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 A Reverse Mortgage can help Seniors 55 yeas of age or older to mitigate the ravages of the ever growing inflation we are all suffering.

? Learn about a Reverse Mortgage 55 and Older:
 Florida Reverse Mortgages : SeniorReversefForida.com/EnglishReverse

 ? Aprenda sobre la Hipoteca Revertida 55 y mayores:
 Florida Reverse Mortgages : SeniorReversefForida.com/EspanolRevertida
 

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 Florida Home Financing : Home Equity Loans

Call me 786-262-6486  or email me RodKohly@gmail.com or use the Form provided  below to request information. No Cost or obligation:  

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♦ Learn about a Reverse Mortgage 55 and Older: 
Florida Reverse Mortgages : SeniorReversefForida.com/EnglishReverse
 
♦ Aprenda sobre la Hipoteca Revertida 55 y mayores:
Florida Reverse Mortgages : SeniorReversefForida.com/EspanolRevertida

♦ Learn about Home Equity Loans: 
Florida Home Financing : Home Equity Loans

Call me 786-262-6486  or email me RodKohly@gmail.com   or use the form provided below to request information. No Cost or obligation:   

Dealing With Debt in Retirement
 By Chris Casacchia   

The problem of debt among retired people is on the rise. Nearly one of every two Americans now expects to retire in debt, according to a recent survey from MagnifyMoney researchers. Among those 70 years and older, total debt has exploded from about $350 billion in 1999 to $1.42 trillion through the first quarter of this year. That’s up a whopping 305%, according to data from The Federal Reserve of New York.  

Many retirees face financial and income constraints, which makes managing debt particularly tough, according to Grant Higginson, president of Homeowner Debt Relief in New York City. “First, retired people often have a fixed income, which can make it difficult to keep up with monthly payments,” he said. “Second, interest rates on debt may be higher for retirees, making it even more difficult to pay off the debt.”  

Recent economic developments are adding fuel to the fire, added finance expert and blogger Samantha Hawrylack. “One is the increasing cost of living, which has made it difficult for many retirees to make ends meet on a fixed income,” said Hawrylack. “Many have seen their investments plummet and have been forced to take on debt just to keep up with their expenses.” 

Debt Is Widespread and Varied 

Baby boomers (those 58 to 74 years old) carry an average mortgage debt of $191,650, according to Experian data. They also hold the second largest average student debt—roughly $40,512—only surpassed by Generation X, according to Educationdata.org. 

Not only are older Americans shouldering more debt than ever before, but they are relying more heavily on high-interest debt to make ends meet. According to Experian’s 2020 State of Credit?report, baby boomers on average carry $25,812 in non-mortgage debt, which includes credit cards, personal and student loans, and loyalty cards typically through retail outlets. 

“Many retirees use credit cards to pay for everyday expenses, such as groceries and gas,” explains Linda Chavez, founder and CEO of Seniors Life Insurance Finder in Los Angeles. “Others use them to pay for larger purchases, such as vacations or new cars.” 

Strategies for Tackling Debt 

Juggling multiple sources of debt can be stressful, especially for those on a fixed income. However, if you are one of the millions of retired people dealing with retirement debt, making strategic decisions about prioritizing repayments can offer a clear path forward. 

Focus on reducing debt with the highest interest rates first, especially credit card debt, suggests financial planner Andrew Rosen president of Diversified LLC, a financial planning firm. “Debt with lower rates, such as a low fixed-rate mortgage, is less of an issue, and you’ve likely already budgeted for this expense in your retirement,” said Rosen. 

Another way of making overwhelming debt manageable is by consolidating debts into a single monthly payment.  

“It can also help you get a lower interest rate,” said Chavez, who suggests struggling retirees can also seek help from vetted debt relief service providers. “A debt relief company can help you negotiate with your creditors and get a lower interest rate,” she said. “They can also help you consolidate your debt.” 

Anyone considering debt consolidation should consult with a nonprofit credit counselor before making a decision. 

Take Advantage of Financial Vehicles and Government Programs 

Though taking on debt to repay debt may seem counterintuitive, depending on the interest rate, it may offer a path to consolidation and a much lower interest rate.

A reverse mortgage, which allows a portion of home equity to convert into cash, could be ideal for those 62 and older with significant equity in their home, according to financial planning specialist Rachel Burk. “It can be used to provide an income stream that can cover student loans or credit card debt,” asserts Burk, a financial advisor at Offit Advisors in Columbia, Md. 

“This can be a great way to supplement your fixed income and make ends meet,” adds Hawrylack, who also recommends retirees with debt explore additional debt reduction options, including home equity loans and government programs. 

For instance, the Social Security Administration offers the Supplemental Security Income program for adults and children with disabilities, providing “extra income to retirees who are struggling to make ends meet,” according to Hawrylack. 

For retirees with mounting financial obligations, the idea of paying off debt may seem out of reach. Rather than looking away and continuing to rack up debt, some common-sense measures, like tapping home equity and finding lower interest options, may offer a light at the end of the tunnel.  

Seniority is published by Finance of America Reverse LLC. The views expressed in this publication are those of the author alone and do not necessarily reflect the views and opinions of Finance of America Companies. This article is intended for general informational and educational purposes only and should not be construed as financial or tax advice. For more information about whether a reverse mortgage may be right for you, you should consult an independent financial advisor. For tax advice, please consult a tax professional.

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♦ Learn about a Reverse Mortgage 55 and Older: 
Florida Reverse Mortgages : SeniorReversefForida.com/EnglishReverse
 
♦ Aprenda sobre la Hipoteca Revertida 55 y mayores:
Florida Reverse Mortgages : SeniorReversefForida.com/EspanolRevertida

♦ Learn about Home Equity Loans: 
Florida Home Financing : Home Equity Loans

Call me 786-262-6486  or email me RodKohly@gmail.com  or use the form provided below to request information. No Cost or obligation:   

The best times to get a reverse mortgage
 

By Tim Maxwell  Edited By Angelica Leicht  April 16, 2024 / 9:47 AM EDT / CBS News

 A reverse mortgage may (or may not) make sense depending on the timing of the loan
 

According to the latest Consumer Price Index report, inflation once again ticked upward in March. Persistent inflation makes it challenging for Americans to manage their expenses, and that's especially true for seniors who are no longer in the workforce or are living on fixed incomes.

On top of that, elevated interest rates, combined with limited retirement income, make it harder for seniors to qualify for home equity loans and other forms of financing to ease their burden. In this environment, many seniors are turning to alternatives, such as reverse mortgages, to borrow money.

A reverse mortgage can help qualified homeowners convert some of their home's equity into much-needed cash to pay off debt or live more financially secure in retirement. While reverse mortgages aren't for everybody, they can be beneficial in certain situations. 

The best times to get a reverse mortgage

Let's examine a few of the best times to consider getting a reverse mortgage.

When you don't have enough income to pay your bills

Many seniors have significant equity in their homes after paying down their mortgage over time, especially if home values have increased. Unfortunately, many of these same seniors struggle to meet monthly expenses.

"A reverse mortgage is tailored precisely for situations like this," says Rose Krieger, senior home loan specialist at Churchill Mortgage. "It eliminates the requirement of monthly mortgage payments, offering borrowers potential cash returns or a line of credit based on their equity."

"The best part is you do not have to make any monthly payments, and you will never owe the lender more than the value of your home. You pay off the reverse mortgage on the home when you sell or through your estate when you pass," Rebecca Awram, a mortgage advisor, notes.

Explore how a reverse mortgage could benefit you during retirement.

When your home equity is greater than your loan balance

A qualified homeowner can use proceeds from a reverse mortgage for several reasons, such as:

• To receive supplemental income during retirement
• To access your home equity without the immediate need to sell your home
• To pay off debt, cover medical expenses, fund home renovations or meet other financial needs
• To create room in your budget for unexpected expenses and financial emergencies

You can even use a reverse mortgage to pay off your home loan. 

"When a borrower closes on their reverse mortgage, the first thing that happens is any existing mortgages are paid off," says Michelle White, a former loan officer and current national mortgage expert at The CE Shop. "The borrower can then access any remaining equity. The equity can be disbursed in a lump sum or regular monthly payments. The borrower may choose to establish a line of credit or choose a combination of any of these disbursement types based on their financial goals and needs."

When you don't have beneficiaries

A reverse mortgage may be a better option for seniors to tap into home equity for their financial needs if they don't have beneficiaries. In this case, they don't have to consider beneficiaries' interests or preserve the home's value for an inheritance.

"A senior without beneficiaries will not have to worry about planning who will pay off the reverse mortgage after they pass as if you inherit a property with a reverse mortgage, it is your responsibility to pay it back," Awram says.

When a reverse mortgage may not be a good idea

While these mortgages can benefit seniors in a variety of ways, it's critical to understand the downsides of reverse mortgages before proceeding with one. Everyone's financial situation is unique, after all, and a reverse mortgage may not be suitable for all situations.

For example, you might not want a reverse mortgage if you or your spouse is younger than age 62. All borrowers on a reverse mortgage must be at least 62 years old to qualify. If one borrower's age is below the threshold, they may have to be removed from the property deed so the older borrower can qualify for the reverse mortgage. However, this can be a risky move since mortgage disbursements will stop once the older borrower passes away, and they might lose the home if they can't pay off the loan.

And, a reverse mortgage may not be ideal if you can't keep up with ongoing homeownership costs. While you're not usually required to make monthly payments on your reverse mortgage, you do have to properly maintain your home and pay property taxes, homeowners association dues and other property-related expenses. Failing to do so or living away from the home for 12 months or longer could cause the lender to foreclose on your property.

The bottom line

Taking out a mortgage is a serious decision, so it's crucial to consider the benefits and downsides before getting a reverse mortgage. You might consider consulting your financial advisor or tax accountant to make sure a reverse mortgage aligns with your overall financial plan and goals.

However, a reverse mortgage may be a good option in certain situations because it allows you to access your home's equity as cash to reduce strain on your budget and achieve a more financially stable retirement. 

First published on April 16, 2024 / 9:47 AM EDT

© 2024 CBS Interactive Inc. All Rights Reserved

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Debt consolidation loans and your credit scores

ing Time: 5 minutes

Highlights:

1. Debt consolidation is a debt management strategy that combines your outstanding debt into a new loan with a single monthly payment.
2. There are several ways to consolidate debt. What works best for you will depend on your specific financial circumstances.
3. Weigh the pros and cons of debt consolidation and how it might affect your credit scores to decide whether it's the right path for you.

If you're struggling to pay off multiple debts simultaneously, you might consider debt consolidation. Consolidation can be an extremely useful repayment strategy — provided you understand the ins, the outs and how the process could impact your credit scores.

What is debt consolidation?

Debt consolidation is a debt management strategy that combines your outstanding debt into a new loan with just one monthly payment. You can consolidate multiple credit cards or a mix of credit cards and other loans such as a student loan or a mortgage. Consolidation does not automatically erase your debt, but it does provide some borrowers with the tools they need to pay back what they owe more effectively.

The goal of consolidation is twofold. First, consolidation condenses multiple monthly payments, often owed to different lenders, into a single payment. Second, it can make repayment less expensive. By combining multiple balances into a new loan with a lower interest rate, you can reduce cumulative interest, which is the sum of all interest payments made over the life of a loan.

Debt consolidation loans often feature lower minimum payments, saving you from the financial consequences of missed payments down the line. In short, you'll generally spend less on interest and pay off what you owe more quickly.

Types of debt consolidation

There are several ways to consolidate debt. What works best for you will depend on your specific financial circumstances. These include:

Debt consolidation loan. The most common of these are personal loans known simply as debt consolidation loans. Frequently used to consolidate credit card debt, they come with lower interest rates and better terms than most credit cards, making them an attractive option. Debt consolidation loans are unsecured, meaning the borrower doesn't have to put an asset on the line as collateral to back the loan. However, borrowers will only be offered the best interest rates and other favorable loan terms if they have good credit scores.

Home equity loan or home equity line of credit. For homeowners, it's also possible to consolidate debt by taking out a home equity loan or home equity line of credit (HELOC). However, these types of secured loans are much riskier to the borrower than a debt consolidation plan, since the borrower's home is used as collateral and failure to pay may result in foreclosure.

401 (k) loan. You can also borrow against your 401(k) retirement account to consolidate debts. Although 401 (k) loans don't require credit checks, dipping into your retirement savings is a dangerous prospect, and you stand to lose out on accumulating interest.

Consolidation can certainly be a tidy solution to repaying your debt, but there are a few things to know before you take the plunge.

Debt consolidation loans and your credit scores

Before you're approved for a debt consolidation loan, lenders will evaluate your credit reports and credit scores to help them determine whether to offer you a loan and at what terms.

High credit scores mean you'll be more likely to qualify for a loan with favorable terms for debt consolidation. Generally, borrowers with scores of 740 or higher will receive the best interest rates, followed by those in the 739 to 670 range.

If your credit score is lower than 670, debt consolidation may not be a good option for you. Consolidating debt when you have bad credit can be challenging. Although you may be approved for a loan, the interest rates offered to you will likely be high and may negate the savings you hoped to achieve by consolidating your debt.

It's also important to understand that debt consolidation involves taking out a new loan. As with any other type of loan, the application process and the loan itself can affect your credit scores. Weigh the pros and cons of debt consolidation and how it might affect your credit scores to decide whether it's the right path for you.

Pros

1. Credit Utilization. Your credit utilization ratio, the amount of revolving credit you're using divided by the total credit available to you, contributes to your credit scores. Lenders interpret high credit utilization ratios (usually above 30%) as an indicator of risk. So, if you have several credit cards open and each is carrying a large balance, your credit utilization ratio will be high, which typically translates to lower credit scores. However, credit cards and personal loans are considered two separate types of debt when assessing your credit mix, which accounts for 10% of your FICO credit score. So if you consolidate multiple credit card debts into one new personal loan, your credit utilization ratio and credit score could improve.
2. Payment History. If you have been struggling with high-interest debt, you already know that missed payments can quickly drag down your credit scores. Debt consolidation offers a solution: if you are able to obtain lower interest rates and lower payments, then it may be easier to meet your monthly obligation and avoid a negative hit to your credit scores.

Cons

1. Hard Inquiries. When you apply for loans, including those for debt consolidation, potential lenders review your credit reports, which generates what's known as a hard inquiry. Hard inquiries help lenders track how often you apply for new credit accounts. Each new inquiry may knock your credit scores down a few points, so you'll want to be sure that you only apply for loans for which you're likely to be approved.
2. Newer Accounts. The average age of your accounts has a big impact on your credit scores. Opening a new account will lower the average age of your accounts, and you might see a corresponding drop in your credit scores. Closing credit accounts that have been paid off will generally have the same effect.

Alternatives to debt consolidation

Consolidation isn't the only option for debtholders looking for relief. Consider these alternatives:

Debt management plans. Some non-profit credit counseling services offer debt management programs, where counselors work directly with the creditor to secure lower interest rates and monthly payments. This approach may help you avoid taking out a new loan, but there's a catch. You'll also lose the ability to open new credit accounts as long as the debt management plan is in place.

Credit card refinancing. Credit card refinancing involves transferring your debt onto a new balance transfer credit card with an interest rate as low as 0%. This introductory rate is only temporary, however, and these kinds of cards are difficult to get without good credit scores.

Bankruptcy. Filing for bankruptcy is a legal process for individuals and businesses that find themselves unable to pay their debts. During bankruptcy proceedings, a court examines the filer's financial situation, including their assets and liabilities. If the court finds that the filer has insufficient assets to cover what they owe, it may rule that the debts be discharged, meaning the borrower is no longer legally responsible to pay them back.

While bankruptcy can be a good choice in some extreme situations, it's not an easy way out. Bankruptcy proceedings will have a severe impact on your credit scores and can remain on your credit reports for up to 10 years after you file. Bankruptcy should generally only be considered as a last resort.

Juggling multiple debts can be overwhelming, but it's important not to let those bills pile up. With a few deep breaths and some careful consideration, finding a strategy for debt management that keeps your credit healthy is well within your reach.

Get your free credit score today!

We get it, credit scores are important. A monthly free credit score & Equifax credit report are available with Equifax Core Credit^TM. No credit card required.

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What do surging foreclosures mean for future HECM applicants?

Unemployment, foreclosures, and interest rates ultimately impact reverse mortgage lending. The point of today’s episode is not to dwell on the negative but to take an honest hard look at economic factors that can no longer be ignored amid a housing market and economy that frankly feel surreal. Presently, home prices remain frozen near their record highs despite mortgage rates doubling in two short years with a few notable exceptions. Also, the U.S. GPD continues to show robust economic output despite our national debt reaching unsustainable levels. What gives and what are the potential impacts on reverse mortgage lending?

A frozen housing market & foreclosures

First, let’s examine the housing market. Home sales have plummeted to record lows- what many refer to as a frozen housing market. The primary culprits are low inventory, high mortgage rates, and stubbornly high home prices that have pushed most would-be homebuyers to the sidelines. 

However, the housing market could thaw quickly should foreclosures continue to surge. Redfin reports foreclosures have steadily risen as interest rates increased. And a new report from ATTOM reveals an 8% increase in foreclosure filings. In addition, REO numbers in several states have reached levels seen since the Great Financial Crisis and Housing Crash of 2008. The annual increase in foreclosure filings in February jumped 51% in South Carolina, 50% in Missouri, 46% in Pennsylvania, and 7% in Texas. Despite this surge in foreclosures, 28 states saw a reduction in foreclosure activity. That would indicate the regional impact of employment or underemployment. 

With that in mind let’s look at the highest foreclosure rates for larger cities with a population over 200,000 residents. In February there were 1,367 foreclosure starts in New York City, 998 in Houston, 808 in Los Angeles, 792 in Chicago, and 777 in Miami. Keep in mind the long-term ripple effect that continues from the expiration of foreclosure moratoriums and evictions. 

The annual uptick in U.S. foreclosure activity hints at shifting dynamics within the housing market,” said Rob Barber, CEO at ATTOM, in a press release about the report. “These trends could signify evolving financial landscapes for homeowners, prompting adjustments in market strategies and lending practices”…which really doesn’t tell us anything. Underlying those shifting dynamics are the unemployment rate, interest rates, and economic conditions. More importantly, increased foreclosures whether locally or nationwide increase inventory and push down home values. This would impact potential reverse mortgage borrowers in affected areas. 

Unemployment and the national debt

Bloomberg Economics ran a million forecast simulations on the US debt outlook. 88% of them show borrowing on an unsustainable path.  Bloomberg reports the Congressional Budget Office’s latest projections show US federal government debt is on a path from 97% of GDP last year to 116% by 2034 — higher even than in World War II. 

This should come as no surprise with spendthrift lawmakers in both parties in Washington DC spending away the future of coming generations. The trick is we enjoy the benefits of deficit spending in the short term and Congress knows this as it keeps them in good standing with voters. However, as debt levels continue to rise creditors and those buying U.S. treasuries will begin demanding higher returns to offset the risk. Reduced demand for U.S. Treasuries would push interest rates up even further, slow the economy, and lessen the value of the dollar. All of these factors will contribute to further downward pressure on home values. Should the government continue to print money to mitigate the impacts of a burgeoning debt then inflation would accelerate once again.

The bottom line is home prices are likely to soften in several metropolitan areas across the country. A nationwide housing depression is highly unlikely barring any unforeseen black swan event. In the meantime, all we can do is be observant of national and local economic trends and continue to search for older homeowners who could use some financial relief that a reverse mortgage could provide. 

Call 786-262-6486 or email to rodkohly@gmail.com or fill out the for provided below for a free, no obligation Estimate of the Funds you might receive from a Reverse Mortgage.

Rent vs Buy - Fidelity
 Should I buy a home or keep renting?
The 5 key questions to ask yourself about this major decision.

Key takeaways

• Whether you buy or continue to rent can have important implications for both your finances and happiness.
• As you're weighing your decision, try comparing prices and rents in your area, and think about how long you'd likely stay in a home.

If you're running the numbers, make sure you consider the full costs of ownership, such as maintenance, taxes, and insurance.

Many renters dream about eventually owning their own home. There can be many perks to becoming a homeowner—from having more control over your space to building equity and potentially benefiting from rising home values. But it also might be one of the biggest financial commitments you'll ever make, and it's not the right move in every situation.

Read on for 5 key questions to consider as you're weighing this momentous decision of if you should rent or buy. (In addition to answering these questions, try Fidelity's rent vs. buy calculator for a look at how the numbers stack up in your particular situation.)

1. Are you truly in a financial position to buy?

Why it matters: If buying overstretches your finances, you might be less able to cope with a financial emergency or save for other important goals like retirement. Plus, an inadequate down payment or subpar credit score might leave you at a disadvantage if you're trying to get an offer accepted in today's competitive buying market.

What to consider: The relevant aspects of your finances include:

• Your income: If you don't have stable, sufficient income, it might not be the right time.
• Your down payment: Remember that you typically need a down payment of at least 20% to avoid paying for private mortgage insurance (which protects your lender if you're unable to make your mortgage payments).
• Your credit score: Without solid credit, you might not qualify for a favorable mortgage rate or even be approved for a loan in the first place.
• Your other debts: One guideline is that your total monthly debt payments shouldn't exceed 36% of your pretax income. If you have other debt, there may be less room in your finances for mortgage payments. (Learn more about figuring out how much house you can afford.)

2. Will you stay in your home for at least a few years?

Why it matters: When you buy, you'll face a boatload of one-time expenses, like broker fees, mortgage origination fees, and title insurance. The longer you stay put, the more time you have to spread out those costs and for your home to potentially rise in value.

What to consider: If you're planning to stay less than 3 years, it likely doesn't make financial sense to buy. (Staying less than 2 years can come with particular tax disadvantages, because you generally won't qualify for a capital gains tax exclusion. This means you'll owe capital gains tax on the full amount of any increase in your home's value.)

3. Does renting or buying offer better value in your area?

Why it matters: You might assume buying is a better value because it lets you build equity in a home. But that may not be the case if rents are low relative to purchase prices in your area.

What to consider: In any comparison, first make sure you're looking at similar properties in the same area (i.e., don't weigh renting your city studio against buying that country cottage). Then you can compare the renting and buying price tags with:

• The price-to-rent ratio: Take a monthly rent figure and multiply it by 12, so it's an annual number. Divide the purchase price of a similar property by that annual rent number. A ratio greater than 20 generally weighs in favor of renting, while a figure less than 20 generally favors buying.
• Fidelity's rent vs. buy calculator: Plug these rent and purchase figures, in addition to your down payment and income, into our handy calculator.

Running the numbers?

Some people decide with their guts. Others want a detailed analysis. If you're in the latter camp, here are some finer points to keep in mind as you're calculating your rent vs. buy comparison:

Factor in the full costs of ownership. In addition to mortgage payments, you'll face property taxes, insurance, routine maintenance, and occasional larger upgrades. (One guideline is to estimate maintenance costs at 0.5% of the home's value per year.)

Double-check on that mortgage interest deduction. It won't make sense for you to deduct interest unless all your itemized deductions are greater than the standard deduction (which in 2023 is $13,850 for individuals and $27,700 for married couples filing jointly).

Consider your next-best use for that money. Remember that a home isn't the only way to build equity. If renting is cheaper, you could invest the money you save by renting in a diversified portfolio to potentially build wealth over time.

4. Would you still want to buy if your home's value doesn't rise?

Why it matters: Although home prices have historically risen over long periods, there's no guarantee that they will in any given time frame or in any particular area. Plus, what matters for you will be the value of your specific property, which can be influenced by everything from the local economy to whether your neighbors take good care of their lawns.

What to consider: Think about how you'd feel if your home's value didn't budge over 10 years or didn't rise as much as inflation. If you buy, you'll need to accept the possibility that your home won't be a great investment.

5. What does your heart say about renting vs. buying?

Why it matters: Buying a home isn't just a financial transaction. It's also a source of added responsibility, and for many people, pride and satisfaction. You want to make a decision that you can feel good about years down the line.

What to consider: Ask yourself if you feel ready for the level of commitment that owning a home entails. If being on the hook when the basement floods or the roof leaks terrifies you, it could be you're not quite there yet. On the other hand, if you know you want to put down more permanent roots, then you might be ready to take the next step.

Ultimately, the numbers can help you decide, but they can't decide for you.

Looking to bring your homeownership dreams closer to reality? Consider setting up a savings goal to help you build your

down payment or learn more about the steps in the homebuying process.

Fed announces March rate decision

Find out whether the central bank chose to cut rates

By Fergal McAlinden

20 Mar 2024

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The Federal Reserve has held interest rates steady once more following its latest meeting, continuing with a patient approach amid growing speculation that rate cuts are on the way.

The central bank said on Wednesday afternoon that it was keeping its funds rate at its current level of 5.25% to 5.5%, meaning it remains at a 23-year high but has not changed for five consecutive announcements.

The decision comes just over a week after it was revealed that inflation increased to a pace of 3.2% in February, a development that seemed to nix any chance that the Fed would introduce a rate cut in today’s announcement.

In its accompanying statement, the Fed noted that inflation had eased over the past year, “but remains elevated” while economic activity has also expanded at a solid pace and job gains have continued strongly.

“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%,” it added.

Markets have pushed back their timeline for rates to start falling, with the fed funds futures market having anticipated a March cut at the beginning of the year but now expecting rate drops by June at the earliest.

Expectations have also risen that the Fed will introduce a milder series of cuts than first envisaged, with markets adjusting predictions from six or seven drops to three this year.

First American deputy chief economist Odeta Kushi indicated prior to the announcement that stickier-than-expected inflation had likely kept the Fed on a more cautious path than it might otherwise have taken.

“A lot has changed since the Fed’s last set of projections in December,” Kushi said. “Investors were bullish late last year on when and how much the Federal Reserve would cut rates in 2024.

Since then, however, there have been several data releases indicating that inflation is continuing to run hotter than many anticipated it would by this time of the year.”

The Fed is next scheduled to meet on interest rates between April 30 and May 1, with five further meetings to take place before the end of the year.

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Many baby boomers live in “time capsules” that need renovations to age in place. Home improvement services company Leaf Home and research company Morning Consult found more than half of surveyed baby boomers will stay in their homes as they age

January 23, 2024, 12:48 pm By Chris Clow

Fifty-five percent of surveyed baby boomers plan to remain in their existing homes as they age, but less than a quarter of those surveyed have any plans to renovate their homes to more safely and easily accommodate natural changes that come with aging.

This is according to a new report from home improvement services company Leaf Home and market research firm Morning Consult, which enlisted responses from 1,001 baby boomer homeowners (aged 59–77) and 1,001 millennials (aged 27–42) in late December 2023 and early January 2024.

The report describes homes owned by baby boomers as “time capsules,” since most of the surveyed boomer cohort (73%) said they have lived in their homes for 11 years or more. This is combined with the finding that “over half of their homes were built in 1980 or earlier with many never investing in renovations,” according to the results.

For millennials and younger generations who could eventually purchase these homes in the future, this creates a “looming underinvestment crisis that promises a future of deferred maintenance for their millennial inheritors,” the report said.

But for those who are aging in place in these homes today, there is also a notable deficit of renovations and added safety features, which could prove problematic for those who will naturally develop vision, mobility or cognitive impairments as time progresses, the report said.

Another recent report found that the current housing inventory is ill-equipped to facilitate aging in place safely for older Americans.

Just 24% of baby boomers are preparing their homes for aging, and even fewer are adding other safety features. Roughly 75% of baby boomer respondents report that they “have never added safety or accessibility features in their homes,” while 81% of the cohort report planning to leave an inheritance of some kind when they pass away.

Roughly half of millennial respondents (51%) expect to receive no inheritance.

“The housing market is caught in a generational tug-of-war. Boomers will soon face aging-in-place hurdles, while millennials will face the surprise of homes in need of major upgrades,” said Jon Bostock, CEO of Leaf Home, in a statement accompanying the report.

“With an aging and ignored inventory of homes available in the next decade, we may see a crisis that will overwhelm the home improvement industry and strain the budgets of inheriting millennials, impacting the housing market,” Bostock added.

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 What Happens AFTER the Last
Reverse Mortgage Borrower Passes Away?

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This question is paramount in the mind of many Homeowners that have or are planning to do a Reverse Mortgage on their homes, as well as with their heirs. NONE of the generalized information provided here is to be construed as legal advice, I AM NOT AN ATTORNEY.

For the purpose of this writing, I will refer ONLY to the US Congress created, HUD regulated, FHA Insured "Home Equity Conversion Mortgage" - H.E.C.M. Reverse Mortgage. It is the only one available today and the most numerous one. There were several "propietary" Reverse Mortgages which might have different set of terms and conditions. You should consult with a competent attorney to determine which type you have.

Let's get one thing clear, the HECM Reverse Mortgage was created to help the Senior Homeowner, nobody else. Period. The Borrower owns the property, but Lender has some rights given by the mortgage like in any other type of mortgage. Neither the Lender nor the Government own or want the property. Period.

As a Senior with a HECM Reverse Mortgage on my home, and a Reverse Mortgage Professional Loan Originator since 2005, I can vouch for the fact that it has helped many thousands of Seniors. For MANY, including me, it has been a blessing.

What happens when the LAST Borrower passes away: By the terms of most loans, whether traditional or HECM, at death the loan becomes immediately due and payable. The Borrower no longer exists. Lenders subscribe to services which notify them of the death of a Borrower. The Estate should notify Lender in writing as soon as possible.

Lenders will send a “harsh” letter notifying that the loan is “due and payable” immediately and giving the Estate 30 days to decide how they are going to pay the debt. The Estate must answer within those 30 days and notify their intentions. If no answer is given, Lender will initiate Foreclosure proceedings. Please do not delay in answering.

However, HUD Rules generally allow for a "reasonable" amount of time, not to exceed one (1) year (6 months and maybe UP TO 2  additional 3 months extensions if considered necessary) to pay the debt. In other words, heirs have UP TO a year to pay off the balance due as described above. Heirs must show they are doing "DUE DILLIGENCE" to pay-off the loan (refinancing, Listing for sale with a REALTOR, etc…). During that time, the estate should communicate and cooperate constantly with the Loan Servicer and seek their help and guidance. Most will try to help you if you do. 

If balance due is not paid within the time allowed (up to 1 year) the Lender will initiate Foreclosure action and the property could be lost. If the estate does not cooperate and communicate, Lender does not have to wait UP TO one year to initiate the foreclosure action.

Normally, any monthly advances that the LAST Borrower was receiving will stop or any unused Creditline funds will cease to be available. Consult with the Loan Servicer that sends the monthly Statements.

Please note that interest, Mortgage Insurance premiums, and service fees (if any) continue to accrue until the loan is paid in full. Property Taxes, insurance, and maintenance fees (if any) must be paid during this period and the property maintained in good condition to avoid causing initiation of foreclosure proceedings. The Estate might be able to use a Tax Deduction for interest charges paid when the loan is paid off completely.

Now, the HECM Reverse Mortgage is a Non-Recourse loan. In simple terms it means that the Lender (Mortgagee) CAN NOT collect one penny more than "the lesser of the balance due or the value of the home", either from the Borrower in life, or from the Estate. Not a penny more.

Let’s see some examples to make this clear.

Example 1): Property Sold or refinanced or loan paid off.
Home Value:         $300,000
Loan Balance due: $200,000
Remaining Equity: $100,000 This Equity belongs to Homeowner in life or to estate.

Example 2): Property "UNDERWATER"
Home Value:          $300,000
Loan Balance due:  $350,000
Shortfall:              ($  50,000) This amount can not be recovered from Borrower or from Estate.

The Homeowner paid a FHA required Mortgage Insurance Premium (MIP) at closing and monthly. The Mortgage Insurance compensates the Lender for this shortfall once the property is foreclosed and sold, sold in a Short Sale, or "given" to the Lender In a "deed-in-lieu-of-foreclosure" arrangement and sold. The Lender can not, repeat, CAN NOT, recover this amount from the Borrower or the heirs.

The amount owed, will depend on several factors:
(1) how many years ago the Reverse Mortgage was done.
(2) the amount of loan proceeds advanced to the Borrower.
(3) Plan chosen and Interest Rate of the loan.

The increase or decrease in value of the property does not affect the balance due. However, it does affects whether the balance due will be smaller or greater than the value of the home.

If the value of the Property is less than the balance due on the loan, the property might be sold in a "Arms Length Transaction" to a Non-Related buyer for the Lesser Of the Mortgage Balance or 95% of the Appraised Value. Heirs might be able to keep the property by paying the Lesser of the Mortgage Balance or 95% of the Appraised Value.

Spousal Rights (Non-Borrowing spouses): If a surviving non-borrowing spouse was removed from Title due to being younger than 62 years of age, or any other reason, at time of closing, there are very complicated rules, depending on the date of closing. Surviving Spouses and heirs should consult a competent attorney to interpret their Rights and options.

It is important to know whether the Loan closed before or  after August 4th, 2014 as on that date, Rules changed and, depending on the closing date, different Rules may apply to the Non-Borrowing Spouse.  As of May 6, 2021 HUD favorably changed the Rules. 
For an explanation, Click Here: Florida Reverse Mortgages Blog – Juan Luis Rodriguez-Kohly, Great Florida Lending, Inc – Blog, Blogging (happyseniorhomeowners.com)

To view the Official Document CLICK HERE  2021-11hsgml.pdf (hud.gov)

Non-Borrowing Occupant: Please be aware that any non-borrowing occupant MUST vacate the property opportunely. Tenants living the property might have certain rights and protections under State Law and may need to consult competent legal counsel.

I have tried to simplify the process to make it easier to understand. I sincerely hope that it is helpful. Again, this should not be construed to be legal advice, I am not an Attorney. If you have any questions, you should consult competent legal counsel. 

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Note: The information herein provided is for informational purposes only and It is subject to error and/or omissions and to change without prior notice.

Not Only Am I A Reverse Mortgage Specialist,
But I Am Also a Client!!!

The Danger of Mandatory Mortgage Payments in Retirement

by Shannon HicksDecember 18, 2023
 

While the media and regulators have scrutinized if reverse mortgages are suitable for older homeowners we see little if any interest in loan officers who promoted cash-out refinances or home equity lines of credit (HELOCs) to homeowners on a fixed income with little consideration of the increased financial burden of monthly payments or a payment shock when a HELOC resets.

A recent CBS News article advises before tapping into home equity seniors should consider these three questions: how much equity is available, how payment will be covered each month, and alternative sources of funds.

To the credit of CBS, their second question is one of the most consequential considerations that any older homeowner on a fixed income should weigh before incurring a potentially larger monthly mortgage payment. All of which brings to mind a recent webinar replay I watched.

Last week I watched a replay of KW Landmark Keller Williams Realty’s webinar ‘Ask the Pros: Is it true what they say about reverse mortgages?’. One comment during the session caught my attention. Bill Donofrio- a reverse mortgage consultant with Longbridge Financial was addressing the so-called ‘danger’ of reverse mortgages. He said, “So you talk about risk and danger. You know what’s dangerous? Having a mandatory mortgage payment. With a reverse mortgage you can make a payment whenever you want. It’s just not mandatory”.

Consider this. There’s a reason that homeowners plan and look forward to paying off their mortgage by the time they retire. It removes the burden of a monthly house payment and dramatically reduces their monthly obligations. But there’s another generally unspoken benefit: the homeowners eliminate the risk of foreclosure for nonpayment. A financial shock in retirement could impair a homeowner’s ability to stay current on their mortgage which could quickly trigger a foreclosure after three missed payments.

A 2018 survey by American Financing found 44 percent of Americans between the ages of 60 and 70 will have a mortgage when they retire and 17 percent of those surveyed don’t expect they’ll ever be able to pay it off. Thirty-two percent of homeowners predicted they would be paying their mortgage for at least another eight years. Only 20 percent of homeowners surveyed expected to pay off their mortgage within one year of retirement The Washington Post reported.

According to a 2017 Fannie Mae report, today’s older Baby Boomers born between 1946 and 1951 are more likely to carry mortgage debt into retirement than previous generations.

The calculus of retirement leaves little margin for error. Retirees with substantial monthly expenses including a sizable mortgage payment are often unable to absorb the cost of a financial shock such as unexpected medical expenses, long-term care, the loss of a deceased spouse’s income, or the resulting reduction in Social Security benefits. 

Even more, what’s disheartening is those retirees with no mortgage balance yet are unable to qualify for a home equity loan when funds are most needed for unexpected expenses. Yes, for most having a mandatory mortgage payment in retirement is a risky proposition. So also is the inability to access home equity when it may be needed most. 

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 Why a Reverse Mortgage? For a Senior Homeowner, with fixed income, a Reverse Mortgage could be a blessing. It has been for me, as well as for millions of Americans retirees. If you have a mortgage, it might eliminate the monthly payments, leaving that money in your pocket. I could give you Tax Free funds to enhance your retirement. Get the information from a Professional that has a Reverse Mortgage in his home

Call or email today or use the form provided below

Don't Be Fooled by "Cooling" Inflation

by Shannon HicksNovember 28, 2023

The pace of inflation has slowed but prices remain high

The next time someone tells you inflation’s coming down? Ask, from what?!

Sure, inflation has tapered since its 9.1% peak in June 2022, but Americans are still grappling with significantly higher prices of goods and services.

Even with modest pay hikes, workers are finding it tough to keep up with inflation’s pace. It’s no wonder—overall inflation stands 13% higher than in April 2021.

Retirees relying on fixed incomes are feeling the pinch, left with little choice but to cut back on essentials or seek extra income sources. Consider this: an average single retired worker getting $1,847 monthly will only see a $59 bump in 2024, not factoring in the $9.80 increase in Medicare Part B premiums according to the Social Security Administration.

This is prompting older homeowners to ponder how long their savings can weather inflation’s impact. Reverse mortgage professionals would be remiss not to address the real-life consequences of soaring prices with potential borrowers.

Eroding the value of the dollar

Recent reports, like Bloomberg’s, indicate it now takes $119.27 to buy what cost much less in early 2020—a 19% hike in daily expenses. CNBC’s analysis of Labor Statistics data from April echoes this trend, highlighting how everyday items are significantly pricier compared to just two years ago. It’s not just the year-over-year inflation pace; it’s the current cost that truly matters.

Despite expectations of some prices like homes and vehicles cooling off, most goods and services are unlikely to revert to pre-pandemic rates. In fact, most will become the new benchmark.

Though inflation’s pace has slowed, its impact on wallets remains substantial. Between April 2021 and 2023, overall prices soared by 13%.

The prices tell the story

The grocery store bill tells a compelling story—food costs have surged by 25% since January 2020.
Housing expenses have shot up due to surging home prices and mortgage rates. Average monthly mortgages have spiked by 40-60%, and rent for single or multi-family units surged by 28% since 2020, according to Zillow’s Rent Index.

Utilities, too, have become more expensive. Residential electricity bills in California surged by a staggering 51% from August 2019 to August 2023.

Stopping by your local fast food restaurant has become much more expensive—fast food prices have shot up significantly. Burgers cost 23% more, pizzas 17% more, and chicken dishes take 32% more from your wallet.

While many working Americans live paycheck to paycheck, seniors understand the value of saving. But inflation is chipping away at their nest eggs, a concerning trend as savings rates mirror the lows before the 2008 Financial Crisis.

Conclusion

In conclusion, discussing inflation is crucial for potential reverse mortgage borrowers. It’s the undeniable elephant in the room that demands attention.

For a No Cost or Obligation Quote on a Reverse Mortgage please call 786-262-6486 or email  rodkohly@gmail.com
or fill out and send the Forma provided below.

Homeowner’s Insurance Premiums are Surging in These Five States
 by Shannon Hicks      September 19, 2023

Excerpts from:

 American homeowners, especially older ones, are being crushed by record increases in homeowners insurance premiums.

Money.com reports these five states saw the largest increase in premiums from May 2021 to May 2023.

1. Florida: 68% ($1,127 to $1,896)
2. New Mexico: 47% ($855 to $1,255)
3. Colorado: 46% ($1,390 to $2,031)
4. Idaho: 46% ($552 to $804)
5. Texas: 46% ($1,471 to $2,141)

The spike in premiums is attributed to a perfect storm of a spike in natural disasters, record insurance losses, and higher construction prices.

Natural disasters such as hurricanes have long-lasting impacts. For example, in the wake of Florida’s most destructive hurricanes, insurers began hiking homeowners insurance premiums. The same can be said for Colorado, Idaho, and California. In the wake of the disastrous and deadly Maui Fire island residents will soon face the same challenge.

As a result of the surging cost of premiums, many older homeowners without a mortgage on their home have chosen to forego homeowners insurance altogether. The Insurance Information Institute reports that 5% more homeowners have not purchased homeowners insurance than just two years ago.

Many homeowners are very likely house-rich but cash-poor. Even worse, their greatest source of wealth is now at risk of being wiped out. One disaster could push an older homeowner into complete financial ruin or possible homelessness.

Have you seen an increase in homeowners insurance policy premiums? A reverse mortgage could provide the means needed to purchase a policy and protect what’s likely your largest asset.

The homeowner wins by protecting their home. but most importantly, helps eliminate the risk of a homeowner losing their home to a disaster or fire.

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 Inquire on how a Reverse Mortgage can help you cover your insurance costs, protect your home and give you financial peace of mind. It did to me and millions of other Seniors.

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Get a free, No Obligation Estimate of the Funds you could receive from a Reverse Mortgage. Call me today at 786-262-6486 or email me at rodkohly@gmail.com or
 Click on the link below

  Quick Reverse Mortgage Quote Form (seniorreverseflorida.com)

CALL ME TODAY  786-262-6486

The "Grey" Divorce Settlement and
The Reverse Mortgage

Sadly, today many Senior Homeowners are deciding to get divorced. it is a phenomenon called "Grey Divorce"

One of the biggest hurdles the couple faces is what to do with the home they have shared for so many years.

Continue Reading...

What is  Elder abuse?

How big is the problem?

Elder abuse is a serious problem in the United States. The available information is an underestimate of the problem because the number of nonfatal injuries is limited to older adults who are treated in emergency departments. The information doesn’t include those treated by other providers or those that do not need or do not seek treatment. Additionally, many cases are not reported because elders are afraid or unable to tell police, friends, or family about the violence. Victims have to decide whether to tell someone they are being hurt or continue being abused by someone they depend upon or care for deeply.

Elder abuse is common. Abuse, including neglect and exploitation, is experienced by about 1 in 10 people aged 60 and older who live at home. From 2002 to 2016, more than 643,000 older adults were treated in the emergency department for nonfatal assaults and over 19,000 homicides occurred.

Some groups have higher rates of abuse than others. Compared with women, men had higher rates of both nonfatal assaults and homicides. The rate for nonfatal assaults increased more than 75% among men (2002–2016) and more than 35% among women (2007–2016). The estimated homicide rate for men increased 7% from 2010 to 2016. Compared to non-Hispanic Whites, non-Hispanic Black or African American persons, non-Hispanic American Indian/Alaskan Natives, and Hispanic or Latino persons have higher homicide rates (2002–2016).

Overall and firearm-specific older adult homicide rates increased between 2014 and 2017. Of the 6188 victims, 62% were male. The perpetrator was an intimate partner in 39% of firearm homicides and 12% of non-firearm homicides. Common contexts of firearm homicides were familial/intimate partner problems, robbery/burglary, argument, and illness-related (e.g. the homicide was perpetrated to end the suffering of an ill victim, both victim and perpetrator had an illness, or the perpetrator had a mental illness).

What are the consequences?

Elder abuse can have several physical and emotional effects on an older adult. Victims are fearful and anxious. They may have problems with trust and be wary of others. Many victims suffer physical injuries. Some are minor, like cuts, scratches, bruises, and welts. Others are more serious and can cause lasting disabilities. These include head injuries, broken bones, constant physical pain, and soreness. Physical injuries can also lead to premature death and make existing health problems worse.

How can we prevent elder abuse?

There are a number of factors that may increase or decrease the risk of perpetrating and/or experiencing elder abuse. To prevent elder abuse, we must understand and address the factors that put people at risk for or protect them from violence.

1. Listen to older adults and their caregivers to understand their challenges and provide support.
2. Report abuse or suspected abuse to local adult protective services, long-term care ombudsman, or the police. Use the National Center on Elder Abuse Listing of State Elder Abuse Hotlinesexternal icon to find your state’s reporting numbers, government agencies, state laws, and other resources.
3. Educate oneself and others about how to recognize and report elder abuse.
4. Learn how the signs of elder abuse differ from the normal aging process.
5. Check-in on older adults who may have few friends and family members.
6. Provide over-burdened caregivers with support such as help from friends, family, or local relief care groups; adult day care programs; counseling; outlets intended to promote emotional well-being.
7. Encourage and assist persons (either caregivers or older adults) having problems with drug or alcohol abuse in getting help.

The older adult population is growing faster in the U.S. than are younger populations. Many older adults require care and are vulnerable to violence perpetrated by a caregiver or someone they trust. More research is needed to uncover the causes for, and solutions to, violence against older adults.

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Download 124 pages Booklet by the CDC   
https://www.cdc.gov/violenceprevention/pdf/EA_Book_Revised_2016.pdf

How to Report Elder Abuse,: 1-800-962-2873

How to Report Elder Abuse, Neglect, and Exploitation. To report by phone – call Florida Abuse Hotline at 1-800-96-ABUSE (1-800-962-2873). Press 2 to report suspected abuse, neglect or exploitation of a vulnerable adult. This toll free number is available 24/7.

Interested about your home's value?

AARP “Smart Driver” Course

Recently I took an AARP “Smart Driver” 6 hours Course which I consider must be a “Must Take” course for any Senior driver.

I urge any responsible Senior drivers to look into this course, not only for the valuable information about safe driving habits, Laws, dangers, etc…, but you also might get a sizable premium discount from your auto Insurance premium. I did.

These courses are offered in English ( Español en Dade County) throughout  every county in the State of Florida.

You get a 123 pages guide for future reference and home study.

Check at http://AARP.org  or toll free at 1-866-850-8317

You do not have to be a Member to Register.

12 Retirement Questions Financial Advisors Hear Most Often

By Rudri Bhatt Patel  Published Fri, Mar 3 2023

 Figuring out if your finances are on track for retirement can be tricky. If you have retirement questions, you’re probably not alone. We asked financial advisors what questions about retirement finances their clients ask the most, and here’s what they said.

You may find multiple answers to a question you’ve been wondering about here. But even if you do, it’s important to remember that every financial situation is different. Many people may have the same question, but the answer will differ for each. These answers can help put you on the right track, but make sure you consult with a financial advisor of your own before making any major financial decisions.

This article is intended for general informational and educational purposes only, and should not be construed as financial or tax advice. For more information about whether a reverse mortgage may be right for you, you should consult an independent financial advisor. For tax advice, please consult a tax professional.

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MY Notes:  A Reverse mortgage can be a blessing for may Retirees. I can vouch for that. It could help you achieve a financial worry-free retirement,

Call 786-262-6486 or email  RodKohly@gmail.com  today to get more Information about the funds you can get from a Reverse Mortgage

The FHA HECM Reverse Mortgage Fabulous  Growing CreditLine!!!

Many Seniors are not aware of one of the most attractive and valuable advantages of this Program and is insured for the life of the Loan. The Lender can NOT eliminate or change it!!!

Available only on the Adjustable Rate Plans. The Program allows you to withdraw up to 60% of the Loan amount at Closing, including closing Costs and any existing Mortgage or lien.

 The Balance of the Loan Amount is deposited in a   Growing CreditLine and will be available for withdrawal after one (1) Year. During the time the funds are in that Creditline, they are growing Tax Free at a Growth rate of .50% higher than the Interest rate charged for the funds owed that you withdrew at Closing.  (ie: if the Interest rate for the funds owed is 2.415% annual, for one period, the Growth Rate for the funds in the growing Creditline will be 2.951% for that same period). Tax Free!!!

Any funds available at Closing, not withdrawn will be deposited in the growing Creditline and will be available for withdrawal within the 1^st year. 

The funds deposited  in the growing Creditline are not owed nor is interest charged on them, until withdrawn. They are a Growing Tax Free Cash Reserve!!!

Another  fabulous advantage is that If at anytime you decide to make a payment (x$)  to lower the debt, the debt will be decreased by (x$) and, the same amount of (x$) will be credited to the growing Creditline and be available immediately for withdrawal if needed.

Don’t waste the opportunity to change your life with a Reverse Mortgage. We offer both FHA Insured as well as Proprietary Programs up to a maximum Loan amount of $4,000,000 for houses, townhouses and Condos! 

Note: The information is provided for informational purposes only. It is subject to errors and /or omissions and to change without prior notice.

 Fabulous  Growing CreditLine!!!

Everything You Need to Know About Inheriting a House

  By   Miranda Marquit

Published Mon, Aug 14 2023

Inheriting a house can offer a variety of choices in making use of a valuable asset. For example, you can sell the home and collect the resulting cash as a windfall, use the property for rental income, or live in the house and potentially reduce your overall living costs.

As you decide what to do with an inherited home, there are a few things to consider. Here’s what you need to know.

The Basics of Inheriting a House

Laws are different in each state, but, in general, if you inherit a home, you will need to go through some type of legal process. The executor of the will needs to be consulted, and there might be probate issues to resolve.

if you inherit a house, it won’t actually be yours until all the legal formalities are complete and your name is on the title. 

Some of the issues the executor and probate will address include:

• Co-inheritors. Co-inheritors can impact your options, including who gets to live in the home, whether to sell the home and split the proceeds, or whether one can buy the others out.
• Liens and other claims against the property. In some cases, there might be tax liens or other claims against the home. Those need to be satisfied before claiming true ownership of the home.
• Maintenance and repairs. The condition of the home and what that condition means for the home’s value.

Consider speaking with an estate planning specialist or other professional to help you navigate the situation and review your options. You may also need to consider a mediator if you have co-inheritors who disagree with you about the best way to handle the situation.

Things to Consider

Once you’ve established your right to the home and have your name on the title, you can start trying to figure out what to do next. You’ll need to consider the impact of owning this home on your personal finances. Considerations you’ll need to make include:

• Weighing costs. If the house has significant maintenance needs, do they outweigh the value of the property?
• Tax Implications. Depending on the size of the estate and where you live, you might be subject to an estate tax or inheritance tax. Additionally, if you inherit the home and keep it, you’ll be liable for any related property taxes. Finally, if you decide to sell, you might be subject to capital gains taxes. However, those are usually figured on a stepped-up basis, meaning you only pay capital gains taxes on the appreciation since the death of the owner.

Options for the Inherited House

Regarding what you’ll do with the property, you have three options:

• Live in the home. Use the home as your primary residence or vacation home. If there are still mortgage payments, you might need to assume them. Additionally, don’t forget to factor in maintenance, repairs, insurance, property taxes, and other potential ongoing costs.
• Rent the home out. Turn the home into a long-term rental or an Airbnb. Either way, if you rent out the home, you have the chance for ongoing income. Just be aware of what could happen later when you sell the property (including capital gains tax when you inherit a home and sell it later). Additionally, if you keep the home, even for income purposes, there might still be federal estate taxes and other costs to pay.
• Sell the home. Finally, if you simply want to liquidate the asset and receive the money, you can sell the home. You might need a real estate agent to help you, and there might be other costs. However, once you sell the home, you can use the proceeds to handle any taxes you might have.

If you have a family member as a co-inheritor, you might also need to make other decisions. Perhaps they want to move in, and you need to make an arrangement. The easiest solution is to sell the home and split the net proceeds (after taxes and other costs have been paid). However, if you want to keep the home and don’t want other co-inheritors involved, you might need to buy them out.

Bottom Line

Inheriting a house can be a way to improve your finances and make the most of your money. However, before you decide to accept the inheritance, or decide what to do with the house, make sure you consider your situation and needs to make a choice that makes sense for you financially.

This article is intended for general informational and educational purposes only, and should not be construed as financial or tax advice. For more information about whether a reverse mortgage may be right for you, you should consult an independent financial advisor. For tax advice, please consult a tax professional.

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Call 786-262-6486 or email  RodKohly@gmail.com  today to get more Information about the funds you can get from a Reverse Mortgage

What Will  the Future Bring?

Many Seniors, worried, have recognized the uncertainty that they face in their Golden years.

 1) Will my retirement income be enough to live the rest of my life with sufficient dignity?

 2) Where am I going to get enough income to maintain a satisfactory standard of living?

3) Will I be able to maintain my financial Independence for much more time?

4) Will I have to become a financial burden to my children?

5) Will my children be able to help me if I need it?

6) Will I have to sell my beloved home?

7) Where do I move to?  How much will it cost me?
 a) 6%  REALTOR Comissión: $_________
 b) Doc Stamps Tax For Sale of Property: $______
 c) Cost of Moving: $__________                                                                                                                                      

8) and, a thousand other questions…

 Watch a Short Presentation of what the Reverse Mortgage is: