If you’re house rich and income poor you may be considering a reverse mortgage. Just beware of the pitfalls. Nationwide many people have taken advantage of a technique that lets them pull equity out of their homes. It is called a reverse mortgage. Unlike a regular mortgage where you make monthly payments to a bank or mortgage company and each year more and more of those payments go towards reducing your loan principle and less and less goes to pay interest, a reverse mortgage pays you. With a reverse mortgage each monthly payment made to you is a loan. The interest on that loan compounds. Not only that, most of these loans are loaded with extra costs. Unfortunately there’s a lack of regulation in this relatively new industry. This makes it easy for lenders to take advantage of elderly homeowners. Usually the specifics of these reverse mortgages are in the fine print. It’s not uncommon to find loan origination fees of several thousand dollars, loan discount fees, a processing fee and mortgage insurance fees. These plus a shared equity can all become part of an expensive reverse mortgage package. Reverse mortgages attract older folks who find their Social Security checks no long provide them with enough income. They have made the common mistake of thinking financial security at retirement means a house that’s free and clear. A better choice, if they had had extra dollars when they were working, would have been to salt those extra dollars away into a side fund. That side fund would be there to supplement their retirement checks and they wouldn’t need to be considering reverse mortgages.
Tips for Designing a Home Office If you’re designing a home office you need to set reasonable spending targets for equipment. Technology theoretically is supposed to reduce the amount of time we need to spend in the office. What if we also have an office in our home? Not only are we working an 8 to 5 shift but with the right equipment we can keep on working after dinner or as I do, start our day at 5:30 A.M. To set up an efficient home office you’ll need to target your expenditures for furniture, computer, office equipment and software. If you’re meeting clients in...Read More
