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GOLDEN VIPs
Your needs have changed and so has your vision. It has nothing to do with eyeglasses and everything to do with the way you embrace life. This page is dedicated to those who have gained that wisdom. Remember when we had to drive from one building to another, take a number and sit in a waiting room for hours before a clerk told us we were in the wrong office? You've earned the right to sit in front of a keyboard and let the flow of information to come to you!
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WHAT IS A REVERSE MORTGAGE?
By definition, a reverse mortgage is a special type of mortgage loan that allows homeowners to borrow against the equity in their house without having to pay it back until they sell their home. As the name implies, it works in reverse of traditional mortgages. Rather than you paying monthly amounts to a mortgage company, the mortgage company pays you a fixed sum that can be disbursed as a cash lump sum, monthly payments or line of credit. This type of mortgage is only available to homeowners above the age of 62 who have equity in the home that is their principal residence. You've worked hard to build up the equity in your house. A reverse mortgage can be a great way to tap that money when you need it most. With the uncertainty of Social Security, rising healthcare costs, costly home repairs or family emergencies, your home can provide you with financial security if need should arise. And since you're borrowing the money rather than earning it, it's tax-free. It can be a great tool for someone who is house-rich but cash-poor. The product is governed by the National Reverse Mortgage Lenders Association (NRMLA), headquartered in Washington, D.C. Their role is to educate consumers as to the availability of reverse mortgages, train lenders on needs of older Americans, develop Best Practices and Code of Conduct to which lenders must adhere, and promote reverse mortgages in the media. The most common loan is a product insured by the Federal Housing Administration (FHA) called the Home Equity Conversion Mortgage, accounting for almost 95% of the loans written. Other lenders have recently entered the market offering similar products. Programs vary by loan limits, interest rates and fees. Some limit the purpose you can use the funds for. Yet for all the advantages of a reverse mortgage, there are pitfalls. There's always a risk when you put your home on the line. These loans can be quite costly with fees and interest rate. And scam artists who prey on the vulnerable double their pleasure when they find victims both elderly and in financial need. The loans themselves are quite complicated. That in itself can be problematic, particularly for older applicants. The reverse mortgage carries the same fees as its traditional counterpart. You'll be charged an appraisal fee, origination fee and recording fees. Some lenders even charge up-front fees and close out fees. Be sure to factor in all the charges in choosing your loan, sometimes the lowest interest rate isn't your best option. One payout option allows you to take a fixed monthly payment for the rest of your life. While this guarantees you'll never lose your home, inflation may rise to where you can't live on that same fixed amount. And since none of us know how long we'll live, there's no assurance you'll collect enough in payments to equal your home's value. The lender can find a cheap bargain here. Before you can apply for a reverse mortgage, you should meet with a HUD-approved counselor who can direct you to the best program for your situation. The service is free. Beware of outsiders representing themselves as a counselor. This is a ripe area for scam artists who charge a hefty sum for providing what should be a free service. Learn more about reverse mortgages, find consumer guides and locate a local lender. Find more information on reverse mortgages, a HUD counselor and HUD lender. SCAMS, SHAMS AND OTHER RIPOFFS
Our inboxes are flooded with warnings from well-intentioned friends advising us to avoid everything from boiling water in the microwave to pumping gas. There are several web sites dedicated to separating true threats from urban legend. But the easiest way to do some quick research is to feed the keywords into a search engine. Your results will instantly tell you whether you should hit the forward or delete key. Here are a few legitimate scams worthy of forwarding: LONG-DISTANCE CALL FORWARDING SCAM: The supposed identity differs from one caller to the next, but their purpose is the same. They persuade you, using one guise or another, to forward their phone call to another number. You'll be instructed to dial either *72, 72# or 90#, depending on your phone company. Once you do, your phone bill will begin to rack up charges for 900 number 'sex lines' or outrageously high long distance rates. Most of these calls originate from prisons, where long-distance calls can be charged 84 cents per minute. Calls from prison inmates are collect only, which means you would get a recording identifying the origin of the call and requesting your permission to accept the charges. To get around this, prisoners often work with an accomplice on the outside who accepts the call and then initiates a 3-way call to your phone number. You hang up, they don't. They continue to use your line, and your phone bill, until you deactivate the service. VIATICALS: Looking for a higher rate of return on your investments? Here's one to avoid. In a typical viatical transaction, a terminally ill person expected to die, usually within two years and in need of cash, sells his or her life insurance policy for less than its face value. The buyer/investor agrees to pay the future premiums and collects the policy's full benefit when it matures - that is, when the seller dies. The earlier the seller dies, the larger the return on the investment. Promoted as a low-risk/high yield investment opportunity by the broker, this vehicle will only leave you broke. CREDIT REPAIR FIRMS: One of the most valuable things you can possess is good credit. But life's challenges can leave even the most honest among us in dire straits. While there are a number of nonprofit groups dedicated to helping you re-establish your sterling rating, others do nothing more than add to your mounting debt. Beware of any firm that claims they can erase derogatory reports in a few short months, even if they are accurate. While credit bureaus will remove a rating found to be in error, those that are accurate will remain until you have re-established a good payment history. And this can only happen over a period of time. For more information on these, including a scam alert library, visit aarp.org/bulletin/consumer/. USE OUR DOCUMENTS LOCATOR TO KEEP IT ALL TOGETHER!! If you're like me, you finally have it all together but don't remember where you put it! You've worked long and hard to prepare for retirement, created all the necessary documents for unseen circumstances and legal issues. But they can't help anybody who does not know where they are located. Including yourself! In a time of crisis, you don't want to be searching for social security numbers, wondering if your parents have a will or how to find their insurance agent. Discovering what legal documents exist, knowing where they're stored and producing them on demand is an inevitable responsibility. Our Documents Locator will help you avoid the inconvenience and stress of searching for important papers. The Documents Locator stores a lot of information, don't expect to complete it in one sitting. And the information you record is confidential so be sure to keep it in a secure place. If you're completing this for your parents, keep a copy for yourself. And if it's on your own behalf, make sure key family members get a copy. It's a good idea to review your documents file every six months to keep it updated. You'll need Adobe Acrobat Reader to view and print out this file. If you don't already have it installed, the download is free from Adobe's Web site. Get your Documents Locator now! |
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