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By Dave Mattull

Generally speaking, your retirement funds may come from savings, investment income, and Social Security. But now, there’s another source that may help you complete the longevity planning puzzle.  Reverse mortgages are becoming increasingly recognized by homeowners and financial advisors as a smart and safe way to access an important retirement asset: home equity. Most reverse mortgages are government-insured Home Equity Conversion Mortgages (HECMs). You will often hear the terms used interchangeably. Available exclusively to people age 62 and older, a reverse mortgage could help you live more comfortably and be more financially prepared for the future.

For example, you can use a reverse mortgage to:

  • Avoid selling investments at a loss in a “down” market
  • Establish a “stand-by” line of credit that you can tap as needed.
  • Unlike a traditional Home Equity Line of Credit (HELOC), a reverse mortgage line of credit cannot be reduced or revoked, as long as the terms of the loan are met. The unused line of credit grows over time.
  • Supplement retirement income with tax-free* funds
  • Delay collecting Social Security for a larger monthly benefit
  • Pay for medical or long-term care costs
  • Finance the purchase of a more suitable home, with no monthly mortgage payments**

Some of the benefits of a reverse mortgage:

  • The ability to use your home equity to help you maintain a more comfortable standard of living.
  • Allows a homeowner to live in their own home.
  • Provides funds that can reduce month-to-month obligations.
  • Eliminates required monthly mortgage payments.
  • Healthcare needs: Pay for healthcare and prescription drugs.
  • Home improvement/home care modifications.
  • Provide a cushion for the unexpected.
  • Travel; weddings; insurances; debt consolidation.
  • Assist in purchasing a new home. Yes, you can use the Reverse mortgage to purchase a home.
  • Financial security and peace of mind.
  • Great flexibility. You can choose to take your proceeds as a line of credit, monthly advances for a set period of time, a monthly stream of funds for as long as you live in your home, a lump sum or a combination of these options.
  • No monthly mortgage payments. If you qualify and have an existing mortgage, home equity loan, or any other type of debt, you can pay it off and reduce your monthly expenses.  Or, if you own your home free-and-clear, you can get the additional funds you need with no minimum monthly repayments required. (As the homeowner, you remain responsible for paying property taxes, homeowners insurance, and homeowner’s association dues if applicable.)

As you explore your reverse mortgage options with First Integrity Mortgage Services, Inc., we will serve as your guide through the entire loan process. Here’s a basic overview of what you can expect. To learn more, contact us today.

1.      Education: I will help you determine if a reverse mortgage is the right solution for you — and if so, which type best fits your needs and goals. To help you make an informed decision, I’ll answer all your questions, assess your individual needs and financial situation, thoroughly explain everything, and prepare you for your independent counseling session. I encourage you to include your family members and trusted advisor(s) in your decision-making process.


2.      Independent Counseling: To ensure that you understand all aspects of a reverse mortgage, you are required to have a session with an independent counselor who is approved by the U.S. Department of Housing and Urban Development (HUD). It usually takes about 60 to 90 minutes and can be done in-person or over the phone.

3.      Application: I will help you complete the application and collect your documentation. I will let you know exactly which documents you’ll need to provide.

4.      Property Appraisal, Loan Processing, and Approval: We will submit the paperwork and we process your application. As a matter of fact, we order a home appraisal, which determines the exact value of your home. We’ll also order title work and existing mortgage payoff amounts. An underwriter will then review your application for approval.


5.      Closing: Once the loan is approved and final documents are ready for your signature, we’ll contact you to schedule your loan closing, which can take place at your home. Any existing mortgage(s) will be paid off with a portion of the proceeds from your reverse mortgage. After the closing and any applicable rescission period, the loan will fund and you will receive your money.
Am I eligible?

To be eligible for a reverse mortgage, you must:

  • Be at least 62 years old
  • Live in the home as your primary residence
  • Have sufficient home equity. (Contact your First Integrity Mortgage Services to find out if you have enough home equity to qualify.)
  • Not be delinquent on any federal debt
  • Participate in a consumer information session held by an independent counselor who is approved by the U.S. Department of Housing and Urban Development (HUD)

Licensed mortgage professionals at First Integrity Mortgage use their experience, expertise, and the special programs available to discover your goals, present multiple relevant options, and recommend the program that best meets YOUR needs!

To get all the facts, please contact Dave Mattull.
Office phone number: 314-878-4900
Cell phone number: 314-570-4970
Email: davem@firstintegrity.com

First Integrity Mortgage Services is a locally owned mortgage banker located at 77 West Port Plaza, Suite 200, St. Louis, MO 63146, NMSL#276593.

Visit us today at www.firstintegrity.com and see the difference!!

WE THINK. WE CARE. WE DELIVER


By Jeremy M. Durham

    Don’t put all of your eggs in one basket.  Isn’t that what we’ve been told since childhood? For those who see that Social Security will not be sufficient to allow us to live the way we’ve become accustomed to living once we retire (if it still exists at all), where do we invest our hard earned dollars so it’s still there when we need it. There’s too much risk having all of your asset tied up in one place, so we spread it around. 401k’s, IRA’s, mutual funds, etc., but do enough investors give real-estate investment the time and consideration it deserves? 

     We had seen a reduction in home values starting in 2007, but are now seeing a slow and steady recovery in those values over the 2-3 years. This is a great time to consider adding real-estate to your diversified portfolio. Single Family homes are always a wise choice for any investor to begin with. Some seasoned investors “don’t touch anything with less than 8 units”, but we all need to be able to walk before we run a marathon. And a marathon is what investing is. Over time, Investment Properties will pay dividends for the life of your ownership of that home. It will pay dividends in the form of monthly net profit (once the mortgage payment has been made) and in the form of tax deductible interest on your personal tax returns. Over time, the mortgage note will be paid down and the value of the home will likely increase. When the home is sold it will yield a considerable net profit that can be used to pay off your own personal home, or invested into a security that will distribute monthly dividends on which you can live after retirement. And there is nothing requiring you to sell your property/properties. Over 20-30 years, if an investor is diligent about paying down the mortgage note on a home, the balance on that note will be paid off and that home will be Free & Clear. Now your $100-$300 a month profit, just became $1,000 per month. If you purchase 7-10 investment homes, you do the math. Your properties can also be left to your family in your will, and or trust, just like any other type of financial account. 

    Single-family homes are the most popular choice for several reasons. The sales price and down payment required purchasing the home is traditionally lower than on a multi-unit home. The interest rate for a single family investment property will be lower than a multi-unit. Unless you employ a property management company, single family homes are easier to look after and maintain for an investor who chooses to be a Do-It-Yourselfer. 

    Investment properties are not for everyone. The risk of default is higher on investment properties than owner-occupied homes due to the lack of personal connection the owner typically has to the property. For that reason, the required down payment is 15%-20% higher than for an owner-occupied home. Credit score requirements are also higher and previous credit blemishes are scrutinized a bit more heavily. As an investor purchases more properties, guidelines will require they not only have the funds for the down payment, but also a specific amount in savings, or Reserves, for each property already owned. 

    For the level headed, responsible, diligent investor, investment properties can be the perfect commodity to expand your investment portfolio into one more “basket”, diversify your risk, and provide you with a number of tangible financial benefits for years to come. If you’ve been curious about becoming a property owner, or if I’ve perked your interest, I’d love to meet to discuss the options available to you. 


To Refinance or Not to Refinance, That Is the Question.

By: Dave Puzniak

You are inundated with advertisements from lenders offering lower rates to prompt you to refinance.   As you look to refinance arguably one of the most valuable financial assets, you must consider many factors into the decision to make sure it is the right decision for your financial situation.

If you are looking to lower your interest rate and your monthly house payment, this is called a rate and term refinance.   You may be able to get a lower rate due to changes in market conditions, having your credit improve, or seeing your property value rise.  A lower interest rate may also allow you to build equity in your house quicker. 

You can also decrease the term of your mortgage.  Shorter term mortgages like 20 year and 15-year term mortgages generally have lower interest rates, although your monthly payments are higher.   You will, however, pay off your loan sooner, reducing your total interest costs over the life of the loan. 

Another reason to refinance is to change the type of loan program.  You may change an adjustable rate mortgage (ARM) to a fixed-rate mortgage in an effort to stabilize your payments for the remainder of your time in the home.  On the other hand, you may know you are going to move with a five to seven year period and may look to the ARM to take advantage of the lower rates on the ARM loans.

Using your home as an asset is also an option.  You may look to take out some of the equity from the house to handle other financial obligations.  This is called a cash-out refinance. 

Cashing out the equity in your home can provide you with some options to handle other financial situations within your family. 

The options are endless:

1-     Renovations – allows you to make improvements to your property or help in the maintenance, put on an addition, redo a kitchen or bathroom

2-     Budgeting – allows you to pay off bills which may have accumulated and lower your overall monthly outlay

3-     Tuition Cost – allows you to help pay tuition costs and may be cheaper than student loans

4-     Debt Consolidation – allows you to help pay higher interest rate debt with a lower rate mortgage payment and improve the household budget

5-     Weddings – allows you to pay for the cost of a wedding for a child

6-     Liens or collections or judgments – allows you to pay off problem debts from lawsuits, medical issues or other problems

No matter the decision you choose to make regarding refinancing, it is recommended you use a qualified mortgage professional to assist you with your decision.  You will want to share your financial goals with your mortgage professional to provide them the information necessary to properly advise you to meet your financial goals.

Licensed mortgage professionals at First Integrity Mortgage use their experience, expertise, and the special programs available to discover your goals, present multiple relevant options, and recommend the program that best meets YOUR needs!

Call or email David Puzniak NMLS # 559106 to schedule an appointment today at 314-486-2652 or dpuzniak@firstintegrity.com to start the process of refinancing your home!

First Integrity Mortgage Services is a locally owned mortgage banker located at 77 West Port Plaza, Suite 200, St. Louis, MO 63146, NMSL#276593.

Visit us today at www.firstintegrity.com and see the difference!!

WE THINK. WE CARE. WE DELIVER.


By Tim Whitmire

Transitioning from "We would love to own our own place" or "We need more space" to purchasing a home can seem daunting. We at First Integrity Mortgage understand how important taking this step is. We take great pride guiding home buyers through this process every day. The key to an enjoyable home buying experience is planning and preparation.

The ideal time to consult with a mortgage professional to start the planning and preparation process is six to twelve months prior to making your home purchase. This allows for ample time to maximize your credit score, while also learning about common mistakes you can easily avoid with a little planning. Three key components to a pre-approval are: Credit, Employment/Income and Assets/Down Payment.

Credit

Building a great credit score not only helps get loan approval, it is also critical to obtaining the best possible interest rate. Paying bills on time makes up a large portion of a person's credit score. It is definitely important to continue to make timely payments on all accounts during the time leading up to making a home purchase

However, almost as important as making timely payments is keeping balances on revolving credit, such as credit cards, low compared to the high credit limits on each account. Credit scores also take into account factors such as the number of recent credit inquiries a person has and length of credit history, among other things.

Many home buyers want to get their financial house in order prior to purchasing a home, and do this by consolidating debt. Although this may make financial sense, it can have a devastating impact on a person's credit score. Consolidating debt, many times, includes opening a new account, closing existing accounts, and results in having one maxed out credit card. This is a common mistake that can significantly decrease a home buyer's score right before they need a high score the most. This is the kind of mistake the professionals at First Integrity Mortgage can help you avoid by planning and preparing for your purchase six to twelve months prior to purchasing a home.

Employment/Income

Ideally, it is important to not make any major employment changes leading up to purchasing a home without consulting your Licensed Mortgage Banker first. This includes changing employers and/or the structure for which you are paid. It is very important to know that variable types of income and/or employment such self-employed income, commissioned based, bonus based, overtime, and part time employment income all must have a two year history and be averaged over a two year period to be used as qualifying income for loan approval. A self-employed borrower literally has $0 qualifying income until they have been self-employed at least two years. Even though a change may lead to greater income earning potential, it is important to not make major employment changes prior to purchasing a home.

Assets/Down Payment

The best way a home buyer can help themselves is to Save, Save, Save. Having funds available for down payment and reserves makes loan approval much easier and provides home buyers the ultimate flexibility when considering loan options. Having funds available is a wonderful thing, but tracking the movement of funds can be tricky. All major deposits are scrutinized and must be documented. Obtaining loan approval is quicker and easier when less funds are being moved prior to closing. It is incredibly important to keep all documentation. Preparing ahead of time can avoid headaches during the processing and underwriting of the mortgage.

Having funds available is ideal, but isn’t always a reality. Gifts and grants may become a necessary part of the process. Many times grants require home buyer education and have income restrictions. It is extremely important to get a head start and plan ahead for such programs.

Planning and preparation

The information above is only a small sample of information considered when a mortgage professional at First Integrity Mortgage helps home buyers prepare to purchase a home and why it is so important to plan and prepare six to twelve months prior to purchasing a home. We help home buyers every day and we can help you and/or your loved ones too!

For any questions or comments, Tim can be reached at 314-402-8184 or timw@firstintegrity.com.


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