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Further
Reading ...
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What is an Investor Ready Business Plan - Howard Schwartz
What is an Investor Ready Business Plan A Business Plan, as all good entrepreneurs starting out in life should know is the foundation, or rather a springboard, towards the establishment and growth of a new business. A business plan is an...
Real Estate Investor Banned From Renting His Property? - Mark Walters
Do you realize that you might be prevented from renting your investment home? Prohibiting property owners from leasing their properties is a trend that is growing increasingly popular with some developers and many Homeowners' Associations (HOA). ...
How to save money by spending wisely - Willard Michlin
Why is it that the older and richer people become, the more conservative they are with their money? Have you ever done or know someone who has made an investment that promised a 10% interest or profit per month? Everyone wants to make above average...
30 Tips To Create A Profits Explosion Online! - Bret Forster
Can you relate to this scenario? You hear about how profitable internet businesses can be. So you sign on to the Internet and go on a quest for the “Internet Profits Holy Grail”. And, like King Arthur’s knights, you end up using the wrong strategies...
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Home Equity Loan – A Reverse Mortgage Could Provide a Comfortable Retirement!
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Written By:
Charles Essmeier
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While only comprising about 1% of all mortgages, the reverse mortgage has gained in popularity in recent years. Federally insured since the late 1980’s, the reverse mortgage allows owners of paid-off homes of at least 62 years of age to borrow against the equity in their homes in the form of a lump sum, a line of credit, or in the form of monthly payments. The loan is repaid when the owners die or when the home is sold or no longer occupied.
In the early years of its existence, the reverse mortgage was regarded as a “last resort” step to avoid foreclosure, pay medical expenses
or keep the home from disrepair. More recently, however, retirees have been finding creative ways to use the equity in their homes to allow their retirement years to be more enjoyable.
The huge growth of the housing market during the last five years has left millions of homeowners with large amounts of equity in their homes. Californians who bought homes in the early 1960’s at modest prices are now retiring; many of them have home equity in the mid-six figures. With that sort of equity, homeowners are using their equity to buy recreational vehicles, boats, luxury vacations, and even second homes. The structure of a reverse mortgage makes it possible for some homeowners to pay cash for a vacation home, while continuing to live in their primary residence for as long as they like, or are able. Once they die, the primary residence would be sold to pay pack the loan, while the second home would become part of their estate.
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/>This has provided a rare opportunity for many couples, who struggled to raise families and pay mortgages during the working years, to enjoy a few luxuries in their retirement years. Couples who could never afford to travel can now dip into their home equity and see Europe or take that cruise that always eluded them.
While this may seem like a win-win situation for all involved, those in the lending industry express caution. For most people, the equity in their home is their single largest asset, and borrowing against it should done only after careful consideration. What if a lengthy hospital stay became necessary? Would the homeowner have sufficient funds to pay for that after buying a second home through a reverse mortgage? What if a husband or wife became incapacitated and required permanent housing in a nursing home? These are things that must be considered before using home equity for a houseboat or RV, and those considering such a move should consider discussing their plans with a financial advisor.
Despite the potential drawbacks, the use of the reverse mortgage to fund a fun and adventurous retirement seems to be growing. With interest rates still near all-time lows, the trend will almost certainly continue in the near future.
About the Author
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.End-Your-Debt.com/ and http://www.HomeEquityHelp.net/
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High Probability Trading Strategies. Short term momentum stock trading - Conrad Wilson
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