Home Equity Loan – A Reverse Mortgage Could Provide a Comfortable Retirement!Written by Charles Essmeier
While only comprising about 1% of all mortgages, reverse mortgage has gained in popularity in recent years. Federally insured since late 1980’s, reverse mortgage allows owners of paid-off homes of at least 62 years of age to borrow against equity in their homes in form of a lump sum, a line of credit, or in form of monthly payments. The loan is repaid when owners die or when home is sold or no longer occupied.
In early years of its existence, reverse mortgage was regarded as a “last resort” step to avoid foreclosure, pay medical expenses or keep home from disrepair. More recently, however, retirees have been finding creative ways to use equity in their homes to allow their retirement years to be more enjoyable.
The huge growth of housing market during last five years has left millions of homeowners with large amounts of equity in their homes. Californians who bought homes in early 1960’s at modest prices are now retiring; many of them have home equity in mid-six figures. With that sort of equity, homeowners are using their equity to buy recreational vehicles, boats, luxury vacations, and even second homes. The structure of a reverse mortgage makes it possible for some homeowners to pay cash for a vacation home, while continuing to live in their primary residence for as long as they
| | Credit Card Dirty TricksWritten by G Marwick
There are many of us that have been badly stung by credit card companies that have charged exorbitant fees to use their credit cards. Several years ago an APR of 25% to 29% was common place which in simple terms means that if you borrow £1,000 your interest on that money would be £250 to £290 a year. Criminal when you think of it but I suppose we have to consider interest rates were much higher 8 to 10 years ago and there were fewer credit card companies on market.Today low interest rates that we are experiencing have spurned hundreds of loan and credit card companies cashing in on cheap cost of borrowing. To get approved for a loan or a credit card nowadays has never been easier. With advent of internet you can get approved for a loan or credit card in 10 minutes. So we all have a few 0%, low interest rate credit cards in our bags and wallets but lets find out a bit more about sting in tail of these cards. 1.Monthly Repayments: Well done if you pay your bill off each month in full. Like most of us we only pay off minimum monthly repayment; this is usually a % of outstanding balance or no less that £5. Some credit cards will set minimum repayment on a card at such a low amount that you inevitably end up paying interest and nothing else. When this happens you end up with a compound interest scenario. Beware you could end up paying off a £2,000 loan for next 20 years. 2.Credit Card repayment protection (CCRP): Credit Card companies make a fair amount of money out of you when you use their cards. But wait they want to make some more. Just in case you die or lose your job they will offer you Credit Card protection for a monthly fee. These are usually over priced. Most credit card companies make a fortune out of these policies as most people don’t understand how these fees are calculated so don’t know there true worth. What most people are buying is piece of mind. 3.Penalty fees: If you do not pay on time you will be charged a late payment fine. These vary depending on your credit card company. The best way to prevent this happening is to set up a direct debit. You get charged for exceeding your credit limit. Again this is a very sneaky way for credit card companies to make money off of us. Most of us will slip up without even knowing it and a charge of £25 can quite easily go unnoticed on our statements. Be diligent and don’t give card companies any excuse to make these charges.
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