What is a Reverse Mortgage Loan?

Posted on May 23, 2013 by
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The following is a guest post. If interested in submitting a guest post, please read my guest posting policy and then contact me.

A reverse mortgage loan is a Federal Housing Administration (FHA) insured loan for home owners ages 62 years and older that use a portion of their home’s equity as collateral.

How Can I Qualify for a Reverse Mortgage Loan?

To be eligible for a reverse mortgage loan, borrowers must meet a few basic requirements. Borrowers must be at least 62 years old and have sufficient equity in their home. In addition, there must not be any liens against the home and any existing mortgages must be paid off upon closing of the reverse mortgage loan. The home must be a single family home or a 2-4 unit home with one unit occupied by the borrower. Housing and Urban Development (HUD)-approved condominiums and manufactured homes that meet FHA requirements are also eligible. A reverse mortgage calculator can help determine eligibility.

The Federal Housing Administration (FHA) uses the following to determine if there is enough equity in the home:

  • Current interest rate
  • Whether the rate will be variable or fixed
  • Age of the youngest homeowner
  • FHA lending limits
  • Appraised value of the home

How Much Can I Receive?

The amount that can be borrowed will depend on three things: age, current interest rate, and the appraised value of the home. Use the Reverse Mortgage Calculator to estimate what you may be eligible to receive.

Are There Limits To How I Can Use the Funds From a Reverse Mortgage Loan?

No. As long as any existing mortgages on the property are paid off upon closing of the loan and all required property taxes and insurance are maintained, borrowers may use the loan proceeds however they wish.

How Will I Receive My Reverse Mortgage Funds?

You will receive the proceeds from a reverse mortgage loan in any of the following ways:

  • Lump sum – a lump sum of cash at closing.
  • Tenure – equal monthly payments as long as the homeowner lives in the home.
  • Term – equal monthly payments for a fixed number of years.
  • Line of Credit – draw any amount at any time until the line of credit is exhausted.
  • A combination of the options above.

When Does the Loan Become Due?

Your loan will become due when under any of the following circumstances:

  • The borrowers have passed away
  • The property is in disrepair and is unable to make or has refused to make repairs
  • The borrowers have sold the home
  • The property is no longer the principal residence of at least one borrower
  • The borrower does not live in the property as their primary residence
  • The borrower fails to pay required property taxes and/or insurance

Blogging Your Way to Wealth

Posted on May 22, 2013 by
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Check out my new guide for starting a blog to learn how to go about properly creating your own blog.

Previously I mentioned that I was open to other bloggers contributing to my weekly blogging tips series. At the time this offer didn’t generate much interest. I guess as this is mostly a personal finance blog fellow bloggers were more comfortable writing about finance topics. Still, I’d love to hear people’s stance on particular blogging strategies. I know my approach is far from the only approach one can use to succeed.

This week’s blogging tip is a guest post from my friend Steve who blogs at Money Infant. I recommend you check out his blog. He has a very interesting story of how he works online full time overseas. Sounds like a pretty sweet lifestyle to me. Continue reading →

UK Household Breakdown Infographic – Budgeting and More

Posted on May 21, 2013 by
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uk household breakdown

I don’t share much infographics on my blog, but it’s pretty interesting to see how people are spending their money even if it’s not for the country I live in. I’d like to see an infographic like this for Canads or the US. I found one of the more interesting parts was how much they spend on transportation. Looks like most people are spending more on transportation than housing. You sure wouldn’t find many people with that kind of budget here in Canada, at least not in big cities. If transportation really is that expensive, I can see why people might be more likely to resort to short term loans. They might be able to find ways to save money on housing, but with transportation costs you might be somewhat limited in options.

What do you think of these stats? How does it compare to your own budgeting?

How To Be Modest With Your Money!

Posted on May 20, 2013 by
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Be Modest With Your Money
Photo: formatc1

The following is a guest post. If interested in submitting a guest post, please read my guest posting policy and then contact me.

Hey everyone, and thank you for joining me for my second edition of Monday Money with Josh! Last week we discussed little known facts about credit scores and, I loved the feedback you all gave me on the article. With that said, I hope to keep you just as engaged today!

The topic today is being modest with your money. Why? Well, as human beings, we have a natural desire to do anything but be modest with money! When we find something we like, we have a tendency to build a need for products or services that should be considered a want. When we are out with friends, we have this overwhelming urge to shout, “I’ll cover the tab!!!” when deep down inside, we know that it’s going to put us in a tough place. With that said, here are 3 simple tips that can help you to be modest with your money… Continue reading →

Simple Ways to Spend Less on Food

Posted on May 17, 2013 by
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Be Your Own Boss
Photo: Tax Credits

The following is a guest post. If interested in submitting a guest post, please read my guest posting policy and then contact me.

I have read the same blogs you have by those thrifty people that can live on two hundred dollars of groceries a month for a family of four. I have sincerely read them and thought about what advice they offered but most of the advice I was unable to process and perform. I just have to face the fact that I and my family are either a) too spoiled, b) too lackadaisical, c) just do not want to put that much effort into it, or d) all of the above. I think we fall somewhere in between both extremes but I do know there are many ways we could and should cut back.

I read pretty much all the blogs that I come across on ways to save money. I even follow one blog and am fascinated by this individual’s thrifty nature and the lengths to which they go. They certainly are to be commended and they can never be accused of being idle! It makes me tired just reading about all the wonderful things they do to save money. I do however glean some ideas from these special people in the hopes of saving some money for my family. Continue reading →

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