Note: The pandemic has many people, especially the elderly, who are concerned about the economy. regular contributor Penelope S. Tzougros, PhD, ChFC, CLU, here discusses an alternative to get a lot of attention.
You are buzzing and everything is going well. Then the property tax increased again. Telephone and cable bills also increased, but after a few long conversations with the companies, you have lowered these costs.
When you are retired, how do you cover rising expenses?
In addition to lowering the cost of services such as telephone and cable, you can eliminate some nastiness, postpone home maintenance, increase income through housing international students *, or restructure your investments for more income.
Despite your cautious efforts, if the gap between income and expenditure is widening, you may be attracted by a reverse mortgage. Only reverse mortgage insured by the US Federal Government is called HECM (Home Equity Conversion Mortgage). It's a program from U.S. Department of Housing and Urban Development (HUD). Part of the capital in your home is paid out to you. This program can eliminate the gap between income and expenditure …
… but be very careful.
Even if you do not pay interest on HECM as you did with your original mortgage, the loan has fees and fees. The interest rate worsens and increases the size of the loan. You spend your equity. You no longer have a paid house. Wasn't a mortgage loan a goal that represented security for you?
The loan can help you cover your expenses now but if inflation and spending increases will it cover the gap in the coming years?
Some of the most important eligibility requirements for you and your house
- The homeowner is 62 years or older.
- This is the primary residence.
- The loan is paid off or mostly paid.
- 19659014] The borrower must participate in housing advice.
HUD's website explains the whole program very clearly. https://www.hud.gov/program_offices/housing/sfn/hecm/hecmhomevud19659018achteBooks to be aware of
- You are responsible for your living expenses and the cost of maintaining your house, including property taxes, and insurance.
- If your spouse is not on the loan and you, the HECM borrower, die, or for twelve months you no longer live there, then the loan is paid and paid. Would your spouse qualify for a loan from a bank to pay HECM? Payments will cease, but the interest costs for the loan will continue to accumulate.
- If your heirs inherit your house when secured by a HECM, they must pay the overdue loan by selling the property or qualify for a loan to pay down the HECM.
If you are afraid of losing your home, consider Making the Home Affordable Strategy through HUD, which has about a dozen programs; Some target those who are unemployed or whose homes are worth less than mortgages. (Https://www.hud.gov/topics/avoiding_foreclosure). These programs can help lower your monthly mortgage payments, reduce the amount you owe in your house, or change a second mortgage.
Rising expenses – what to do?
first Question: If I buy this does money create concern or well-being?
2nd Look for sources of income, rather than take on debt.
https://ca.finance.yahoo.com/blogs/pay-day-/student-boarders- sacrifice-extra-income-exposure-cultures-184722042.html  Bio: Penelope S. Tzougros, PhD, ChFC, CLU, became a financial planner in 1986, after serving as Professor of English Literature at Northeastern University and Hellenic College in Boston. Her desire to demystify money has led to her writing for radio, television, online courses and three books. The latest book is Your Home Sweet Home: How to decide whether to stay or retire. In all 50 states, she is registered, and securities and advisory services are offered through LPL Financial, Member FINRA / SIPC.
The views expressed in this material do not necessarily reflect the views of LPL Financial.