Living and investing in Florida.

Tuesday, February 17, 2015

LAND CONTRACT

What is a Land Contract?

Posted by :Adam Lesner On :February 17, 2015

Category:Land Contract, portfolio loan, real estate

A land contract is a popular way to purchase or sell a home without having to deal with banks or lenders. This is an attractive route to take if the property that is being sold is unique, or if the buyer of the home cannot get approved for a mortgage for one reason or another.

When selling a home on land contract the seller acts as the private lender. The buyer provides down payment and makes monthly installment payments to the seller for an agreed upon period of time at an agreed upon interest rate. Usually land contracts are done on a 3 – 5 year balloon. Meaning the borrower makes mortgage payments on a 15 – 30 year loan structure, but in 3 – 5 years the existing balance needs to be paid in full (home is sold or refinanced with a bank at that time).

It’s a good idea to have the land contract recorded with the county in order to have a paper trail and make it official. Many times the seller won’t be willing to sign over the deed until the land contract is fully exercised. This means that the buyer doesn’t technically take full ownership of the property until all payments are made on the land contract.

Advantages of Selling on Land Contract

Imagine you’re trying to sell your home. You have several offers, and one is finally accepted. The inspection is done and shows that there are some significant issues with the property. It’s agreed that the degree of the issues are so serious that a lender would never approve the loan because the appraiser would certainly have a laundry list of expensive items to be repaired before closing.

The good news is that they buyer is an experienced builder and could do most of the repairs himself.
This is the perfect opportunity for a land contract option to be explored! The seller still gets to sell his home, and the buyer still gets to buy.

In addition to being able to accept a large down payment up front (usually 20% – 30%, selling on land contract also provides an opportunity for the seller to receive a steady flow of income. This would be for the duration of the land contract, and earning interest all the while.

Advantages of Buying a Home on Land Contract

With lending guidelines being pretty strict, it can be tough to get a mortgage if you have had credit issues recently, or have a unique income situation. A land contract may be your only option if you’re looking to buy in some cases.

This is great because it still gives you theopportunity to own your home! You can do upgrades, have pets, and live the
American dream. It’s your house. Just make sure the county knows that. Get the land contract recorded when you buy.

The other advantage is that you get anopportunity to re-establish your credit. Making your land contract payments on time month after month will set you up for success when it’s time to refinance out of your land contract. Since the land contract holder will not be reporting your monthly payments to the credit bureaus (like a normal mortgage) you want to keep strict records of your payments. When it’s time to refinance the new lender will want to see a history of those payments to ensure you were on time, and consistent. If there were any late or missed payments your approval on your new loan is likely to be impacted.

Lastly, a land contract is great if you are a newbusiness owner. Many times lenders will want to see 2 year’s tax returns before lending to self-employed borrowers. See here for an exception to that.

Refinancing out of Land Contract

As mentioned above most land contracts are done on a short-term, with the full balance being due at the end of the term. While you’re in the home you want to do everything you can to prepare for that. Think about the reason you bought on land contract… work on that.

Whether there were credit issues, income issues, or property issues. Get squared away. The last thing you want to do it spend 5 years making payments on a land contract and find out that you can’t refinance because of how you filed your tax returns. Or maybe the property still needed a new roof and now the appraiser still won’t approve it on your new loan.

You don’t want to be in a position where you can’t pay the remaining balance on the land contract. The land contract holder is likely to take the property back if the terms of the contract allow. There may be negotiating room in the balloon depending on the individual. But do yourself a favor, and don’t make it come down to that. Get your ducks in a row, and be ready to refinance out of the land contract when it’s time.

Rates on land contracts tend to be a bit higher than what you’d typically see on a mortgage. If the land contract allows you to refinance before the balloon without pre-payment penalty, take advantage of that. As soon as you’re in the right financial position do what’s best for you. There is no need to stay in financing terms that are not appropriate for your situation.

An Alternative to Land Contract

So often people think that if there is a unique borrower scenario, or a unique property scenario, a land contract is their only option. That’s true in some cases, but NOT all cases. If the situation is unique, a portfolio loan with a local lender or credit union may be your saving grace. These loans are funded with your local credit union or small bank, and is not sold on the
secondary market.

It stays in-house. So the lender is able to take more of a common sense approach than any other loan available.

Portfolio loans are designed to serve clients who fell on hard times, but are now back on their feet. Portfolio loans are also a great option for unique properties like non-warrantable condos, or homes zoned in commercial areas.

What unique scenario have you seen where a land contract was the perfect solution?

Adam Lesner | Mortgage Loan Officer | NMLS 198818 | Michigan First Mortgage | NMLS 130329

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Adam Lesner

Adam Lesner is a Mortgage Loan officer in Brighton, MI. After receiving an honorable discharge from the U.S. Marine Corps in 2008 Adam began his career in the mortgage business. Father of 2 beautiful girls, husband to his amazing wife of 10 years.

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Adam Lesner is a licensed mortgage Loan Officer with Michigan First Mortgage in Brighton, Michigan.
NMLS 198818

Call or text Adam directly at 248-894-2763

Michigan First Mortgage
NMLS 130329

1231 S Old US 23, Brighton, MI 48114

Specialties include: Portfolio lending, Conventional, FHA, VA, USDA - RD, and Non-Conforming mortgage lending.

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Sunday, February 15, 2015

TRAINING AGENTS ON NEW CONSTRUCTION

Training Agents on New Construction

Provide value to consumers who want to buy brand new by educating your salespeople.

FEBRUARY 2015 | BY SAMMER MUDAWAR

There seems to be preconceived notions that real estate agents provide little or no value when consumers are purchasing brand-new homes; that there is no reason for a salesperson to be involved because they don’t do any work; that they simply walk into the builder’s office, sign a piece of paper, and hope the client falls in love with the model home. Well, nothing could be further from the truth.

Purchasing a new home directly from a builder without representation from a knowledgeable and experienced real estate professional is very dangerous for buyers. If your salespeople are experienced in helping clients purchase brand-new homes, they can provide a lot of value by helping consumers avoid mistakes and save significant amounts of money. They can offer buyers insights with comparables in the market, including what others have paid for homes in the same development. Buyer’s agents who are experienced in new-home construction will have information about the builder’s history. They will also be able to walk buyers through the details of the contract.

REALTORS® have a fiduciary duty to their clients. They must abide by the Code of Ethics and a strict code of conduct. Violating these codes can result in fines and suspension of license. Help your agents explain the advantages to buyers of having a REALTOR® throughout the home buying process.

Train and educate your salespeople on how to advise clients on new-home construction. Help them learn how to read blueprints and understand site design and the materials and methods of construction. Buyer’s agents can take the Certified New Home Specialist educational courses through the Council of Residential Specialists; brokers should consider taking these courses as well. This will provide a solid foundation on new-home sales. But nothing beats training or shadowing brokers or sales agents who have firsthand experience working with builders in your local market.

Here are three common misconceptions about working with builders and ways real estate practitioners can help buyers. Pass these on to your salespeople:

Builders don’t negotiate – FALSE. However, it is important to know when to negotiate, what points are negotiable, and how to do it effectively. As with many things in life, timing is key. Knowing when to pull the trigger on a new home and when to hold off can make or cost clients money. For example, it is common for builders to increase pricing between phase releases (even on homes from a previous phase that have not been purchased), so reserving a property the day before the next phase release and price increase can mean instant equity.Buyer’s agents can’t be involved throughout the process – FALSE. Although most builders will not allow real estate practitioners to be involved during certain inspections and walk-throughs, there are plenty of points for involvement that can protect the consumer. Construction is organized chaos. With so many moving parts happening at the same time, it is easy for details to be overlooked and forgotten. For example, agents can help buyers keep a list of all their upgrades and custom features (including written documentation of all verbal instructions between the buyer and builder). During periodic construction walk-throughs, and especially the final walk-through, the buyer should have these lists handy to ensure everything was incorporated per their specifications. It is not hard for a construction crew to overlook installing a few additional electrical outlets. If the client has the proper documentation, the builder will not have an issue correcting the situation.What you see is what you get – FALSE. There are always additional costs. Total acquisition cost is important to understand. Buyer’s agents can identify and thoroughly outline all the costs involved for their buyers to help them avoid surprises.

Build value within your office by training agents so they can show value to the client. Only then will the consumer understand why they don’t want to walk into that development’s sales office without their

Choose Me! How to Get Online Prospects to Love You

Choose Me! How to Get Online Prospects to Love You

Prospecting in the Internet age requires you to find new ways to appeal to consumers who are inundated with names and faces of other practitioners. Here's how to set yourself apart.

JULY 2008 | BY KELLE SPARTA

When I write about how to succeed in this relationship-driven business, I often compare prospecting to dating. After all, courting a customer is similar in many ways to courting a man or woman who may eventually become your partner for life.

So, when strategizing the best ways to get online customers to become your clients, I can’t help but draw parallels to the world of online dating. In both scenarios, you must make yourself memorable in a sea of potential suitors, and then grow a relationship on the Web before eventually meeting in person.

Here are some helpful tips I’ve gleaned from online dating that also apply well to real estate:

Show them you’re special.

Don’t be common, or you'll simply be overlooked. Online customers are presented with a deluge of Web advertisements of other practitioners. They must narrow down their possibilities before they can zero in on the one they want to pursue. If your ads look like everyone else’s ads, how will prospects remember you? Advertise your niche, which will help you stand out, and provide useful information on your Web site so prospects will visit again and again throughout their home search.

Respond quickly to e-mails.

If you’ve received an e-mail from a prospect, time is of the essence. You must respond quickly and in a professional manner. Remember, the prospect has probably sent e-mails to several other agents, too. The kiss of death is a slow response time; it shows you’re just not that interested, and the prospect will move on to another practitioner.

Be persistent.

Your potential clients are probably contacting lots of other practitioners about the listings they've seen online, and they may be overwhelmed with response e-mails. They will most likely go through stages where they contact a lot of people and then when they take a break. If you are persistent in your polite and helpful follow-ups (many practitioners use a drip-marketing campaign for this), you can gain a lot of ground during these fallow periods. It’s often not how great you are but how persistent you are that gets the girl – uh, client. Persistence proves you’re interested, and everyone wants to be wanted.

And endearing.

Now that you’re in communication with potential clients, you need to also be engaging and (dare I say it?) fun. Let your personality shine through your e-mail communications. Give them a chance to get to know you better. Offer up white papers to educate them, MP3 recordings on the real estate market or videos of you explaining how the process works and giving them “insider secrets” on how to get the most out of their transaction. The more chances they have to interact with you – even virtually through the web, the closer and more in relationship they feel with you.

Pace yourself.

Online customers don’t want to divulge too much about themselves at first. Respect this. Don’t require that they give you their phone number or sign an agreement with you before you supply them with some information to help in their home search. Let them take time to get to know you before you take it to the next level.

But keep moving forward.

But there is a balance to that patience. There is a point at which, if you don’t meet, you never will. Be sure conversation continues to move forward in some way, that each communication brings you a step closer to talking on the phone or meeting. Ideally, you’re looking for somewhere between three to seven e-mails before a call or appointment is garnered – depending on the depth of the detail in the e-mails. If there’s really no “chemistry” between you and the prospect, and you get the feeling that he or she isn’t really interested in continuing the relationship, don’t be afraid to move on.

Don’t forget, there’s still a place for old-fashioned courtship.

The Web fosters a quick exchange of information, and can be invaluable for consumers and real estate practitioners alike. However, just as in online dating, there’s still a need to meet face-to-face if you’re going to take the relationship to the next level. Granted, online customers have to get to know you and become comfortable with you before they’re willing to give up their anonymity, much less meet for an appointment. In other words, give them a chance to hold your hand before you ask them to marry you

To all Real Estate Professionals in other States and Countries whose clients are interested on investing in Florida

The Power of Words PROPERTY DESCRIPTIONS

The Power of Words PROPERTY DESCRIPTIONS

Get inspired to write better listing copy.

JANUARY 2015 | BY MELISSA DITTMANN TRACEY

Here are samples of narratives from professional real estate copywriter Valerie Haboush and Melynda Capps, a sales associate with Werner Properties in Stockton, Calif. They are used to advertising listings in marketing materials online or in print.

Delray Beach, Fla. home (By Valerie Haboush)

Inspired by the glorious chateaus of France, Chateau Ami is a sophisticated and luxurious retreat that reflects that magical merging of inspiration and architecture. Created by renowned architect Randall Stofft and Cudmore Builders, the estate is a masterpiece of design and craftsmanship featuring inlayed onyx, hand-planed hickory wood flooring, intricately hand-painted ceilings, hand-carved fireplace by Barbara Tattersfield, exquisite crystal chandeliers, plus an elevator to transport from floor to floor.

What People Notice Most About Your Listings

Click on the images below for larger versions of these infographics about listing content.

Sprawling entertaining spaces flow outside to the outdoor living room past the tennis courts and guest house, to the stunning infinity pool and tranquil lake beyond. On 2.5 acres of premier lakefront acreage, this French Chateau is the crème de la crème in prestigious Stone Creek Ranch.

Property in Mooresville, N.C. (By Valerie Haboush)

Paradise at The Point! This luxurious 4 bedroom 4.5 bath Dienst-built estate on the Lake Norman peninsula is a dream home in a high-end community that's home to Trump National Golf Club. Spanning over 4900 SF, this magnificent waterfront residence graced by soaring ceilings and wall-to-wall windows is a haven for gazing at Lake Norman views from multiple vantage points. The grand entryway with a sweeping staircase draws you into a voluminous layout made for entertaining. The 2-story great room with French doors to the rear deck is the dramatic focal point of the main level, accompanied by an elegant formal dining room, tremendous chef's kitchen, den/family room with a marble fireplace and glass doors to the backyard, and home office with gorgeous built-ins. The divine master suite presents tray ceilings, massive windows, a terrace overlooking the water, and an opulent ensuite bath will a soaking tub and separate glass shower. The lower level houses a large rec room with wood floors and a wet bar, billiards room, and 2nd living quarters with a full kitchen. Laundry is conveniently located on the main and lower levels. Park your boat at the common boat slip (one of only 3) accessed via boardwalk behind the house.

Property in New York’s Tribeca neighborhood (By Valerie Haboush)

Masterful design and modern luxury are uniquely embodied in this 4 bedroom 4.5 bath Duplex Penthouse with a 4500 SF wraparound terrace atop Sky Lofts Condominium. This one-of-a-kind glass house, created by New York architect James Carpenter who designed 7 World Trade Center, is sheathed in high-performance, museum-quality insulated glass atop an historic Art Deco loft building in the heart of Tribeca. The sun and temperature-controlled glass envelope of its 7500 SF interior was tastefully designed with the top art collector in mind. Unobstructed 360 views from this penthouse are truly unparalleled, and include vistas of the Freedom Tower, Empire State Building and Hudson River.

Every detail was carefully selected and quality crafted. Highlights include Lutron light and shade systems, heated bathroom floors, concrete first-level and hallway floors, teak wood bedroom flooring, troweled plaster walls and ceilings, artwork display lighting, hidden mechanicals, a climate-control system, high-tech security system, and spacious corner rooms that overlook the city.

Entertain in grand style in the 42' x 21' living room graced by 22' ceilings, a wood-burning fireplace (1 of 3 in the home) surrounded by a floor-to-ceiling plain-sawn cherry wood hearth, and a perfect Freedom Tower view. The top-of-the-line chef's kitchen is clad with premium finishes and fixtures including custom white lacquer cabinets, bluestone counters and professional-grade appliances. Sliding glass doors in the dining area showcase views while opening up the home to even more light and air. Spill out to the awe-inspiring terrace which can be accessed from any room, where a fully-equipped outdoor stainless steel kitchen, sun deck, hot tub and private outdoor shower await.

Two dramatic stairways lead to the private bedroom suites, all boasting sleek en-suite baths, generous closets and wonderful views. The master bedroom is the ultimate retreat facing the Hudson River, complete with a spa-like onyx bath with a steam shower, Jacuzzi and sauna.

Built in 1929 as a printing factory, 145 Hudson is full-service and pet-friendly in the heart of fashionable Tribeca. A deeded private parking is included with the sale of the penthouse.

Property in Washington, D.C. (By Valerie Haboush)

This immaculate, professionally-designed 2-story condo with a private deck and patio invites comfort, and exudes modern elegance. With 2 bedrooms, 2 and a half baths, generous living space and stylish finishes, you'll enjoy a perfect setting for relaxing and entertaining.

Beautiful mahogany hardwood floors and plenty of natural night flow throughout the home's open, airy layout. Other special highlights include a charming gas fireplace, rich exposed brick, chic recessed lighting and ceiling fans, a Kenmore Elite washer/dryer, marble baths, tons of storage space, and ready-for-cable wiring in all rooms.

Enjoy gatherings in the generously-sized living/dining area graced by a fireplace, wine cooler, huge windows and glass sliding doors that lead out to the rear deck. The recently-renovated gourmet kitchen will inspire your inner chef with its granite counters, marble center island with seating, large pantry, Kitchen Aid, GE Profile and Bosch stainless steel appliances.

The first-floor guest suite offers an ensuite tile bath with a tub and shower. The upstairs master bedroom has its own private bath plus a huge walk-in closet with sliding doors, with a shelving system and drawers. You'll also love the convenience of your own off-street parking spot, and a great neighborhood near it all with the Metro, great shops, bars and restaurants minutes away.

Property in Stockton, Calif. (By Melynda Capps)

Living is easy in this impressive, generously spacious residence with Delta views and access.

The open floor plan encompasses four spacious bedrooms with plenty of room for study, sleep and storage, four and a half luxurious bathrooms, and a sleek and stylish gourmet kitchen that flows through to the dining room. The expansive living room opens up to a spacious rear patio with pool and spa and private boat dock on San Joaquin Delta. The master bedroom, complete with walk-in closet and ensuite, ensures parents have a private space where they can enjoy the Delta views on their private balcony.

Perfect for anyone, this home is ideally positioned to enjoy summers on the Delta. Truly resort style living in Brookside Country Club Estates

Monday, January 26, 2015

Housing demands rising.supplies is the issue

Housing demands rising. Supply is the issue

DAILY REAL ESTATE NEWS | MONDAY, JANUARY 26, 2015

Several signs in the housing market point to higher demand for real estate, but the big question remains whether the supply will be able to meet the rise in demand, writes Jonathan Smoke, chief economist at realtor.com®, in new commentary at realtor.com®.

Latest Housing Reports

Existing-Home Sales Rebound: 5 Stats to Know

Housing Starts Reach 6-Year Highs

Mortgage Rates Fall Even Lower This Week

Homebuilders Remain Cautiously Confident

“Supply is quickly becoming the biggest concern for healthy growth in home sales in 2015,” Smoke notes.

Smoke points to the following three positive signs showing higher demand in the housing market:

Builders are more confident: Builders are remaining upbeat about the new-home market. The National Association of Home Builder’s Housing Market Index recently showed builder sentiment on the rise, with builders optimistic about the six-month outlook in the new-home market. New construction is starting to follow suit. Housing starts rose 4.4 percent in December, with that rise driven by an uptick in single-family construction. Single-family starts are at the highest number in six years, reaching a pace of 728,000 units in December. “That is a good early sign that homebuilders are gearing production for greater demand in the spring,” Smoke notes.

Low mortgage rates: Mortgage rates continue to hit new yearly lows, bringing borrowing costs down for home buyers and refinancers. As such, mortgage application activity rose to its highest level since June 2013 recently. The 30-year fixed-rate mortgage averaged 3.63 percent last week, it’s lowest weekly average since May 2013, according to Freddie Mac. But economists are warning that the low rates won’t likely stick around much longer and could move up to 5 percent by the end of the year.

Existing-home sales rebounding: Demand has been growing in the existing-home sales market too. The annual pace of existing-home sales was 5.04 million in December, 3.5 percent higher than last year, according to the National Association of REALTORS® latest report.

Housing supply remains the biggest issue, Smoke says. The inventory of existing-homes is at a 4.4-month supply at the current sales pace – well-below the 6-month supply that most economists consider healthy, according to NAR’s December report.

“We need more markets to see listing growth over the next several weeks to keep appreciation at healthy, normal levels,” Smoke says. “With three years of positive price appreciation behind them, existing-home owners in most areas should see conditions as very favorable for trading up. That is what the market needs to set the stage for significant growth this spring.”

Source: “Demand for Housing Is Up, But How About Supply?” realtor.com® (Jan

1888 Reverse Mortgage

The 5 Best Reasons to Get a Reverse Mortgage Right Now

Buck Wargo

Posted: 01/22/15 05:43 PM ET Updated: 01/23/15 03:59 PM ET

I love lists -- doesn't everybody? Well, here are the five best reasons to get a reverse mortgage right now.

And, yes, we're all worried about our retirement. Some of us have taken steps for years to prepare ourselves by setting aside money in our 401(k) and other investments. Some of us are still behind where we want to be and are anxious about what it means for our security and lifestyle once we quit working. Many will keep working to make up for their lack of retirement savings and opt to wait and take their Social Security benefits and let them grow. But many of us have an ace in the hole to turn to help fill in the gaps of our retirement and help us envision the dreams that we have once we stop working: A reverse mortgage. With a reverse mortgage, homeowners 62 and older receive a loan backed by the equity in their homes. The lender isn't repaid until the person is no longer living in the home or dies.

Homeowners can get a lump sum in the beginning and draw out more later. They can also have a line of credit from which to draw as needed. The reason to pursue a reverse mortgage is for the home's equity, since there's no longer any more asset-based lending ever since the mortgage crash and change in rules. Home equity loans are a product of the past. Today, they're income-based loans and as our income goes down, it becomes tougher to qualify for loans. You don't have the ability to access all that equity you have saved over the years, which was the whole point of buying the house -- that ability to access the equity in an emergency in your retirement. Those days are essentially over. Before turning 62, there's no longer the easy ability to draw from the equity in your house other than selling it. That's why reverse mortgages are becoming more critical in retirement planning because it allows you to maintain your home and lifestyle, and make money from it. There are plenty of reasons to secure a reverse mortgage. People can use them to buy a second home. Some may choose to retire early. Others may want to start a business. They give some people a chance to travel or do their bucket lists before they get too old. For many others, it's the money in the bank/peace of mind option that's attractive to them. Below are the five definitive reasons to get a reverse mortgage right now.

1. Second Home

Many are taking the equity from a reverse mortgage to buy a second home, either one they vacation in or rent out and bring in $2,000 to $3,000 a month that they add to their retirement income. In one example, a couple with no retirement savings and no income stream selling their home for about $600,000, took half that amount and invested it and other half to buy a four plex. They would use a reverse mortgage to pay for the remainder of the four plex. They had funds to fix up one of the units for themselves as part of a strategy to downsize. Their other three units were rented out to generate income that would supplement their Social Security benefits. That's an example of a couple completely changing their life by using a reverse mortgage. It doesn't have to be used for downsizing.

It could be that home next to the golf course or that condo in Hawaii that can be also used for rental income. If you live in New York City, doesn't the sound of a place in Florida to escape the harsh winter sound appealing? When you can use cash from the proceeds of the reverse mortgage to pay for the second home, you don't have to worry about mortgage payments any longer and if you want, you can draw income from it when you're not in Florida. That property will even appreciate and give you more to benefit from in the future. It doesn't even have to be a second home or a condo. Some may choose to spend it on a boat or whatever else their retirement dream is. Simply, a reverse mortgage is a vehicle to help you realize your dreams if you haven't properly planned for it.

2. Retire Early

When we turn 62 and have a several thousand dollar a month mortgage payment, we can opt for a reverse mortgage and take that mortgage payment we've been making and put into a retirement account and take proceeds from the reverse mortgage to pay the bills. That allows the 401(k) and other investments to keep growing for several years. You're better off leveraging the equity in your home and keeping the retirement savings in place because that's earning more money. Many older Americans have $100,000 and $125,000 in retirement income and that's not enough to live in once they stop working. Eliminating your mortgage payment at 62 -- even if you owed another 10 to 15 years on your home -- is going to jumpstart any additional retirement savings. If you work until you're 70 (as many people are choosing to do these days), that results in the best of both worlds. You get to keep your house, eliminate your mortgage payment and take that money to build your retirement savings that can last 10 to 20 years after you stop working. If you have plenty in savings, you can stop working 10 years earlier because you planned. You're a step ahead of others who lost money because of the stock market crash and didn't plan for retirement.

3. New Career

Anybody that's tried to obtain a regular business loan from a bank knows how difficult it has been to get one since the Great Recession. The same is true for many opting for Small Business Administration loans -- even for people who have a business with cash flow. It's hard to start a business unless you have a lot of capital in the bank. If someone opts for a reverse mortgage and takes out $150,000 to $200,000 in equity, they can parlay that into buying or starting their own business. Not everyone has the aptitude to start a business, but if you do, it's a smart way to take that small amount of money and turn into a long-term income stream and asset that eventually you can sell. That $150,000 over 10 years can be turned into more than $1 million in income for the savvy business owner. By using the reverse mortgage as a business loan to yourself, you don't have to pay that loan back, so your cost of capital is lower than the competition down the street. Potentially, you can be cheaper than your competition. Again, it's not an option for everybody because a lot of people go out of business. But for those who want to proceed, they know the biggest challenge is coming up with that initial capital. In the beginning, the need for cash is greater than the cash flow. When most business are started out of pocket, that's a huge advantage.

4. Travel Travel of any kind isn't an option for people who haven't planned for retirement. Taking care of daily expenses and needs is what's most important. But for some older Americans who have enough money stashed away for their retirement needs, they may choose a reverse mortgage to travel to places they've never been or address other wants on their bucket list. Many people, when they're too old to travel or otherwise hampered by poor health, often look fondly about the trips they took with their grandchildren, spouses and friends. Those are some of the greatest memories of their lives. Whether it's a trip around the world or a jaunt to some European or Asian capitals, many people want to go but don't want to touch their investment income for that purpose because it's expensive to do so. The equity in your home isn't earning a return and it's a perfect place to tap for beautiful memories.

5. Peace of mind Peace of mind is one universal pursuit most of us strive to achieve every day. The ability to not have to worry and have contingencies in place. The reverse mortgage is such a realistic vehicle for a lot of people. It's a line of credit that grows over time and is always available to you when you need it. You may not need it, but it's there if something happens. Let's say we get Alzheimer's or have a stroke and need assisted living. That's the worst time in your life to worry about how you're able to pay for it. You have so much going on, and everybody is stressed. You don't want to make financial decision in a crisis.

The reverse mortgage is a line of credit you can leverage when other unexpected financial hardships occur. It may only be a car engine blowing up or is damaged in some way and you need a new car. It's very inexpensive money from which to draw because there's no monthly payment being paid and none lost to the stock market by not keeping it invested. No one wants to sell assets at a low point when you bought it high. The peace of mind could simply be downsizing or paying for many years in an assisted living facility. Many people aren't prepared for elderly care. Leverage is why we bought the house, especially if some of us didn't plan for retirement, as we should have done. If you're not leveraging it, that equity has no value.

Not everyone understands what a reverse mortgage actually is and there is a lot of misinformation out there, even in otherwise reputable and reliable media sources. Some think the name means you have to give your house back. You don't. Maybe the Australian term of an opposite mortgage explains it better. It's your house in which you can enjoy the appreciation it has built over the years. It's only a mortgage that has the most flexible repayment terms there are. You can keep on making your mortgage payments for now, but you know if you lose your job, your health or you have to stop making payments, you aren't in danger of going into foreclosure. Yes, a reverse mortgage gives you peace of mind.

Now It Counts is the new destination for Americans 50+ covering financial, health, beauty, style, travel, news, entertainment and sports. Read more at; http://nowitcounts.com