.

What is a reverse mortgage?

A reverse mortgage is a special type of mortgage that’s only available to people ages 62 and older.  In a normal mortgage, a bank or other financial institution provides a loan to help a person or family buy a home, and the borrower pays back money each month. With a reverse mortgage, money is taken out against a home and paid to the borrower in one lump sum or in monthly payments.

How is a reverse mortgage paid back?

All payments on a reverse mortgage are deferred until the borrower dies, leaves their home or sells their home. Then, many different things can happen. If the home is sold, then the proceeds from the sale can be applied against the reverse mortgage. If the proceeds aren’t enough to cover the cost of the loan, then the lending institution pays the rest. If the proceeds exceed the amount of loan, then the extra moneys goes to the borrower. In the case of the borrower’s death, the borrower’s heirs can either refinance the house or sell it under the same conditions outlined above.

What can the money from a reverse mortgage be used for?

Money from a reverse mortgage can be used for anything at all. Most often, people take out reverse mortgages to supplement a dwindling retirement account. However, one might also take out a reverse mortgage to pursue a lifelong dream or spend some time traveling before settling down for good. Reverse mortgage funds might also be used for home repairs or even to prevent a bank from foreclosing on a home.

How do I qualify for a reverse mortgage?

Most standard types of homes qualify for reverse mortgages. Single family homes, properties with 2-4 units, condos, townhomes, and manufactured homes can all work for reverse mortgages. In some cases, you may even be able to take out a reverse mortgage on a home that still has a traditional mortgage. There are no special requirements for borrowers in terms of medical health or personal income.

How much money can you get from a reverse mortgage?

The amount of money that can be received from a reverse mortgage is dependent on the age of the homeowners, the value of the home, and the current interest rates. The general rule is that the more one’s home is worth and the older they are, the more money they can get. The money can be paid in any number of ways, including monthly payments, a single lump sum, and a flexible line of credit.

Visit us at www.allwestmortgage.com if you have questions, or need help with a reverse mortgage in the Los Angeles, CA area.

With fund cuts looming, it is important to find alternative sources for funding long term care for an aging loved one.  Reverse Mortgages are a great way to procure the necessary monies to secure the future of our seniors.  Visit me at www.allwestmortgage.com for help with a Reverse Mortgage in the area.

Continue reading HERE.

In 1988 the federal government stepped in and worked out a new law with the AARP to help increase the use of reverse mortgages under government supervision. The law was the Federal Housing Authority Insurance Program where 50 different lenders were chosen across the country to participate in giving out reverse mortgages. It wasn’t until 1989 that the first government supervised reverse mortgage was given out.

As people learned about reverse mortgages, they became more popular. In 1998 the pilot program became an official program that all lenders could participate in. The reason reverse mortgages became so popular is because they allow senior citizens who own a home and have retired to access the equity of their home without any real risks to them. When they are no longer living in the home for whatever reason, the house is then either sold or the family can choose to refinance the mortgage. If the house doesn’t sell for the amount that the reverse mortgage was for, there is no obligation to pay back the difference.

The way that an elder receives their money is completely up to them. They can get a line of credit where they can use the money from the bank as needed. This method will give them the most amount of money for their home. They can also take out the reverse mortgage as a lump sum, although the interest fees they will have to pay on it will be higher than the other options. The most common method of receiving payment from a reverse mortgage is to get a monthly payment. This payment will continue for as long as the person is alive, no matter how long they live or what the amount of the loan was.

There are a few stipulations to receiving a reverse mortgage, although for most people they aren’t a problem. The minimum age a person must be to get a reverse mortgage on their home is 62. They also must not have a current mortgage on the house or they will have to use a portion of their reverse mortgage to pay off the first mortgage. They will also have to go to financial counseling to assure the lender that they are fully aware of what the terms of the loan are and that they can meet their financial responsibility.

Visit us at www.allwestmortgage.com for help with a reverse mortgage in the L.A. area.