Are you thinking of getting a rental property and making some money on the side? Well, congrats! You’ve made a great decision because rental income typically increases with time. In the U.S alone, the average monthly rent rose from $1,368 in 2014 to $1,734 in 2020. [Read more…]
It seems there is nothing special about renting accommodation since many people live this way for ages. You just need to find a suitable dwelling and sign a contract. However, often this process involves various pitfalls, and a person faces high chances to be left high and dry in the end. Of course, it is not the only possible scenario, and renting is not always a waste of money. People rent accommodation for different reasons. While someone cannot afford to buy their own apartment, others don’t want to tie themselves to one place forever. Renting is especially popular among young people since many move to another city to study and need a place to live. In most cases, they don’t plan to settle there and seek freedom of movement, so renting looks like the best option possible. Many students share accommodation with groupmates and have an aside job to cover expenses. It is when a speedy paper promo code comes in handy and helps save a penny. If you don’t want to spend a fortune on your accommodation, you should follow some useful tricks and tips. [Read more…]
It’s good that you think about investing at an early age. This is because when you become old, you’ll have capital and additional money. You won’t necessarily have to be worried about your financial condition. [Read more…]
Investing in gold is a great way to diversify your portfolio. Gold is a store of value, and there are many people who feel that it will retain its value over time. When investing in gold, it is important to understand the different types of gold that exist and a few other important factors. [Read more…]
Buying a car can be an exciting experience, but it’s important to keep everything in perspective when you do. Getting carried away can lead you into difficulties with finances later down the line or leave you paying more than you should. Here are a few essential tips to bear in mind when you buy a car, helping you to make your purchase in the smartest way possible. [Read more…]
Whether you’re a first-time buyer, or an American looking to refinance their current loan, there are a range of different mortgages available. You will need to identify what you’re looking for, know your credit score, and budget yourself before getting started. [Read more…]
Amid pandemic, unemployment, high cost of medicines, and lockdown, we are all faced with economic backlash. If you are a renter, or are moving for a new rental, you might find yourself in a tumultuous financial situation. However, a prudent financial strategy can save you from falling into miserable circumstances with your finances. [Read more…]
Gold is among the most valuable commodities in the world. It has developed into a universally recognized symbol of riches and prestige. It’s also one of the earliest investment methods that remains relevant to this day.
On the surface, a reverse mortgage seems like a great idea. As you enter retirement, you can use the equity in your home and receive guaranteed tax-free income in exchange for a share of that equity. However, like anything else, there are always downsides, so make sure you have done your research and thoroughly understand the risks of a reverse mortgage.
What Is a Reverse Mortgage?
A reverse mortgage is precisely what the name implies, a mortgage done in reverse. Instead of you making payments on a mortgage, your reverse mortgage provider makes payments to you. You can get your funds in a lump sum, as a line of credit, or in installments, and nothing is owed so long as you live in the home. The reverse mortgage will only become due if you move out, sell the home, or pass away.
Hidden Costs and Fees
Just like a regular mortgage, there are closing costs associated with a reverse mortgage. However, they’re typically much higher than a standard mortgage. Every lender will have slightly different ways to provide a reverse mortgage, and the fees, interest, and other costs will be delineated in the contract terms. Make sure you completely understand all the costs both upfront and over the term of the loan. It can be helpful to have an independent financial counselor review the reverse mortgage paper to ensure you understand all outlined terms outlined prior to signing.
Probably the greatest risk of a reverse mortgage is the uncertainty the future inherently brings. Typically, there are several circumstances in which the reverse mortgage comes due in full immediately. For example, If you end up in an assisted living facility or nursing home, you would be forced to sell the home and pay back the loan.
You are also required to keep up on the taxes and keep current with homeowners insurance as well as sufficiently maintain the property. If you become disabled or the rest of your income stream evaporates and you are unable to fulfill these requirements, the lender can immediately call the loan due in full.
Getting Out of a Reverse Mortgage
Perhaps you already have a reverse mortgage and have now decided it would not be in your best interest. The good news is that you can learn how to get out of a reverse mortgage. If you are within three days of signing the paperwork, you can rescind the agreement with no financial consequence. Beyond that, you could also sell your home, take out a home equity loan or home equity line of credit, or use your savings to pay it off. If none of these sound like viable options, Point offers a Home Equity Investment that provides more flexibility than a reverse mortgage as well as having no payments during the 30-year term. Talk to your financial advisor to see what option works best for you.