This is What You Need to Know About Reverse Mortgage Before Meeting With Your Specialist – Local Records Office

LOCAL RECORDS OFFICE: Let’s face it; retirement can be an expensive undertaking. For most people, they’re bills increase, and their income a decrease says, ‘Local Records Office’. For people who own their own house, reverse mortgage specialists can help alleviate some of the financial burden of retirement. These loans are also known as home equity conversions, or HECM for short. So here are three things to know about HECMs.

What Is a Reverse Mortgage?

Local Records Office says, “The basic principle is centered on the equity of a property”. A home’s equity is its value, minus the amount of any outstanding loans. So if a house is valued at $150,000, and $30,000 is still owed to the bank, the equity is $120,000. So what an HECM essentially does is it allows homeowners to borrow against the equity of their house, while at the same time halting any payments on the home’s note. Owners simply have to continue paying the taxes and insurance on the property. Since the loan type is designed for people in retirement, applicants must be at least 62 years old to qualify. Furthermore, the house that the loan is being taken out on must be the applicant’s primary residence.

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How Can It Be Dispersed?

As discussed above, the purpose of an HECM is to help elderly homeowners supplement their income. Since every person has different financial duties, reverse mortgage specialists can work with applicants to find the best disbursement method. The first option is a lump sum, which most applicants deposit into their savings account. The second option is to establish monthly payments to the homeowner for a set number of years, or even for life says, Local Records Office. For people who have trouble handling money, this can provide a steady income. The third option creates a line of credit for the homeowner, to use at his or her own discretion. This is a wonderful choice for an applicant who has enough to handle month-to-month bills, but would not be able to pay for an unexpected expense such as a damaged car or a medical issue.

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When Does The Loan Come Due?

One of the biggest perks that reverse mortgage specialists like to tout is that an HECM allows people to stay in their residences until they pass away. Along with the original borrower, any non-borrowing spouse can also continue to live in the residence, payment free, until they die, as well says, Local Records Office. In order for borrowers to stay until death, they must continue to pay property taxes and insurance, provide the property with basic upkeep, and maintain the title in their own name. When the loan finally becomes due, the heirs of the property can pay it off and keep the residence, sell the house to settle the loan, or allow the bank to sell the house.

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Cancellation of a Real Estate Contract, What to Expect – Local Records Office


Local Records Office – NORWALK, CA – On occasion, either the buyer or seller will attempt to walk away from a purchase agreement, totally disregarding any legal ramifications that may be forthcoming. It is important for parties to fully understand the consequences when they fail to perform according to the terms and conditions of the contract.

Let’s say a buyer enters into a contract with a seller and puts $5,000 in a title company’s escrow account says Local Records Office. The contract allows for the buyer to conduct a home inspection within five (5) days of the effective date of the contract, which is the date the last party, signed the contract.

The contract further requires the seller to pay for any repairs that may be required as a result of the inspection’s revelations. The inspection provision of the standard contract DOES NOT arbitrarily allow the buyer to cancel the contract because he or she doesn’t like the results of the inspection says, Local Records Office.

In this case, if the repairs do not exceed 1.5 percent of the purchase price, the buyer does not get a free walk. The contract also requires the buyer to formally apply for a home mortgage within five (5) days of the effective date. Once the buyer fails to apply for a loan, he or she has breached the terms of the contract. The results of the inspection report are moot.

Will Cancelling My Contract Cost me a lot of Money?

Now comes the issue of canceling the contract and releasing the earnest money deposit. The buyer will have his or her agent prepare a cancellation and release of deposit form delineating which party gets the deposit. The title company maintaining the funds generally requires this form. When the parties fail to agree as to who gets the money, the money will remain in escrow until instructed otherwise.

Local Records Office says, “This posturing can go on for months”. Consequently, there remains a legal issue as to whether the seller is allowed to place the property back on the market. Even though the contract may have been breached, it is still a valid contract.

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These kinds of situations benefit neither party and cause nothing but frustration says Local Records Office. Unless the earnest money is really substantial, the seller could expect to pay legal fees that would make it prohibitive to pursue legal action to retain the deposit. In our example, the deposit is $5,000. It may be more logical for the seller to sign the cancellation, release the deposit back to the buyer, and get the property back on the market.

These types of issues occur from time to time. It would be prudent for a buyer or seller to fully understand what can happen from these types of circumstances. The foregoing is not intended to be legal advice. Please contact a real estate attorney if you find yourself in a similar situation.

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