Lately, I’ve been trying to help people with mortgage options that they may not have thought of that will help them with a problem they are having.
One example of what I am working on, is for an elderly person that is having serious problems making ends meet; he simply cannot pay his mortgage, cannot pay his bills, and is worried about losing his house. The best solution in his case is a Reverse Mortgage. Reverse Mortgages have changed quite a bit in the last few years. They are safer, with built in protections that make sure that the homeowner will never lose their home. In this person’s case, his mortgage will be paid off, so that will put extra dollars in his pocket every month, and he won’t have to worry about losing his home. An added benefit for him is that it also includes a Home Equity Line of Credit that he can tap into for emergencies that will grow every year. Reverse mortgages are not for everyone, but for some people it’s a lifeline. If you’re 62 years of age or older and think this might be of help to you, I’d be happy to prepare a detailed analysis of your particular situation that will go over all the ins and outs of this ever improving loan, that may be the solution that you are looking for.
I also hear quite often from people that are looking to buy a house without breaking the bank. The problem is that homes that are less expensive need lots of work, and since purchase money mortgages do not include cash to update the home, prospective homeowners and their real estate agents simply move on to the next house, passing up on properties that would be perfect in every other way. The option of taking out a home equity line of credit does not work, because by the time the prospective homeowner puts down their down payment, there is no longer any equity to draw from.
The solution I’ve been recommending to my clients and their brokers is Renovation Financing. There are some great mortgage products that have started to become popular lately that allow the potential home buyer to add renovation costs to their new first mortgage. It adds a whole new world of possibilities, because suddenly a home that needs a new kitchen, extra bedrooms, etc., is still an option. And the equity part is taken care of as well, because as opposed to a home equity line which uses the current value of the home to determine the amount you can borrow, Renovation Financing will use the value of what the home will be after it’s been renovated to determine the amount that can be borrowed. Imagine the possibilities! There’s no reason to pass up on a house on a great block because it’s just not up to par with what you are looking for. Now there’s a great solution that can make that house your home.
Renovation Financing products are not offered by many lenders, and most mortgage brokers don’t really understand them, so they don’t offer them. I’m happy to say that I do, and if it sounds like something that might work for you, I am more than happy to help.