The name is somewhat misleading. A reverse mortgage is a loan that is structured like a mortgage, with YOU as the lender and the BANK as the buyer. In the U.S., homeowners wanting to initiate a reverse mortgage must be at least 62 years old, and own all or most of their home. These backwards mortgages are usually performed through a bank or broker. The homeowner essentially sells his or her house to the bank, in return for receiving periodic mortgage payments. Sometimes the payments can be structured as a lump sum, line of credit, or a combination of the three methods.

So what are the benefits to a reverse mortgage? First it provides a constant and dependable stream of retirement income. Many retirement plans such as 401(K) or Individual Retirement Accounts (IRA) generally increase in value, but are still tied to stock market interest rates. The amount of money they provide during retirement can vary. Social Security, Medicare, and other U.S. government programs have endangered funding, so they may not be reliable sources of income. A reverse mortgage can supplement a senior citizen’s income. The amount depends on the homeowner’s age, equity of the house, interest rate on the loan, closing fees, and a few other factors.

A common misconception about the reverse mortgage is that the bank eventually owns your house. This is not true! The deed remains in your name throughout the entire term of the process. Note that there is interest on the loan payments, but it is deferred until the loan is repaid.

The homeowner can remain living in the house during the entire term of the reverse mortgage. The loan becomes due when the homeowner moves out, or becomes deceased. At those times, the survivors/heirs can repay the loan themselves if they want to keep the house. They can also sell the home and repay the loan plus the interest in full. The money paid to the homeowner as mortgage payments must be repaid to the lender when the loan becomes due.

These odd mortgages can provide much needed financial support during retirement. It is a time when medical costs are likely to increase, so an additional source of income can really help. Use a reverse mortgage to help yourself or your aging relatives to gain the financial security in retirement that they worked so hard to achieve.

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This is not some gimmick or false promise but is based on real mathematical calculations that are not too difficult to understand. Instead of getting out a calculator or going to a website that can instantly calculate an early mortgage payoff, we can take a hypothetical house and mortgage and work with that information.

This statement can be backed up by math principles and is not a scam. Instead, it is something that you can understand quite easily. Without visiting a website that will quickly calculate an early mortgage payoff, it is possible, as an example, to work with some theoretical numbers that represent the home mortgage.

For example, we can start with a $200,000 house that has a 30 year fixed rate mortgage at 7%. When that house is paid off after 30 years, the actual cost of the mortgage is $479,000. This figure was derived from a simple loan amortization calculator. That is a significant amount of money! Now let’s see how we can reduce that amount.

We can use a standard 30 year fixed rate mortgage for a $200,000 house with a 7% interest rate. When the term of the loan has been paid, 30 years later, the total cost of the mortgage is $479,000. This number was obtained by using an amortization loan calculator. Let’s see how we can lower that number since it is so large.

Our formula then would look as follows: $200.000 ‘f7 360 = $555.56. $555.56 is the portion of the monthly mortgage that is the average principle pay out over the length of the mortgage loan. I bet you’re thinking that you could cut your mortgage from 30 years to 15 years if only you were to pay that additional $555.56 on a monthly basis.

Not many people have that kind of money. The point is that if you were to pay a small amount extra per month you could cut a dramatic number of years off your total mortgage. We’ve already determined that an extra $555.56 per month will cut your mortgage by 16 years and 2 months.

Few individuals can pay that amount of money. However, you could dramatically cut the number of years off your mortgage by paying a small additional monthly payment. We have established that you can decrease your mortgage by 16 years and 2 months paying an extra $555.56 monthly. Would you believe that you could pay off your mortgage in 22 years & 8 months by simply paying one quarter of $555.56, which comes out to $138.89 monthly? Essentially, this payment schedule is cutting more than 7 years off the 30 year mortgage term!

For an added mortgage payment of less than $140 per month, that’s not bad. Paying off your mortgage early is the point of this exercise and it’s just a means to get you thinking how adding a little extra money monthly helps. Hopefully, you now understand that an early mortgage payoff can be achieved rather easily.

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For those who are unfamiliar with the terminologies of the housing market, FHA streamline refinancing allows a homeowner to reduce the interest rate on their current home loan. This streamlined refinancing can be done quickly and doesnt require any appraisal at all. Opting for this kind of refinance method will spare you with the tons of paperwork needed by your lender speeding up the process, which saves you time and money.

How do you qualify for an FHA Streamlined Refinancing? Heres what you need to know:

1. Your mortgage must be already insured by the FHA 2. You must have a current mortgage and not delinquent 3. The refinance is to result in a lowering of the borrower’s monthly principal and interest payments 4. No cash may be taken out on mortgages refinanced using the streamline refinance process

There are different streamlined refinancing types your lenders can offer. No-cost refinances will not require you to take money out of your pockets, but it will charge you with a higher interest rate. Closing costs are shouldered by the lender.

Sometimes, the lenders can carry over closing costs to the new mortgage amount. Note that this can only be done if there is enough equity in the property which is determined by an appraisal. For refinances without appraisals, the new loan amount must not go beyond the new loan amount.

For homeowners who dont have an FHA loan and want to qualify for the streamlined refinancing, the way to go about this challenge is to apply for an FHA refinancing loan or a conventional refinancing.

Holders of a conventional loan who want to refinance with FHA must apply with credit check, employment verification, and debt-to-income ratio requirements.

FHA Streamlined Refinancing is one of the effective ways you can keep your homes. During these times when foreclosures happen in almost every neighborhood, it is extremely important that you can afford monthly mortgage payments to stay in your homes. Utah is no exception. The foreclosure crisis has already crept up to different states. Lowering mortgage payments through FHA Streamlined Refinancing will help curb foreclosure in communities and the whole state.

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Remember this is your life, noone can do this but you, so get started soon, be free from debt, and don’t waste your money or your time with other programs, Johns Transforming Debt into Wealth is the only program to use.

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