ARAMCO Report - The Mother of ALL Mortgage Blogs!

San Diego senior population expected to double by 2030

Posted by Mehran Aram on Fri, Sep 6, 2019 @ 08:09 AM

There were approximately 375,000 senior citizens living in San Diego County as of 2015, according to San Diego Magazine – a figure that is expected to double to 724,000 over the next 12 years. While this is hardly surprising given San Diego’s status as one of the top places to retire, it presents challenges for those living on a fixed income.

San Diego is one of the most expensive housing markets in the nation with average home prices topping well over $500,000. Yet, social security income for a single retiree in San Diego is less than $20,000 per year.

Fortunately, those looking to relocate to San Diego in their golden years may find benefit in a H4P or HECM for Purchase. H4P is a type of home loan that is insured by the FHA and provides those 62 or older an opportunity to combine their down payment with loan proceeds from a reverse mortgage. Most appealing is that the loan requires no monthly mortgage payment.

Today, conventional conforming no-point 30-year fixed mortgage rates are averaging 3.625 percent and 15-year rates are near 3.125 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Reverse Mortgage, San Diego County, senior citizen, Retirement, Seniors, Reverse Mortgage for Purchase, Mortgage rates, HECM for Purchase, San Diego Housing Market, San Diego Housing, Fixed Income, H4P

San Diego is a retirement hot spot

Posted by Mehran Aram on Sun, Apr 14, 2019 @ 08:04 AM

If you’re looking for moderate weather year-round, pristine beaches and the flexibility of a suburban life with a little urban thrill nearby, San Diego is an ideal place to retire in. This is why millions of retirees are making San Diego their new home. In fact, according to a new report, the city ranks number 14 nationwide of best places to retire.

One of the drawbacks may be San Diego’s cost for housing but experts are quick to point out that for seniors, this may not necessarily be a deal breaker. Powerful financial tools like a HECM for Purchase (H4P) eliminate the cost barrier to buying a home. H4P is a home loan insured by the Federal Housing Administration that allows those 62 or older to combine their down payment with loan proceeds from a reverse mortgage.

Launched in 2008 by the FHA, H4P is easier to qualify than a conventional loan and can be used for the purchase of a single-family home, townhome and FHA-approved condominiums. Most appealing is that they loan requires no monthly mortgage payment and can help free up much needed cash in retirement.

Today, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent, 15-year rates are near 3.625 percent and the 5-year ARM is averaging 4.00 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.

Topics: Reverse Mortgage, HECM, San Diego, Retirement, Reverse Mortgage for Purchase, HECM for Purchase, San Diego Housing Market

Buying a New Home with a Reverse Mortgage

Posted by The Aramco Group on Thu, Apr 23, 2015 @ 13:04 PM

Did you know there is a way to buy a home and never make a mortgage payment?

Imagine this scenario:

You have $200,000 and you are looking for the perfect home that suits your retirement.

You are looking forward to buying your next home outright because you have spent a lifetime making monthly mortgage payments and to continue to would be a drag.

You are scared that $200,000 is not enough to find a home in San Diego.

You and your spouse engage a realtor, and look around the San Diego area for a perfect home or condominium, and you are disappointed that you cannot find any homes that…

1) Suit your family’s needs,

2) Are in your price range, and

3) Are in the neighborhood you want them to be.

Is this home the right size?

What are you to do?

Consider a using a reverse mortgage as a tool to get the right home.

If you or your loved one are over the age of 62, then you might qualify for a Reverse Mortgage for Purchase. It could expand your buying power and you still won’t have to make mortgage payments — if you do not want to!

The loan amount one can qualify for with a Reverse Mortgage for Purchase is based on the age of the youngest borrower. If the youngest borrower is 62 or over, then the loan can be the lesser of 52% the home’s appraisal value, the purchase price or the maximum lending limit.

Let’s go back to our situation where you and your spouse have $200,000 and are looking for the perfect San Diego home to right-size into retirement. If you and your loved one are 62 and qualify for a reverse mortgage, then 52% of the appraised value of the home you find can be covered by the reverse mortgage! 

You find the perfect home for $390,000. You could never afford it without a loan (or a winning lotto ticket), but with your reverse mortgage covering 52% ($202,800) now you can use $187,200 of your money to buy a home worth nearly twice as much as you could have purchased in cash.

Even better: the Reverse Mortgage for Purchase works just like a normal Reverse Mortgage. You retain the title to the home, and the loan does not come due until the last borrower leaves the home. The loan is non-recourse, so the bank can never come after you, your heirs or your estate regardless of what happens in the housing market.

You got everything that you set out to accomplish: you found a home that…

  • Suits your family’s needs,
  • Is in the right neighborhood,
  • Requires NO monthly mortgage payments,
  • And was within reach of your original budget!

You got everything you were looking for with the help of a reverse mortgage!

Look around you for a moment, and try to see the nooks and crannies of your home in a new light. Would you like to spend your future in a home that is better suited to your needs? If so, call ARAMCO Financial at (760) 438 – 2552 to see if a Reverse Mortgage for Purchase is right for you. Or sign up for our free educational workshop at www.ARAMCO.biz.

Don’t just downsize, right-size with a reverse mortgage!

Topics: Reverse Mortgage, HECM, home prices, home purchase, San Diego, purchase, Price, Reverse Mortgage for Purchase, Home Purchasing, HECM for Purchase

Purchasing Your Home in Retirement: Using HECM Reverse Mortgage

Posted by Craig Sutliff on Thu, May 8, 2014 @ 09:05 AM

Downsizing? Refinancing? Wanting a change of scenery? It is a common misconception that you can’t use a reverse mortgage to purchase a home. That is entirely false!

Purchasing Your Home in Retirement:Using an HECM Reverse Mortgage

Many of our elderly clients live in homes in which they’ve raised their families and some are looking to downsize or move into a retirement community. This move allows them to take advantage of less upkeep of a home and to enjoy their time doing other activities. With a Home Equity Conversion Mortgage (HECM) they are able to accomplish this, and can avoid moving into costly retirement homes. 

Downsizing is not the only way to reap the benefits of a HECM Reverse Mortgage. With many of our clients, we are able to list and sell their home so they can go on to purchase a new home. This is accomplished by using some or all of the proceeds they received from selling their home as a down payment on a new home. We simply finance the purchase of this new home with a HECM Reverse Mortgage for purchase, and the homeowner enjoys their new home with out the usual burden of monthly payments. If the property purchased is a home of equal or lesser value than your existing home, you in most cases can transfer the current taxable value to your new property (of course it's a great idea to consult your tax professional, we're just the real estate and. Mortgage pros). This means that property taxes WON’T go up AND, with the Reverse Mortgage, you will have NO mortgage Payment (just be sure to follow the terms of the loan)! Even with these benefits, you are not restricted from purchasing a higher-value home if you so choose.

Owning a home is also not a prerequisite to get a Reverse Mortgage. Many seniors that are currently renting and may have saved money over the years or came into an inheritance, can use some of their savings to purchase a home using a Reverse Mortgage.  This provides a tremendous amount of freedom and security for the senior. With ownership, the housing payment is essentially fixed and you, the owner, are no longer subject to ever-increasing rent payments.

While being a homeowner means being responsible for property taxes, insurance, and maintenance, this option provides a freedom that renting does not. With owning a home, YOU are in charge, allowing you to make changes to the space, etc. without having to worry! With no mortgage payment, the costs of owning a home can be very manageable and the benefits of owning far out-weigh the uncertainties of renting.

Call The ARAMCO Group at 877-700-0942 for more information on how a HECM for Purchase Reverse Mortgage can help you!

Learn More

Topics: Reverse Mortgage, HECM, home buying, senior citizen, Retirement, Aramco Mortgage, Aramco Properties, Retirement Concerns, downsizing, retireing without a mortgage, 10-31 excahnge, Selling, HECM for Purchase

HECM For Purchase

Posted by The Aramco Group on Tue, Dec 3, 2013 @ 23:12 PM

Last year the home buyer rejection rates for major banks ranged from 11% to 34% according

to the Federal Financial Institutions Examination Council.   Out of 556,302 HECM, HECM for Purchase, Home Buying, Downsizingoan applications submitted to purchase a new home, Wells Fargo, JPMorgan Chase and Bank of America denied 131,128 applications.  Many of these loans were denied because of credit scores, debt-to-income ratios, and job history. 

One option that works great for borrowers 62 and over is a HECM for purchase.  HECM(Home Equity Conversion Mortgage) better known as a reverse mortgage is a great option and can be used to purchase a home.  A HECM for Purchase does not currently have requirements for credit score, job history, or a maximum debt to income ratio. 

Let’s say a borrower is 67 years old.  They would qualify for a HECM for Purchase with a down payment of about 45% and because this is a Reverse Mortgage the borrower can live in the home without ever making a mortgage payment.   

This is also a great loan product for borrowers that are selling a home and downsizing to a smaller home, a single story home or maybe just want to live closer to friends and family.   

This is probably not the best loan option for an individual that has sufficient income/credit score and can qualify for conventional financing. With that being said, this can be a great financial tool used to help borrowers purchase a new home that may not have qualified without the HECM for Purchase. 

 

 

Topics: Reverse Mortgage, HECM, home buying, senior citizen, Retirement, Home Equity Conversion Mortgage, Loan Options, HECM for Purchase