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With a Reverse Mortgage, Your Home Can Pay You to Live in it

What is a reverse mortgage?

A reverse mortgage, more properly a Home Equity Conversion Mortgage (HECM), is a Federal Housing Authority (FHA) mortgage that’s designed to help senior citizens age with dignity by remaining in their homes.

With a reverse mortgage, seniors 62 and older are eligible to withdraw up to 50% of the appraised value of their homes.

Unlike other loans, recipients don’t need to make monthly payments. No payment will be due until the home is sold, though seniors can make payments to reduce the outstanding loan if they choose to do so. You still own your home and can never be forced to leave as long as you meet the loan requirements listed below.

Interest will be added to the loan for each month that goes by without a payment, but the total amount of money that’s owed on the loan can never exceed the appraised value of the home at the time the mortgage was made, no matter how many years you remain in the property.

Why should I get a reverse mortgage?

A reverse mortgage benefits seniors by converting their home equity into cash that they can use to improve their lifestyle and reduce the stress that can come with the added expenses associated with aging.

Further, the money you’ll receive from a reverse mortgage is not subject to income taxes. Since it’s not earned income, it’s already your money. It’s just the same as if you were withdrawing from your savings account.

If you’re a senior citizen, you’ve likely been paying to live in your home for years. A reverse mortgage gives you the opportunity for your home to pay you to live in it, freeing you from monthly mortgage payments and allowing you to improve the quality of your life by redirecting those funds for you to use as you wish.

What are the requirements of a reverse mortgage?

To qualify for a reverse mortgage, the FHA requires that…

  • Applicants are 62 or older
  • The applicant must own the home
  • The home is the applicant’s primary residence
  • The home must be kept in good repair
  • The applicant must have enough income to pay property taxes and home insurance (which is usually covered by social security and/or pension income)

A reverse mortgage can be an economic lifesaver. The FHA is very diligent in making sure seniors have the proper information and instructions before starting the process. However, it’s very important that you utilize the services of experienced attorneys to ensure that all your rights and your heirs’ rights are protected. To discuss the details and find out the facts, contact us.

Dealing with Credit Scores and Interest Rates

The first few times you run into credit scores, interest rates, and APRs in your life, it probably has something to do with your credit card. If you’re carrying a balance of a couple thousand dollars on a card, you’re often looking at maybe $10 per month is the difference between a 15% and a 20% APR. But home buying is different. The amount of money floating around when a home is purchased can be in the six or even seven figures–over a million dollars. Even a few fractions of a percentage point can add up quickly and cost you hundreds extra per month.

Credit Options
Luckily, you have options. If your Credit Score just needs a little repair, you can make a couple tweaks and save thousands on a home. You’re unlikely to get advice like this from most title companies, who get paid more when your interest rate is higher. There are ways for home buyers to fight back against the policies that bleed them dry when trying to afford a house, and credit repair is the first step. Along with buyer-friendly policies like the Butler Rebate, home buyers can find ways to afford their dream house.

Credit Repair
Credit Repair is a complicated concept, and it doesn’t always work exactly the way it seems like it should. When focusing on bringing your credit score up, it’s important to consult a group of professionals who know the ins and outs of the system. Pujol Law Group is a real estate attorney group who proudly provide full Title and Closing services. With over 8,500 properties closed, Pujol Law Group is no stranger to South Florida real estate. Unlike others in the industry that you may work with, Pujol Law Group is happy to have their experts chip away at your credit issues, bringing your score up to something you’re happy with. Please don’t hesitate to contact us today if you’re interested in a consultation about our credit repair services.

Butler Rebate

What Florida buyers and sellers should know about the Butler Rebate

What Florida buyers and sellers should know about the Butler Rebate

In the course of buying a home, the topic of title insurance will come up a number of times. If you are a homebuyer, odds are you are probably expecting to finance your purchase with a mortgage from a bank or other lending institution.  In most cases, your lender will require you to purchase a lender’s title insurance policy at closing in an amount equal to the loan. In addition, buyers often ask a seller to pay for an owner’s title insurance policy as well.  These policies protect the named insured (owner or lender) against the costs of previously unknown title defects that might have existed at the time of purchase.

In Florida, both the buyer and seller in a real estate transaction are allowed to pay the cost of the lender’s and the owner’s title insurance policies.   As such, who pays in each transaction is subject to agreement by all the parties in the Purchase and Sales Agreement.

So what exactly is the Butler Rebate? How does it affect me?

The premiums charged for title insurance in Florida are established and regulated by the Florida Office of Insurance Regulation. However, in the year 2000, a Gainesville developer named S. Clark Butler filed suit against the State of Florida because he wanted the ability to negotiate fees for title insurance with local agents. Florida law at that time prohibited agents from giving back or rebating any portion of the premium they received as a commission. Butler’s attorneys argued successfully that it was unconstitutional for the State of Florida to set the compensation received by a title agent, as that was as much 70% of the premium charged for a policy by title insurance companies. The Florida Supreme Court agreed, and thus was born what folks refer to today as the “Butler Rebate.”

If you are buying or selling real property in Florida today, the Butler Rebate means you can negotiate a rebate on your title insurance costs at closing.  Your title insurance agent should be willing to negotiate his commission and/or provide a rebate at settlement to the party responsible for paying for the lender’s and owner’s title insurance policies.

The Pujol Law Group is pleased to offer the Butler Rebate to our clients. For more information, please contact us.

Understanding Your Credit Score and How It Affects Your Interest Rate

Understanding your credit score and how it affects any loan you apply for is a challenge.

About 1/3 of your credit score is based on whether you pay your bills on time. Another 1/3 on how much of your credit you use (utilization).

Creditors and lenders are more cautious of whom they loan money to. Simply put, if you have a poor or bad credit score, you are bad credit risk; your access to money is limited, and open to fewer opportunities. This is sad, but definitely how it is! But most importantly, you can fix it! How? One way is to contact …….

Your Credit Score Determines Your Interest Rate Which Effects Your Monthly Payment
The higher your credit score the less you will have to pay in interest to borrow money.
You may get a car loan, but the interest rate you will pay will be higher than a person with good or excellent credit. You will be paying more, perhaps hundreds if not thousands more

Credit Scores:
• 500 – 579 – It is difficult to get a home loan with a score this low. If approved expect a loan 2% more than average rate. FHA loans might be available but more down payment is required.
• 580 – 619 – An improvement, but a 1% higher rate than the average.
• 620 – 679 – Typically there is only a 0.5%-1% interest rate higher.
• 680 – 720 – The average home buyer paying going rates.
• 720 – 770 – Gets you the best rates.

Tips for Lowering your Credit Score:

• Pay down your Credit Cards – Lower your credit Utilization. Credit cards don’t have to be paid off each month, just pay them down. Pay a bit more than the minimum. The higher the balances the more they hurt your credit score. You should get your balances as low as possible trying not to use more that 30-35% of your available credit on each card you have, before applying for a home loan.

• Pay On Time. Don’t make late payments.

Want to buy a home? Who doesn’t? Want to buy one and not pay tens of thousands of dollars more over the term of that loan because of higher interest rate lenders will charge you? Raise your credit score. Change your ways. Let us show you how!

The purchase of a home may just be the most significant purchase and investment in your life. Contact Pujol Law Group. They understand real estate, mortgages and all the facets of what goes into the purchase or sale of property. Get a team of seasoned individuals, with experience in over 8500 real estate transactions, on your side to help lessen the stress and protect your rights.