Mortgage

Reverse mortgage plans are known to provide financial assistance to seniors who have to live on pension and savings. Reverse mortgage allows borrowers to liquidate the value of their home equity and utilize this as an additional source of funding in order to live their remaining years in comfort. Though there are a number of pros reverse mortgage has in certain situations, there’s a dangerous pitfall too.

If the borrowers die and there is an existing mortgage that has been taken out on the home, the situation may change for the worse for the borrowers’ family members. The ownership of the home will have to be changed and transferred to the beneficiaries, and the mortgage taken out on the equity value of the home would need to be repaid. The beneficiaries would then be given a year to repay the mortgage in full with the corresponding interest that the borrower had agreed upon. Instead of inheriting some funds or assets, the surviving relatives may inherit an outstanding debt burden that now needs to be paid.

It is highly recommended to consult a lawyer or financial advisor in advance, before you plan to take out a mortgage, in order to avoid having to leave your family behind with any debt brought about by the mortgage. There are some necessary precautions that you would need to take in order the mortgage you have taken out would not be passed on to your surviving family.

olya Uncategorized, mortgage debt, financial advisor, home equity, reverse mortgage

Refinancing a mortgage at a lower interest rate is not always the right decision, even if the conditions are as favorable as they are now. In a number of cases it may be more reasonable to stick with your current mortgage.

It is important to understand that a refinance doesn’t pay off the debt, but rather restructures it at a lower interest rate and a different loan term. The goals of refinancing are reducing the interest expense, extending the loan back out to 30 years at a lower monthly payment, debt consolidation etc. For refinancing to make sense, you should be planning to be in the house for awhile. Think of how many months of lower payments it will take to recoup the closing costs of the new mortgage.

If you don’t plan to stay in the house for long, staying in your current mortgage is a wiser decision. As you know, there are cash-out refinancing and standard “plain vanilla” refinancing options, each with its pros and cons. When making a decision about refinancing, make no mistake about fees and closing costs which tend to add up quickly. You many need an extra $10,000 to cover the fees that are involved in the refinancing of a current mortgage.

olya Uncategorized, mortgage debt, loan, lower rates, mortgage, refinance