If you're like most buyers, a home is the most expensive purchase you'll ever make, and you'll probably need some form of financing.
There are many lending institutions that offer a variety of mortgage products. Financing options and rates can vary widely, so it's important to do your research and shop around to ensure you get the mortgage that best meets your needs at the best price.
We can refer you to reliable mortgage contacts we have in Garrettsville, or help you in any other way to secure the best possible rate for your home purchase.
Use the mortgage calculators below for assistance in making decisions for financing your new home:
This calculator will help you determine how much money you qualify to borrow. The results are informal. You will be subject to a credit approval from your financial institution taking into consideration existing debt load, amount of down payment, income and other variables.
This calculator will help you determine what your mortgage payments will be, based on purchase price, interest rate and mortgage term, as well as other factors. The amortization table shows what the interest and principal payments will be over the term of the mortgage.
What About Reverse Mortgages?
If you are cash-poor but house-rich, you may want to consider a reverse mortgage.
First, what is a Reverse Mortgage?
A Home Equity Conversion Mortgage (HECM) is also known as a reverse mortgage. HECMs were created to help older Americans (aged 62+) to convert a portion of equity into tax-free money.
How does it work?
A reverse mortgage allows you to turn some of the equity in your home to cash. You continue to live in your home, retain ownership, and best of all -- you're not required to make any monthly mortgage payments during the loan period. You will only be responsible to pay for property taxes, home insurance and home maintenance (or you will risk defaulting on your loan).
With a HECM Reverse Mortgage, you can...
1) Pay off an existing mortgage and eliminate monthly mortgage payments.
2) Make retirement savings last longer.
3) Use a "standy" HECM reverse mortgage growing the line of credit to preserve investment accounts during market turndowns or build a safety net for unplanned emergencies, home repairs and healthcare expenses.
4) Supplement your retirement income with monthly payments.
5) Use a HECM for purchase loan to buy a home that better fits your needs.
6) Support aging-in-place expenses, like caregiving and home modifications.
Potential Benefits of a HECM Reverse Mortgage:
1) No monthly mortgage payments.
2) Tax-free proceeds.
3) Keep your home.
4) Federally-insured by the government.
5) Delay your Social Security benefits
1) The borrower on the title must be 62 years or older, although a non-borrowing spouse may be under age 61.
2) The home must be the borrower's primary residence.
3) The borrower must own the home.
How are the HECM proceeds paid out?
You have three options...
1) One lump sum payout
2) Monthly installments
3) HECM growing line of credit
You can even combine a HECM with the equity from the sale of your current home -- or other savings and assets -- to buy your next primary home in a single transaction. The benefit to you is that, for as long as you live in the home and whatever happens to the home's value, you only make one down payment toward the purchase.
1) No monthly mortgage payment
2) Increase you purchasing power
3) Contribute toward the down payment on the home purchase
4) Choose a lower-maintenance home
5) Choose a location closer to family and friends
6) Lower your cost of living during retirement
To learn more about HECM reverse Mortgages and their potential personal benefits, call Craig Johnson, your Reverse mortgage Specialist at Acceptance Capital Mortgage Corporation at 110 W. Streetsboro St. in Hudson. Telephone (234) 284-8228 or mobile phone (330) 217-5808.
Remember, a reverse mortgage is a loan that allows you to convert your home equity into cash. Based on the amount you borrow, youíll get a payment every month. You can also take the money as a lump sum or an equity line of credit. The proceeds of the loan are tax-free.
You donít have to repay the loan as long as you live in the house. Once you do leave it (when you pass away or move out to assisted living) the house gets sold and the proceeds go toward paying off the loan, as well as any interest or fees that have accrued. The longer you have the loan, the more you will owe. And depending on the type of loan, the rates may be variable.
If the house sells for more than the loan balance, you or your heirs get the difference. If the house sells for less, the bank takes the loss.
If money is tight, the payments from a reverse mortgage can give you a new stream of income. If you have a mortgage on your current home and itís hurting your cash flow, you can pay off your conventional loan with a reverse mortgage and eliminate that expense.
It could also be used to pay off high rate credit card debt, fund major home repairs, or cover big medical bills. See the AARP Reverse Mortgage Education Project for more information to help you decide if a reverse mortgage is right for you. If you proceed, the federal government requires that you to meet with a counselor before taking out the loan. Counselors are available at the Department of Housing and Urban Developmentís website.
Like any loan, a reverse mortgage comes with some risks. HECMs have a failure rate of about 10 percent, far beyond those of conventional mortgages, often because people assume they are a risk-free option. Be certain you understand the terms of your loan before signing on to a reverse mortgage.
"While some people are wary about reverse mortgages, this is a good and easy way for you to be able to stay in your home and draw a monthly payment from the equity in your home. In my experience, my client could take the equity in their mother's home and purchase another home -- all on one floor -- and keep their mom at home for another two or three years. They could rent out the mother's home or sell it and pay off the money they borrowed. It gives them options. And that is what it is all about."
~Dolores A. McCumbers, Broker/Owner of MB Realty