Oh, boomers hoping to retire to dream homes in Summit County Colorado: Buying Breckenridge real estate may be a tad easier for you now. The recent housing bill just cut fees on reverse mortgages, maybe enough to ride them as the tweensie railroad up the mountain to real estate Breckenridge, Keystone CO real estate, Silverthorne CO homes, or a Rocky Mountain fisherman’s life in Frisco or Dillon.
A reverse mortgage offers immediate money to homeowners 62 year old and over based on the equity built up on their homes. Payments are deferred until the owner dies or sells the home or permanently moves on. That means extra cash to pick up a parcel or fractional portion of Summit County real estate. Putting money into Breckenridge Colorado real estate, seniors will now that if circumstances warrant pulling out the equity, the reverse mortgage is a better tool today than it was 2 months ago.
The complicated Housing and Economic Recovery Act of 2008 includes a cap on the amount of origination fees that lenders can charge for reverse mortgages. The new cap goes like this. Pay only 2 percent on the first $200,000 of your home’s value and 1 percent on the remaining balance. There are limits to these loans, albeit that amount is not yet determined because of some ambiguity in the legislation.
Traditionally, reverse mortgage lenders heaped on hefty upfront fees. Some contracts were even flawed and contained huge appreciation shares for the lender. Even so, the use of reverse mortgages has been on the rise. The Home Equity Conversion Mortgages (HSCM) handles 85 percent of the reverse mortgage market. HECM says that in 2005, they handled 43,131 reverse mortgages and by 2007 the number had more than doubled to 107,367.
Why not? Owners who use this vehicle to pull equity out of their homes do not have to prove income or credit worthiness and do not have to move, give up title, or make monthly payments. If a retired homeowner sees that his or her social security, IRAs, pensions, investments, and savings are not providing sufficient income to cover their current needs, the reverse mortgage provides the plus factor. Monies can taken is a lump sum, fixed monthly payments, a line of credit, or a combination.
The money can be used however you’d like: for medical bills, to retire an old mortgage, or to invest in a fractional in our beautiful mountain resort to be visited by family and friends for years. Contact Jonna Beardsley at (970) 453-2200 at Breckenridge Associates for friendly and professional real-estate assistance in the area.
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