Meghan McCormick's Blog
If your wealth is tied up in your home, how can you free up some cash? A reverse mortgage is available to homeowners with mostly or fully paid-off mortgages. The monthly payments, which come from the lender to you, are not counted as taxable income. But there are mortgage taxes, and interest rates on reverse mortgages are somewhat higher than the current rate for a normal mortgage.
The FHA's Ever-Popular Reverse Mortgage Offering
Are you 62+? Consider the home equity conversion mortgage, available through the FHA. An approved counselor will lay out the process and point you to a qualifying lender.
Then, here's what you should expect:
- There are initial and annual fees, as well as recording fees.
- Expect credit checks.
- And yes, you do need an appraisal, inspection and a title search.
- In contrast to the usual custom with a regular mortgage, as the AARP points out, you'll probably have to pay the home insurance and local property taxes yourself.
The more you borrow, and the longer the term of your loan, the heftier cumulative interest charges you'll pay.
The Other Ways to Get to Your Home Equity
Of course, you might sell and downsize. Not ready for that move? Think about...
If your credit score is 640 or above and you have a mortgage, consider cash-out refinancing with the FHA. This replaces your present mortgage with a larger one. The larger loan pays off your mortgage, replaces it and gives you the extra funds in a lump sum. You can be younger than 62.
The Private Reverse Mortgage
Put up your home as collateral and enter a loan agreement with a close friend or relative. It's not altogether "private" — private reverse mortgages have a standard interest rate, governed by the IRS — but the rate is lower than a bank's.
A home equity line of credit (HELOC) empowers you to tap into your home equity. It's something like a credit card: there's a set credit limit. You only need to pay interest on what you withdraw. Note that HELOCs do not come with fixed interest rates.
The Home Equity Loan
An alternative to the reverse mortgage that can work when you need cash upfront is the home equity loan. You'll pay interest on the lump-sum amount.
Best of Luck (and Patience)!
If there's one thing you must have before applying for a reverse mortgage, it's patience. A reverse mortgage, like a conventional mortgage, involves a full approval process, including those pesky calls and queries about proof of your capacity to repay the loan.
But the result can make it all worthwhile.
19 Cornell St, South Hadley, MA 01075
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If your home has lingered on the real estate market for many months, there is no need to worry. Revisit your home selling strategy, and you can find innovative ways to promote your house to the right groups of buyers.
Now, let's take a look at three tips to help you revamp your home selling strategy.
1. Consider the Homebuyer's Perspective
One of the reasons why your house might have failed to generate interest from homebuyers is you have not effectively accounted for the buyer's perspective. Fortunately, now is a great time to take a fresh approach to highlight your home to dozens of prospective buyers.
Think about why you bought your house in the first place. Then, you may be better equipped than ever before to prioritize home upgrades and ensure your residence matches or exceeds buyers' expectations.
Furthermore, it may be beneficial to cut down on clutter inside your house. Because if you have a clutter-free home, you can make it easy for buyers to envision what life may be like if they purchase your residence.
2. Assess Your House Listing
A home listing is important, particularly for a seller who wants to stir up significant interest from buyers. If at first your home listing misses the mark with buyers, you can always revise it as needed.
Ensure all of the information included in your home listing is accurate and up to date. That way, you can help buyers make an informed decision about your residence.
In addition, include high-resolution photographs in your home listing. With top-notch photographs incorporated into your home listing, homebuyers can view each room of your house at their convenience. Plus, these photographs may help you differentiate your residence from other available houses.
3. Reinvent Your Home's Curb Appeal
Curb appeal can make a world of difference in any housing market, at any time. If you enhance your house's curb appeal, you may be able to move one step closer to selling your house.
Trim the hedges, mow the lawn and perform other home exterior improvements as soon as possible. Also, if you need assistance with home exterior upgrades, you can always reach out to landscapers and other home improvement professionals for support.
Hiring a great real estate agent may help you streamline the home selling journey too. In fact, a real estate agent who understands the ins and outs of the housing market can offer lots of guidance as you sell your home.
A great real estate agent will set up home showings and open house events, negotiate with a buyer's agent on your behalf and help you prepare for a home closing. And if you ever have concerns or questions along the home selling journey, a real estate agent is available to respond to them.
Accelerate the home selling journey – use the aforementioned tips, and you can rework your home selling strategy and boost the likelihood of a fast, profitable home sale.