ARAMCO Report - The Mother of ALL Mortgage Blogs!

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

Debt levels burdening retirees

Posted by Mehran Aram on Thu, Apr 4, 2019 @ 16:04 PM

Unlike the generations that retired before them, the tens of thousands of Baby Boomers who are reaching retirement every day, are doing so with more debt. In fact, seniors aged 75 and older are four times more likely to carry debt into their retirement than someone the same age who retired in 1989. The value of that debt has also climbed a whopping 270 percent since that time.

Entering retirement with high levels of debt can place a heavy burden on seniors who find that social security and personal savings are not enough.

A certified reverse mortgage professional can assist those planning for retirement by evaluating the benefits of home equity programs like a reverse mortgage. Reverse mortgages allow those 62 or older to eliminate monthly mortgage payments while providing a source of income through a monthly check, a line of credit or a lump sum payout.

Meanwhile, conventional 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, Certified Reverse Mortgage Professional, Retirement, debt, Seniors, Mortgage rates, Baby Boomers, Social Security, Personal Savings, CRMP

Seniors holding on to their homes longer

Posted by Mehran Aram on Sun, Feb 10, 2019 @ 05:02 AM

More of America’s senior citizens are choosing to put off downsizing in retirement and instead are making the decision to stay in their family home. According to a new report from Freddie Mac, this may be a significant cause of the housing shortage that exists.

An analysis from Freddie Mac suggests that seniors choosing to age in place is responsible for at least 1.6 million homes not being listed for sale in 2018. For many seniors living on a fixed income, holding on to the family home is often made possible through powerful financial tools like reverse mortgages.

Improved health and longevity are giving retirees more reason to utilize their homes equity as a form of supplemental income. Reverse mortgages allow those 62 or older to not only eliminate existing mortgage payments but also to receive extra income in the form of a lump sum, monthly payout or a line of credit.

Meanwhile, conventional conforming no-point 30-year fixed mortgage rates are averaging 4.375 percent, 15-year rates are near 3.75 percent and the 5-year ARM is averaging 4.25 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, senior citizen, Retirement, Seniors, Freddie Mac, downsizing, Age in Place, housing shortage

When Does It Make Sense to Use a Reverse Mortgage in Retirement?

Posted by The Aramco Group on Wed, May 16, 2018 @ 09:05 AM

A couple speaks with their financial advisor

Many homeowners look forward to the day when they can make their final mortgage payment and own their home outright. But, during retirement, it can often help to tap into your home equity, rather than leave it sitting untouched.

A reverse mortgage is a type of loan designed for homeowners over the age of 62. Insured by the federal housing administration, it transfers equity into cash — without the stress of monthly mortgage payments. You can receive your equity either as a line of credit or a lump sum, so you can spend your money in a way that suits your retired lifestyle.

While a reverse mortgage may not be the right option for all senior homeowners, below we’ve outlined circumstances where it can make sense to use this financial vehicle to your advantage.

1. You Need Some Budget Breathing Room

Once you’re retired, you live on a fixed income which has to cover your day-to-day expenses. When unexpected medical bills and significant home improvements suddenly come your way, it can be difficult to find the extra financial cushion you need to cover these costs.

Reverse mortgages can free up your budget by eliminating your monthly mortgage payments (of course, you still must make your property tax and insurance payments). What’s more, because reverse mortgages provide you with a lump sum, you have money to use as and when you need it. This gives you peace of mind that you can deal with any future surprises.

2. You Have an Investment Portfolio

If you have a portfolio of investments that's not yet performing as well as it should, or there are downward fluctuations in the real estate and stock markets, a reverse mortgage can help.

Because this financial solution gives you access to your home equity, you have money to spend during down-market years. This means you won’t be forced to sell your investments before you’re ready, allowing you to build up a stronger retirement portfolio and strategically sell when the market is favorable for you.

3. You Want to Pay off Your Debt

Nobody wants to spend their golden years constantly worrying about debt. Unfortunately, if you’re finding it hard to sustain normal living standards on your fixed income, you may struggle to get rid of leftover debt at the same time.

A reverse mortgage can help you consolidate some of the high-interest debts that might leave a burden on your family after you pass away. This saves money on loan payments, and ensures you have access to enough cash to enjoy your retirement instead of focusing on how to make ends meet.

4. You Want to Upgrade Your Home

If you’re hoping to leave your home to your family, you may want to address any problems on your property to ensure that it’s in top condition. A reverse mortgage can help you make any necessary changes without accessing a high-interest loan.

Even if you don't want to leave your home to anyone, upgrading certain aspects of your property could be a great way to give yourself a better quality of life during retirement. From renovating your kitchen and bathroom to installing a chair lift, you can make your home easier to get around and more enjoyable to live in with a reverse mortgage.

Is a Reverse Mortgage Right for You?

If you’re still not sure whether a reverse mortgage is right for you, ask yourself the following questions:

  • Would it be helpful for me to pocket my monthly mortgage payments?
  • Would it benefit me to access the equity in my home without selling it?
  • Do I have medical expenses or debts I need to pay off?
  • Would I feel financially secure with more cash in my budget?
  • Would I feel better if I leave my family with a non-recourse loan, rather than excess debt?

If you answered yes to any of these questions, then it may be helpful to explore your options with a reverse mortgage.

Contact ARAMCO to schedule an appointment with one of our Certified Reverse Mortgage Professionals (CRMP), and find out whether this financial solution could work for you.

Topics: Reverse Mortgage, Retirement

The Role of a Reverse Mortgage in Retirement Planning

Posted by The Aramco Group on Wed, May 9, 2018 @ 09:05 AM

Stacks of coins

Once considered a last-resort income source, the reverse mortgage has become an effective and reliable tool in retirement planning for older homeowners looking for financial peace of mind.

As a form of home equity loan, the reverse mortgage allows you the opportunity to eliminate your monthly mortgage payments. The loan is repaid once the last surviving borrower passes away or moves to a different home. This flexibility combined with recent changes to regulations makes this financial option one of the best ways to tap into alternative sources of income after you retire.

With so many methods of accessing reverse mortgages, let's look at just three ways you can use this borrowing option in your retirement plan.

1. Reverse Mortgages Can Be Emergency Funds

Perhaps the most traditional use for a reverse mortgage is as a line of credit, which you can access as you need it. If there is enough equity in your home after paying off your current mortgage (if any), you’ll have the option to access your equity as a line of credit. This is one of the best ways to get a reverse mortgage because you act as your own bank, accessing your home equity on demand as you need it.

2. Reverse Mortgages Can Protect Investments

Investments are a crucial aspect of your long-term retirement strategy. Unfortunately, in a down market, your cash flow and portfolio might struggle to survive without additional help. Using incoming funds from your reverse mortgage, you can protect your investments until the market starts to thrive again.

A reverse mortgage can significantly reduce the impact of an unpredictable market on your investment portfolio, so you won't have to sell assets for a loss. This gives you plenty of additional time for the market to recover so your portfolio can rebuild.

At the same time, any of the remaining credit in your portfolio will continue to grow, increasing your borrowing power and enhancing your credit rating. This means that if you do need to access an alternative form of lending in the future, you might not struggle as much in getting approval for your applications.

3. Reverse Mortgages Allow You to Access Full Social Security Benefits

A reverse mortgage could provide you with the additional income you need to defer tapping into your social security benefits until your 70th birthday, or as long as possible.

Many financial experts recommend delaying the application for your social security benefits until you've reached the latest possible retirement age. Doing this will allow you to access anywhere up to 132% of your primary insurance amount (PIA), and means you’ll have more money to live on for the remainder of your retirement. Delaying your claim will also ensure that your spouse would receive the highest benefit available if you were to pass away. This can provide additional security for your loved ones.

Of course, delaying access to social security benefits can be difficult. There are bills to pay and living expenses to think about, which many can't afford without the help of a regular income. A reverse mortgage loan can be the answer to this problem, giving you the additional resources you need, fast.

Using a reverse mortgage as a way of delaying social security payments is a strategy that's seen some controversy in the past. The Consumer Financial Protection Bureau’s report on social security suggested that the loan could be more expensive than homeowners expect. However, further reports have commented on the inaccuracy of that announcement, noting that the document doesn't show an accurate insight into what the reverse mortgage is capable of. Of course you should always discuss with your tax/investment advisor.

Planning Your Retirement with a Reverse Mortgage

Retirement planning is different for every individual. The best way to make sure that you're prepared for the future is to start strategizing early — with the help of a Certified Reverse Mortgage Professional (CRMP) or a financial planner.

The more support you have from the specialists, the more confident you'll be in your decision to use methods like the reverse mortgage loan to support your income. Contact ARAMCO and schedule an appointment with one of our Certified Reverse Mortgage Professionals to see how this financial solution could change the way you plan your retirement.

Topics: Reverse Mortgage, Retirement

Live and Learn in These 3 Cities as a Senior

Posted by The Aramco Group on Fri, Oct 27, 2017 @ 09:10 AM

AdobeStock_116677245.jpeg

Retirement can be the ideal time to return to school and study what you’ve always wanted to learn more about. Not only do you have time and wisdom on your side, but you also have enough financial security to avoid the typical college lifestyle of messy dormitories and basic meals.

If you’re dreaming of both moving house and studying after you retire, a home close to a college could be the perfect solution. But how do you narrow down where to live and learn? Here are our top 3 retiree-friendly college cities that would make a great new hometown.

1. Berkeley, California

Berkley is situated on the shore of the San Francisco Bay, and is driving distance from several breathtaking parks including Claremont Canyon Regional Preserve and Tilden Regional Park. So, if field trips are your favorite way to learn, then Berkeley's pleasant weather and easy walkability may be just up your alley.

The city is well known for its politically progressive atmosphere, bolstered by the presence of the University of California, Berkeley (UC Berkeley). It’s also home to one of the largest religious studies institutions in the world, the Graduate Theological Union, making it the perfect place to pursue religious studies. The campuses are within walking distance of each other, allowing you to take a variety of classes across the institutions. And if extra-curricular arts and cultural immersion are among your priorities, you’ll be happy to know that the city boasts 3.05 museums per square mile, as well as live theatre and musical shows.   

Because of its proximity to San Francisco, Berkeley does have a real estate market that could leave some looking elsewhere. Housing trends in Berkeley show a 2% year-over-year rise in median sales price and a -15% drop in median rent per month, with the median sales price of a house coming in at $1,100,00. But, if you have the money, then a stunning home is not hard to come by with beautiful architecture being a constant across the city.

2. Ann Arbor, Michigan

With a population of 117,770, Ann Arbor is the sixth largest city in the state, and the location of the University of Michigan. Split between two campuses, this highly-regarded college provides half-price tuition to students over the age of 65. What’s more, as one of the Osher Lifelong Learning Institutes, noncredit educational programs are available to people aged 50 and up. The goal of these courses is to rekindle the joy of learning among more mature students without the stresses of tests, grades, and drills.

As far as climate goes, the city experiences harsh winters because of its vicinity to the Great Lakes, but the leafy parks and gardens, including the much loved Nichols Arboretum Peony Garden, more than make up for this in spring. The city has a quaint small town atmosphere, and residents are just a couple of hours from the Canadian border for an easy international adventure.

Another benefit of Ann Arbor is its reasonable real estate market, with the median sales price of a home coming in at $280,000 and and the median rent being $2,000 a month. Trends show a 4% year-over-year rise in median sales price and a 3% rise in median rent per month. This means the city is still an affordable option.

3. Austin, Texas

If arts and culture are your primary focus then look no farther than Austin, Texas. The city is widely known for the annual South by Southwest Conferences & Festivals, which take place every spring and celebrate the convergence of the interactive, film, and music industries.

Austin is also home to The University of Texas, which boasts an impressive 7 museums and 17 libraries on its campus alone. One of the most famous of these buildings is the Blanton Museum of Art, which boasts the nation’s largest university-owned collection, with a recently re-imagined permanent exhibition and world-class temporary exhibitions.

University of Texas is also an Osher Lifelong Learning Institute, offering 5 different programs, from single-lecture classes to six-week seminars conducted three times a year. In addition to this, University of Texas offers Informals Classes in a variety of disciplines and areas of interest such as health and wellness, the humanities, and performing arts. All of these can be accessed through UT’s Extended Campus, and some courses can even be taken online if you’re unable to move to the city.

Nature-lovers will appreciate the variety of green spaces to explore both within city limits and just a short drive away. One of the most charming vistas can be caught from St. Edward’s Park, known locally as the “country within the city.”

Austin falls in the mid-range point of real estate pricing with an average list price of $607,276, and a median rental cost of $1,895 per month. Trends in Austin show a -2% week-over-week drop in average listing price and a 2% rise in median rent per month.

Finding the Right College Town for You

These 3 college towns offer a range of different schooling opportunities, outdoor environments, and extra-curricular activities to suit every studying preference and moving budget. But no matter where you choose to live and learn, it’s important to consider a variety of factors when making your decision. This will not only improve your learning experience, but also your quality of life. Though you may begin by seeking out an affordable real estate market, the offerings of the nearby school and the atmosphere of the city will play a huge role in an enjoyable retirement filled with fun and learning.

Topics: Retirement, Senior-friendly cities

ARAMCO Report - Friday August 8, 2014

Posted by Mehran Aram on Fri, Aug 8, 2014 @ 17:08 PM

Continuing conflicts in Ukraine, Iraq, and Israel has lead to a traditional flight to safety in U.S. treasuries, pushing the 10 year note yield down to its lowest level since June of 2013. This has kept mortgage rates low with conforming no point 30 year fixed rates averaging 4 1/8th and 15 year rates closer to 3 1/4. Meanwhile mortgage delinquencies are at their lowest level since the 4th quarter of 2007.

And now for something, completely different: The infamous Nike Swoosh was invented by Caroline Davidson back in 1971. She was only paid $35 for it!

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942.

This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

Topics: Aramco Report, and now for something completely different, Retirement, Aramco Mortgage, Israel, Ukraine, Nike, 30 year fixed rates, mortgage, mortgage news, Mortgage rates

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!

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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

Non-Borrowing Spouses and Reverse Mortgages: What you need to know

Posted by Jay Zayer on Wed, Apr 30, 2014 @ 15:04 PM

On April 25th, 2014, HUD released their new reverse mortgage guidelines for non-borrowing spouses.  For HECM loans with FHA case numbers on or after August 4, 2014, non-borrowing spouses will be able to remain in their home and defer payment in cases where the named borrower passes away.

HUD will be updating factor tables that will be based on the youngest borrower or non-borrowing spouse and will be used to calculate the principal limit for borrowers younger than 62 years of age.

Non-Borrowing Spouses and Reverse Mortage: What you need to knowThe reverse mortgage will continue to accrue interest in accordance with the original terms and the borrower will also need to make mortgage insurance payments to the FHA.  The non-borrowing spouse will be able to sell the property regardless of equity however, a non-borrowing spouse certification will also be required prior to closing escrow (this certifies that the borrower is married to the non-borrowing spouse.)

According the Mortgagee Letter 2014-07, in the event the borrower predeceases the non-borrowing spouse, the loan repayment will be deferred for as long as the non-borrowing spouse meets all the necessary requirements. Such requirements include the continuation of the following:

1. Within ninety days from the death of the last surviving HECM mortgagor, establish legal ownership or other ongoing legal right to remain (e.g., executed lease, court order, etc.) in the property securing the HECM;

2. After the death of the last surviving borrower, ensure all other obligations of the HECM mortgagor(s) contained in the loan documents continue to be satisfied; and

3. After the death of the last surviving borrower, ensure that the HECM does not become eligible to be called due and payable for any other reason.

If the non-borrowing spouse is unable to meet these requirements, the deferral period will cease and the reverse mortgage will become due and payable. 

Although these changes will affect the loan amount that borrowers will qualify for, it will also allow non-borrowing spouses to stay in their home without the fear of being evicted down the road.

For more information regarding reverse mortgages or any of the information provided, please contact us at 877-700-0942 or click the link below.

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Topics: Reverse Mortgage, HECM, Aramco Financial, The Aramco Group, San Diego, Mehran Aram, Loans, senior citizen, Certified Reverse Mortgage Professional, Non-Borrowing, Spouses, HUD, Retirement, FHA

7 Tips for Finding Retirement Cash

Posted by The Aramco Group on Wed, Feb 12, 2014 @ 06:02 AM

With retirement comes at least some concern about finances. Without a steady income, many retirees feel anxious about their financial future—even those with sizable savings. Those fears have never been more pronounced than now as the nation recovers from the low financial points of the past five years. Almost six in ten baby boomers say that their retirement finances took a hit during the economic crisis, traditional retirement plans and real estate or other personal investments included.

Retirement is meant to be an enjoyable time, but many retirees may not be able to relax if money is a concern. Luckily there are more ways than ever to earn extra income in retirement and still be able to enjoy plenty of time off for other ventures.

If you are concerned that your income may not be enough to live comfortably, consider these tips for earning some cash in retirement:

  1. Part-time brick and mortar jobs. If you miss the social aspect of the workforce, a part-time job in a physical store or office is a good route to take. If you want an annual income boost around the holidays, look into a seasonal position at a store and earn a little extra cash to cover Christmas gifts. Many places that are looking for part-time workers go out of their way to hire retirees because they know they have a great work ethic and interact well with customers.
  2. Freelance work from home. The great thing about the Internet is that you can do work anywhere. There are thousands of jobs available for virtual assistants, customer service agents, writers, and more that can be performed from the comfort of home. Check out sites like Guru.com, Elance.com, and Arise.com to find jobs that may fit your schedule. The pros of working from home include saving money on gas, greater comfort, and flexibility in scheduling. If you’ve never worked from home, you may be surprised at how seamlessly it can fit into your retired lifestyle. Make sure you have a designated workspace though, and plenty of motivation on the days when the distractions of home could get the best of you.
  3. Downsizing. You could be sitting on your single biggest financial asset: your home. If you are concerned about cash flow during your retirement years, it may make the most sense to sell your home and opt for something smaller in size and cost. Most people buy their homes with room to grow—particularly if there are children in the family. Once the kids have all moved away though, it may be a smarter decision to sell the home and live in more manageable conditions. Talking to a realtor or financial planner can help you determine if selling your home will actually benefit you or if it makes more sense to hold on to it.
  4. Getting a reverse mortgage. If the thought of selling your home is out of the question, perhaps you should consider tapping into its equity in a different way. Seniors over the age of 62 are eligible for reverse mortgages on their homes. The process is simple: seniors receive cash for the value of their home but the loan is not due until their passing—unless they move out. Recent changes in reverse mortgage laws have tightened lending practices, but many seniors are still eligible. Talking to a reverse mortgage lender like The ARAMCO Group is the first step to determine if staying in your home and aging in place is the best option. After that, talking to family members about your decision is important so that they understand the long-term plan for your home.
  5. Starting a small business. You don’t need to have a lot of financial capital to start your own business venture. Sites like Etsy.com make it easy for people to make and sell handcrafted items to consumers worldwide. Perhaps you were in the sales industry before retiring. Consider starting a small consulting firm and earning some cash by mentoring other companies and salespeople. Think about what you did in your career—or what you always wanted to do—and then turn that passion into a small business idea. You can market it online through social media outlets and reach out to your former co-workers too.
  6. Renting extra space. If you have a home with extra space (like a granny flat), consider a renter. If you plan to travel a lot, join a site like Vacation Rentals By Owner and get paid for the time that you are away. The same concept applies to any property you have that could be used by others at a cost, making you a little extra cash in the process.
  7. Growing a garden. This may sound like more of a hobby and less of a money maker, but growing your own food can actually bring in some income. Find out if there is a local farmers’ market in your area and sign up to sell your produce to happy buyers who want to spend and keep their money local. Growing your own food saves on your own grocery bill too.

Retirement does not mean quitting work completely. Think about what money-making opportunities are right in front of you and then maximize those ideas to free up some extra cash for your retirement comfort.

 

Topics: Retirement, retirement planning, Retirement Concerns