Basics of Reverse Home MortgageA reverse home mortgage is a type of loan that allows homeowners to access a portion of their home equity without having to sell their home or make monthly mortgage payments. Unlike a traditional mortgage, the loan balance of a reverse mortgage increases over time and is typically only repaid when the homeowner sells the home or passes away.Differences from Traditional Mortgage Reverse mortgages do not require monthly mortgage payments, while traditional mortgages do. The loan balance of a reverse mortgage increases over time, while the loan balance of a traditional mortgage decreases over time as payments are made. Reverse mortgages are typically only repaid when the homeowner sells the home or passes away, while traditional mortgages are repaid over a set term. A Financial Solution for Seniors For seniors, a reverse mortgage can be a great financial solution. It allows them to access the equity in their homes without selling or giving up ownership. Reverse mortgages are also a great way to supplement retirement income. They provide a steady stream of funds that can be used to cover living expenses. With a reverse mortgage, seniors can enjoy their retirement years and have peace of mind knowing they have a reliable source of income.Reverse mortgages are also a great way to pass on wealth to heirs. The loan is paid off from the sale of the home, and the remaining equity is passed on to the heirs.Eligible homeowners obtain reverse mortgages for many reasons including: Repairing or modifying the home to meet the physical needs of getting older Supplementing retirement income to meet expenses Managing the costs of in-home care Paying off an existing mortgage Paying increased bills due to inflation and economy Paying property Taxes Delaying Social Security Providing a source of funds for living expenses in lieu of liquidating financial investments during times of market downturn or disruption Helping retirement savings last longer Purchasing a retirement home Recent ClientsA retired couple in their late 60s, John and Susan, were struggling to make ends meet on a fixed income, due to inflation and the cost of living increasing. They had significant equity in their home but were hesitant to sell it and downsize because of the current real estate market. They decided to explore a reverse mortgage as an option to access their home's equity without having to sell it. The reverse mortgage allowed John and Susan to access their home's equity and use the funds to pay off their existing mortgage and cover their increased living expenses. They were able to stay in their home and maintain their quality of life, without having to worry about making monthly mortgage payments. Mary Anne, a retired infusion nurse, suffered some medical challenges and her insurance did not cover all of her additional expenses. She decided a reverse mortgage was her best option. It allowed her funds to seek non-traditonal treatment and was able to eliminate the financial stress in her life, allowing her body to heal.A retired widow in his late 70s, James wants to stay in his home as long as possible. His home was mortgage free and he intends to leave it to his two children who live out of state. The reverse mortgage allowed him to access his home's equity and use the funds to make the modifications to continue staying in the home unassisted.It allows him the peace of mind knowing the has additional money to pay an in-home care giver if and when he needs one.He is able to stay in his own home and now worry about being a burden on his out of state children. He expressed to me that feeling of relief is priceless.This article was submitted by Nicole Cramer with Anchor Funding, Inc. Contact Nicole at 251-349-9891 or email her at email@example.com for more information about whether a reverse mortgage can work for you.
Buying a home at a home auction is not a new process, but its one thats unfamiliar to most. There are lots of myths surrounding home auctions, and plenty of people who think of a home auction as a last resort, rather than a first choice.RealtyHive is here to clear the air. Knowing about home auctions could make your next home purchase easierand could even save you money.Types of Home AuctionsIf you think a home auction only happens in the event of a foreclosure, youre not alone. However, there are actually multiple types of real estate auctions:Short SaleForeclosures are time-consuming and expensive. When a homeowner owes more on their mortgage than what the house is worth, they might have the choice to put their home up for a short sale auction and avoid foreclosure.From a buyers perspective, this type of real estate auction has its pros and cons. Home inspections are a toss-upyou might be able to get one, or you might not. Oftentimes, these sales are cash only, which works great for some, but isnt ideal for home buyers needing to finance the purchase. Short sale auctions are also difficult to find for regular home buyers.Sheriff/Trustee/Federal SaleThe name changes depending on location, but this is a foreclosure auction. The bank wants to get the money or the property. If youre able to purchase, youll need to have the funds right away and there are typically no inspections. More often than not, youll buy without even getting to see the site first.AuctionRegular real estate auctions happen at the sellers choicetheyre not foreclosing or at risk for it. Interestingly enough, this type of home sale happens a lot in Europe and Australia. Home auctions are just beginning to pick up speed in the US.Auctions can have high fees15% at the highest. Whether theyre paid for by the seller or the buyer depends, so as a buyer, your expenses could dramatically increase. These fees do not include working with a real estate agentan additional 6% commission on average.That being said, luxury properties often sell faster at an auction than if going the traditional route. If youre looking to buy an average/regular home and are in the US, it will be harder to find one through real estate auctions.Time-Limited EventsThis is an exclusive home auction, available through RealtyHive. Here are some of the draws:Benefits of Time-Limited Events for Home BuyingDont require a reserveThe market helps find the right price.Contingencies are still allowedBuyers (and their potential investment) are still protected.Traditional financingUnlike other auctions, buyers can still apply for loans to finance their home purchase.No crazy feesBuyers are waived from having to pay expensive fees.All propertiesTime-limited events work for all types of properties, including vacant land and commercial properties.At RealtyHive, we truly think we offer the best home auction option on the market. The countless sellers and buyers who have worked with us would agree. But dont feel as though you have to take our word for itthis blog is for information purposes, not a sales pitch. No matter the buying route you go, its good to know how home auctions work.
Congratulations! Youve been searching for the perfect home, putting so much time and energy into the process, and now you finally found a home where you can see a future for yourself. But chances are if you love the home, another potential buyer probably loves it too. So before you take the leap and make an offer, here are some tips that you should keep in mind to stand out from your competitors and easily seal the deal.1) Setting the Right Starting PriceThe most influential component of an offer is the price you propose to pay for the home. Work with an experienced agent to come up with a strong offer that makes sense for you and the seller first. Otherwise, your feelings of excitement and impatience can quickly become impulsive decisions, resulting in a weak offer that hasnt been thoughtfully prepared. Here are a few tips to make sure that your emotions dont get the best of you when setting a price.Research the MarketIts never a bad idea to understand what the home is selling for when you make an offer. But at the same time, the listing price isnt everything. Instead of basing your offer off of one number, take the time to see what similar homes in the neighborhood have sold for and compare. Understanding how this all works together can be difficult if you are doing it by yourself, so we recommend that you use an agent to help you. Agents will do the market research for you and help you create an attractive offer based on sales of comparable homes in the area.Research the SellerWhile market statistics can indicate what the price a home might sell for compared to others, this doesnt take an individual homeowners situation into account. What if the seller is struggling to find a new home and wants to delay closing? Or maybe they are being forced to leave their home for relocation reasons and need to get the transaction done as soon as possible. By taking the time to do a little extra research on the individual home and its seller in addition to the market, you may be able to find the motivations behind the sale and craft your offer more appropriately.Buying a home takes more than a simple exchange of money for property. There are several costs that go into the process of buying a home that you will need to account for before you make that decision especially if you want to save yourself from stress later on.A down payment can be one of your largest upfront expenses, no matter what type of mortgage you decide on. You might opt for a conventional mortgage with a 20% down payment or a loan insured by the Federal Housing Association (FHA) with as little as 3.5% down. But no matter what you have to pay upfront, its best to start saving early and prepare for a large expense. Even a 5% down payment on a $200,000 home, for example, is still $10,000 thats nothing to laugh at. If you arent sure how to start saving, think about the small steps you can take, whether its setting aside tax refunds or not going to Starbucks as often. The little things can really add up! Its also important to save for those monthly payments that come after the down payment. Whether you decide on a loan that has a shorter or longer term, monthly payments are an ongoing expense that you need to account for. If you have a conventional loan and didnt put down 20% upfront, your lender will likely require you to pay private mortgage insurance (PMI) as part of your monthly payment. Annually, this expense may make up 0.5-1% of the cost of your loan and serves to protect your lender if you stop making payments. But no matter how much you put down initially, you want to feel confident that you have the means to make a full payment every month.Dont forget closing costs! This chunk of money will go toward all of the important steps that ensure your home is ready to live in. According to Realtor.com, closing costs account for anywhere from 2% to 7% of your homes final price. These are all expected expenses, but what about those unexpected costs? Unfortunately, homes dont have superpowers and are always prone to unforeseen issues. The garage door could suddenly stop working, your oven could die on you or a big storm could damage your roof. These are all problems that might need a quick fix, and if you dont have any emergency savings that you can contribute, youll be left scrambling.2) Be Careful with ContingenciesIts important to think about any contingencies you have and clearly spell them out for the seller and the sellers agent. These include any outside requirements that must be met before you can complete your end of the transaction. There are a few common contingencies that are included in many offers, like inspections and appraisals, that protect buyers in case the home has issues that werent initially stated. Therefore, its a good idea to include contingencies like these to ensure that you can change your offer or back out if needed. At the same time, be mindful when stating your contingencies. If you end up having too many, its possible you might turn off the seller. Sellers often see contingencies as obstacles in the transaction, so if you have a long list of them, it might put a red flag on your offer. Work with your agent to decide what you really need before you can buy a home and focus on those rather than your list of wants.3) Don't Forget About Earnest MoneyEarnest money can make you stand out in a pool of competitive offers, because it shows a level of commitment from buyers. By putting down earnest money, youre agreeing to pay the sellers a deposit before buying the housewhether or not you actually go through with the transaction. Therefore, its important to be serious about the home youre making an offer on. According to Realtor.com, paying 1-2% of the homes purchase price in earnest money is normal for most markets. However, in competitive markets this amount could be up to 10%. This is another reason why its so important to use an agent. They can help you determine a competitive amount based on your market. 4) Make It PersonalIts common for sellers to be emotionally attached to their homes, and they want to find a buyer who will love it and take pride in caring for it as they do. To stand out against the rest of the offers, and show the seller who you are, consider personalizing your offer. Share your story. Include a message that explains who you are, what your family is like and what excites you about the home. Share what youre most looking forward to experiencing in that house and what it would mean to you to call it yours. By making your offer personal, it will help the seller see you as someone who will love the home, rather than a mere name or dollar amount.5) Move Quickly, But with IntentionWhen creating a competitive offer, its important to move quickly because you never know how many other people are doing the same. If a seller sees an offer they like before they have seen yours, they just might accept it. So dont put it off! After you see a home, be honest with yourself. If you can envision yourself living there, start working with your agent on an offer right away. But if theres any hesitation, always look to your agent for clarity and guidance. They can help you weigh the pros and cons of the home and ensure that you move forward with intention, whether that means submitting an offer or not. If youre worried about everything getting done the right way, especially when youre in a time crunch, you should be able to trust your agent. At HomeSmart, our agents have been carefully trained to understand every step of the offer process and make it as stress-free as possible for the buyer. Our agents understand that youre human, which is why they wont just help you write the offer, but theyll take your thoughts and opinions into account while doing so. By working with a HomeSmart agent, you can feel confident in having a competitive offer that will secure the home of your dreams.