Record Price Decline

I found this interesting information on CNN Money and thought it worth sharing. This real estate market is not for the faint of heart.

The question is, "How long can this last?" if any one has the answer please let me know. So many people are upside down in their properties right now and wondering if it is worth waiting it out or is now the time to find a way out. Jingle mail is back big time. It is hard to think of making payments on a house that is not worth as much as your mortgage. When is one throwing good money after bad? Is there a moral issue in just walking away from your mortgage? How long does a foreclosure usually hurt one's credit and can you ever get another mortgage? If there are any accountants or loan brokers out there that would like to comment on this please, I welcome your post.

Reverse Mortgages

I've had lots of clients ask me, "Heather should I sell this home or should I take out reverse mortgage on it?" and "How does the reverse mortgage work?". Well, first let's keep in mind that I am a Realtor not a loan broker but I will try my best to answer the basics.

1.) WHAT IS A REVERSE MORTGAGE? A "reverse" mortgage is a loan against your home that does not have to be paid back until you no longer live in the home, die or sell your home. With a reverse mortgage, you can take the equity out of your home and not have to worry about monthly payments. The cash can be paid to you in a number of ways:

• A single lump sum of cash.
• A regular monthly cash advance
• As a credit line that allows you to control the amount available
• A combination of the above

To be eligible for most reverse mortgages, you must own your home and be 62 years of age or older.

2.) IS A REVERSE MORTGAGE GOOD FOR YOUR NEEDS?

AARP has five questions you should ask yourself if you are considering a reverse mortgage. They are:

• Do you really need a reverse mortgage?
• Can you afford a reverse mortgage?
• Can you afford to start using up your home equity now?
• Do you have less costly options?
• Do you fully understand how these loans work?

Before you decide whether to take a reverse mortgage or sell your home and rent read the article on the subject on the AARP website. Another good source for information on reverse mortgages is The U.S. Department of Urban Development (HUD).

These mortgages can be VERY expensive and one should give a lot of thought before taking one out. Always talk to a professional money advisor before making the decision.