Published on February 1, 2010 by admin
Retirement sometimes is not all it is cracked up to be. Living past 60 can be a source of great stress and difficulty. Adjusting to life without the daily routine of a job and also the monthly wage can be very mentally and emotionally draining. Whilst you can stop ‘working’ on a 9 to 5 job, you should never really stop ‘working’ on living a life of fulfilment and satisfaction. Having goals and targets to work and strive towards is a great way to keep yourself active and your mind fresh. Often though, the ugly head of money will keep popping up into your consciousness. For those who already own their own home, this need not be a worry.
Retirees who fully own their own home are extremely fortunate. The home is not only a place of shelter but a great investment. Land is a scarce commodity and the population will only keep trending upwards. Having a house almost always means that over time it’s value would have increased. As a retiree, you can tap into this value by applying for a secured loan. Banks know the value of a house and the fact that you own your own home is a great source of trust for the lenders. The fact that you own your own home is proof enough of your credit worthiness and often there is not much more that you need to provide in terms of proof of ability to repay.
The lenders bank on the high probability that over the course of the loan, the value of your home will increase significantly more than the amount of interest that you will need to pay to service your loan. Whether or not you have regular income to pay the monthly interest expenditure is not paramount. This of course is great for the retiree. You can live your life financially worry free and work on the hobby that you always wanted to work on, go on that holiday that you never had a chance to, relax in that patio that you never had the time to finish.
Word of caution on loans for retirees: There are many untrustworthy lenders looking to take advantage of unexpecting seniors. Always look to lend from reputable lenders who have a sizable reputation to uphold. Not all loans are created equal. Shop around for the best deal. Know that you are a very valuable customer that every bank and financial lender wishes to get onto their books and use this to your advantage. Play the banks off at one another, compare rates and get your preferred lender to beat or at least match the best rate offered by the other lenders. A penny saved is a penny earned.
Published on January 29, 2010 by admin
When you are approaching or in retirement age, money is often a issue of great concern. If you are not one of the lucky ones who have managed to build a passive income on the side that is enough to support their everyday living, you will at some stage need more money than there is in your bank account. When you have stopped working, your monthly wage stops funneling through and supporting your spending habits. You need to be good a working out how much you spend (budget, budget, budget) and how much you have left to spend.
With the housing boom of the last couple of decades, many seniors have found themselves owning a very valuable house that they live in. However, regardless of how much money their home is worth on paper, it is only a paper profit until they realise it by selling it in the open market. Financial institutions have come to the realization of this value and balance it with the need of seniors to access this liquidity. A Reverse Mortgage is a type of mortgage that lets you own your house, but get paid by the bank. Sound a bit backward? Well the thing is that you actually sell you house to the bank and they pay you a bit for each each period, thus eating away at the proportion that you own of the house. You do not pay anything to the bank for this ‘loan’. The bank recovers their costs and profits when you pass away or when the house is sold and the debt repaid.
Reverse Mortgage Loans are a very smart way to elevate your life style for the retired senior citizen. They are guaranteed by the government and they enable you to have access to an otherwise inaccessible part of your wealth. Having access to this money means that you can choose to live the life that you deserve after years of hard work and not have to worry about where the money is going to come from.
There are many lenders that will offer a reverse mortgage. Finding one is as easy as looking up the Yellow Pages or searching on the internet. However, a word of caution to those who are new to Reverse Mortgages. There are many unscrupulous lenders out there seeking to seek advantage of the uninformed and elderly. As with all contracts, read the fine print, make sure you fully understand the terms that you are signing up to. If there is any doubt at all, have the clauses explained to you in detail or bring along a trustworthy and financially savvy friend. There are many different types of Reverse Mortgages to suit many different people in different financial situations and stages in retirement. Seek a financial advisor from a trust worthy banking institution and make comparisons between the leading banks as well as the small independent, private lenders. If you do not need a reverse mortgage with all the bells and whistles, you will save a lot with a no-frills reverse mortgage. As with all loans, lending rates will also differ from lender to lender.
A Reverse Mortgage can be your financial solution to better living in retirement. You can pay off your outstanding loans, finance a renovation, go on holidays, buy your dream car… live your life the way you want it.