The Right Collection Agency
by Malik Toppins
As a motivated entrepreneur I had done very well for myself in the real estate market. I was able to acquire many homes and work spaces in need of a little care and fix them up to be ready for companies to occupy. This was working very well for me and allowed me to support my wife and three children for a handful of years. Unfortunately, the market began to flop and my luck began to run out.
Many of the residents that I worked with began to skip out on payments and it was severely hurting my income. The litigation involved with collecting the funds that were owed to me were becoming increasingly expensive and very time consuming. It seemed as though my choices were running thin and I was in need of some help.
I began to search through collection agencies, but was not impressed with any of the agencies I found. Most of the collectors I found all suggested that they were confined to collections within certain states. They also seemed very secretive about their methods of collection.
Finally, a friend of mine recommended Rapid Recovery Solutions as the perfect answer for me. Rapid Recovery Solutions were very open about their professional methods of collection and were licensed to collect in every state in the U.S. as well as many locations internationally. What impressed me even more about Rapid Recovery Systems was that there is no upfront charge like the other collection agencies I had researched. In fact, there is no charge at all until your money has been collected!
Rapid Recovery Solutions is not like the other agencies that are not concerned with building trust with their clients and perform their collection services the way any other bill collector would. They work with the belief that trust will be built through performance and results. For an agency with a collection rate that is among the highest in the industry, I find that to be one of the most impressive qualities.
Showing posts with label commercial debt collection. Show all posts
Showing posts with label commercial debt collection. Show all posts
Monday, November 7, 2011
Monday, July 25, 2011
HOAs- Manditory Or Voluntary?
HOAs- Manditory Or Voluntary?
by Takara Alexis
Numerous homeowners living in these voluntary associations have been happy until in recent times, when some busy-bodies felt that it was time for changes. These people come together and claim it's time to change the community.
Especially in the Orlando area homeowners complained recently that they received letters from their board, claiming that the former voluntary association has been changed into a mandatory association, new deed restrictions have been established and you must pay your dues immediately. In a second and third letter threats of liens, foreclosures etc. have been added to these demands. And all under the cover of a majority vote.
According to some Florida Court Rulings this is not the way it works. If you are a member of a voluntary association you can't be forced without your agreement to become a member of a mandatory association. Don't let these busy-bodies threaten or intimidate you! They have zero right to do so. As long as the deed to your property doesn't say that your property belongs to a mandatory association, nobody can force you.
Numerous homeowners living in mandated properties would only be too happy to be able to get away from them. A lot of law-suits all over the nation are proof of all the existing problems. It appears very obvious that this program has failed the homeowners badly and is only staying alive because the industry is fighting like crazy not to lose their valuable cash cow.
These people will tell you how great the advantages are of being a member of a mandatory association. No pink houses in your neighborhood, no old cars in the drive-ways and no flag poles in the neighbors' front yard. And your property values will go up in no time!
What they definitely won't tell you is that your money can be used to sue you, that you'll be financially responsible for any of the association's liabilities and that other people, like these busy-bodies, have suddenly the right to tell you what to do and not to do on your own property. They will tell you that your dues will be used to improve your neighborhood. They will not tell you that often more than 50% of the collected dues will be used to pay industry partisans like management companies and HOA attorneys.
And in regards of mandatory homeowners' associations raising property values? Don't fall for this industry fairy tale! There are many examples which render this claim absolutely false! Texas Senate hearings revealed a recent study from Harris County, Houston, TX , which clearly proves that just the opposite is the case. Please see the well documented statistics at supporting documents. And in case of a planned resale the title companies' search will reveal that your property belongs to a mandatory HOA. And since more and more home buyers realize what HOAs are all about, it might even inconvenience your resale intentions.
by Takara Alexis
Numerous homeowners living in these voluntary associations have been happy until in recent times, when some busy-bodies felt that it was time for changes. These people come together and claim it's time to change the community.
Especially in the Orlando area homeowners complained recently that they received letters from their board, claiming that the former voluntary association has been changed into a mandatory association, new deed restrictions have been established and you must pay your dues immediately. In a second and third letter threats of liens, foreclosures etc. have been added to these demands. And all under the cover of a majority vote.
According to some Florida Court Rulings this is not the way it works. If you are a member of a voluntary association you can't be forced without your agreement to become a member of a mandatory association. Don't let these busy-bodies threaten or intimidate you! They have zero right to do so. As long as the deed to your property doesn't say that your property belongs to a mandatory association, nobody can force you.
Numerous homeowners living in mandated properties would only be too happy to be able to get away from them. A lot of law-suits all over the nation are proof of all the existing problems. It appears very obvious that this program has failed the homeowners badly and is only staying alive because the industry is fighting like crazy not to lose their valuable cash cow.
These people will tell you how great the advantages are of being a member of a mandatory association. No pink houses in your neighborhood, no old cars in the drive-ways and no flag poles in the neighbors' front yard. And your property values will go up in no time!
What they definitely won't tell you is that your money can be used to sue you, that you'll be financially responsible for any of the association's liabilities and that other people, like these busy-bodies, have suddenly the right to tell you what to do and not to do on your own property. They will tell you that your dues will be used to improve your neighborhood. They will not tell you that often more than 50% of the collected dues will be used to pay industry partisans like management companies and HOA attorneys.
And in regards of mandatory homeowners' associations raising property values? Don't fall for this industry fairy tale! There are many examples which render this claim absolutely false! Texas Senate hearings revealed a recent study from Harris County, Houston, TX , which clearly proves that just the opposite is the case. Please see the well documented statistics at supporting documents. And in case of a planned resale the title companies' search will reveal that your property belongs to a mandatory HOA. And since more and more home buyers realize what HOAs are all about, it might even inconvenience your resale intentions.
Friday, June 24, 2011
The Millennial Generation
The Millennial Generation
by Takara Alexis
The millennial generation is composed of people under the age of 25. They are currently experiencing an unthinkable level of high unemployment. In May of 2010, unemployment for 21-25 year olds was 15.8%. Today, unemployment for those who are college graduates is three times higher than the typical average.
To worsen their situation, 26.9% of the millennials are uninsured. The second most likely age group to be uninsured is made up of 26-34 year olds. Of this age group, 25.9% are uninsured. Together these two age groups display the largest percentage of uninsured in the U.S. The millennials are going through a dramatic rise in student loan debt. For the first time in recent history, outstanding consumer loan debt hit $829 billion, exceeding credit card debt ($826 billion). Student loan debt is also growing faster than credit card debt within the past 90 days.
The millennials debt amount is rising in general as compared to prior generations. Families with heads of households under the age of 35 have the highest leveraged ratio of debt compared to all age groups.
Americans in their early 20s have a particularly short attention span, and this certainly applies to millennials. Their preferred methods of communication include text messaging, social media, and mobile phones. They disregard email communications unless the emails are pushed to their smart phones and even when they are pushed to their smart phones, the millennials will usually not answer emails. They want immediate access to information and immediate responses to their communications.
The millennnials are community-influenced. This means they search for information from their peers before making many choices. And they seek their information almost exclusively online. They are not likely to first seek information from a single source or a traditional authority figure such as a parent, a doctor, or a family friend. Instead they will seek information from social media sources that represent the collective wisdom of many.
This demographic is also highly transient and hard to find. They're more likely to be located by way of their phone than at a permanent residence. Not surprisingly, the millennials are perfectly comfortable being tracked and targeted. But as a consequence, they are extremely protective of their mobile phone number and will go to extraordinary lengths to maintain their mobile phone number over time despite expense or inconvenience.
The constraints presented by the Telephone Consumer Protection Act (TCPA) regarding the use of auto dialers are archaic. The millennials are very much capable of informing the debt collector whether it is convenient for them to receive calls or text messages on their wireless phones as already allowed by the Fair Debt Collection Practices Act (FDCPA). In short, the consumer should control the decision as to who and how they may be contacted on their wireless phone/computer instead of the government and the law needs to catch up with technology.
Looking for a reliable commercial collection agency? Rapid Recovery Solution is number one rated and collects on both commercial and consumer debts, with no upfront fees! RRS is attorney based and very efficient when it comes to collecting debt. Contact them today and get your FREE quote!
by Takara Alexis
The millennial generation is composed of people under the age of 25. They are currently experiencing an unthinkable level of high unemployment. In May of 2010, unemployment for 21-25 year olds was 15.8%. Today, unemployment for those who are college graduates is three times higher than the typical average.
To worsen their situation, 26.9% of the millennials are uninsured. The second most likely age group to be uninsured is made up of 26-34 year olds. Of this age group, 25.9% are uninsured. Together these two age groups display the largest percentage of uninsured in the U.S. The millennials are going through a dramatic rise in student loan debt. For the first time in recent history, outstanding consumer loan debt hit $829 billion, exceeding credit card debt ($826 billion). Student loan debt is also growing faster than credit card debt within the past 90 days.
The millennials debt amount is rising in general as compared to prior generations. Families with heads of households under the age of 35 have the highest leveraged ratio of debt compared to all age groups.
Americans in their early 20s have a particularly short attention span, and this certainly applies to millennials. Their preferred methods of communication include text messaging, social media, and mobile phones. They disregard email communications unless the emails are pushed to their smart phones and even when they are pushed to their smart phones, the millennials will usually not answer emails. They want immediate access to information and immediate responses to their communications.
The millennnials are community-influenced. This means they search for information from their peers before making many choices. And they seek their information almost exclusively online. They are not likely to first seek information from a single source or a traditional authority figure such as a parent, a doctor, or a family friend. Instead they will seek information from social media sources that represent the collective wisdom of many.
This demographic is also highly transient and hard to find. They're more likely to be located by way of their phone than at a permanent residence. Not surprisingly, the millennials are perfectly comfortable being tracked and targeted. But as a consequence, they are extremely protective of their mobile phone number and will go to extraordinary lengths to maintain their mobile phone number over time despite expense or inconvenience.
The constraints presented by the Telephone Consumer Protection Act (TCPA) regarding the use of auto dialers are archaic. The millennials are very much capable of informing the debt collector whether it is convenient for them to receive calls or text messages on their wireless phones as already allowed by the Fair Debt Collection Practices Act (FDCPA). In short, the consumer should control the decision as to who and how they may be contacted on their wireless phone/computer instead of the government and the law needs to catch up with technology.
Looking for a reliable commercial collection agency? Rapid Recovery Solution is number one rated and collects on both commercial and consumer debts, with no upfront fees! RRS is attorney based and very efficient when it comes to collecting debt. Contact them today and get your FREE quote!
Wednesday, June 1, 2011
Success Rate Valued Over Price When Choosing A Debt Collection Agency
Success Rate Valued Over Price When Choosing A Debt Collection Agency
by Takara Alexis
The latest "Global Collections Review" survey, lets us see a new trend amongst businesses when selecting a debt collections agency. Unlike in the past year, companies put more attention on the agencies' success rate, less the cost.
This craze can be seen amongst many major European countries and reveals a mindshift in European businesses seeking support from external agencies when collecting outstanding debt. The success rate of a debt collections agency easily allows comparison between collection agencies' performance. The success rate is defined as the value of collected payments of the total debt received and expressed as a percentage. The total excludes insolvencies and withdrawals.
Successful debt collections and establishing solvency is essential to business. The study has made clear that the choice of a collection agency is made based on its quality, meaning its performance and ability to succeed in collecting, and not price.
The ability of external debt collection agencies to deliver results is the key factor for businesses to employ a debt collections agency.
With the economy picking up and staff busy focusing on incoming business, collecting debt can again be seen as a task that is more frequently handed over to external agencies.
Leader in usage of external debt collections agencies is the Netherlands where 65% of the surveyed businesses have used this service and is much higher than in countries, such as Spain which remains at a low 20%.
Broken down by sectors, companies operating in the financial services sector seem to use a debt collections agency more often while in the other sectors, such as manufacturing, wholesale and retail trade and distribution, services, companies have a preference towards collecting internally.
Overall, European attitudes relating to the choices of debt collection agencies were incredibly similar, which indicates that the requirements, expectations and high standards demanded of agencies are constant factors irrespective of business size, type or location.
Rapid Recovery Solution is an attorney based collections agency specializing in debt recovery. Our collection agency attorney works non-stop along with our many experts at Rapid Recovery to quickly collect your money. Contact RRS for more information or request your FREE quote today!
by Takara Alexis
The latest "Global Collections Review" survey, lets us see a new trend amongst businesses when selecting a debt collections agency. Unlike in the past year, companies put more attention on the agencies' success rate, less the cost.
This craze can be seen amongst many major European countries and reveals a mindshift in European businesses seeking support from external agencies when collecting outstanding debt. The success rate of a debt collections agency easily allows comparison between collection agencies' performance. The success rate is defined as the value of collected payments of the total debt received and expressed as a percentage. The total excludes insolvencies and withdrawals.
Successful debt collections and establishing solvency is essential to business. The study has made clear that the choice of a collection agency is made based on its quality, meaning its performance and ability to succeed in collecting, and not price.
The ability of external debt collection agencies to deliver results is the key factor for businesses to employ a debt collections agency.
With the economy picking up and staff busy focusing on incoming business, collecting debt can again be seen as a task that is more frequently handed over to external agencies.
Leader in usage of external debt collections agencies is the Netherlands where 65% of the surveyed businesses have used this service and is much higher than in countries, such as Spain which remains at a low 20%.
Broken down by sectors, companies operating in the financial services sector seem to use a debt collections agency more often while in the other sectors, such as manufacturing, wholesale and retail trade and distribution, services, companies have a preference towards collecting internally.
Overall, European attitudes relating to the choices of debt collection agencies were incredibly similar, which indicates that the requirements, expectations and high standards demanded of agencies are constant factors irrespective of business size, type or location.
Rapid Recovery Solution is an attorney based collections agency specializing in debt recovery. Our collection agency attorney works non-stop along with our many experts at Rapid Recovery to quickly collect your money. Contact RRS for more information or request your FREE quote today!
Thursday, April 21, 2011
Avoiding Retirement Hazards
Avoiding Retirement Hazards
by Takara Alexis
As health care costs keep rising dramatically all of the time, employers are also shifting more weight of the prices onto their employees. Many companies are starting to drop retired workers from their health plans, and on top of that, millions of Americans have no form of coverage at all.
So one of the most common mistakes made in retirement, is a lack of preparation for the financial impact of your health. One very overlooked and most expensive costs is long-term healthcare. Long-term health costs can be devastating to a financial plan, so buying long term care insurance early on can assist with minimizing its costs severely.
A typical assumption is that you should have enough retirement assets to last you until your life expectancy is reached.
But today, the world is always going through changes. As medical technology goes up along with life expectancy, the odds are good that at least you or your spouse will live past age 90. So it is vital that you are prepared to live longer.
Your generation is famous for working extra long, hard and abnormal hours to try to get ahead. And most baby boomers agree that they will be working long into retirement. But that could be one of the biggest retirement mistakes you make.
As of now, the average age of retirement in America, is 62. According to the Employee Benefit Research Institute Retirement Confidence Survey of 2007, among retirees who had to leave the workforce earlier than they wanted to, 28% did so because of disability, 28% because of layoffs or corporate restructuring and 25% to care for a spouse or family member. So even if you decide to work as long as you can, it may not always be possible and it's vital that you plan and save for such a scenario.
by Takara Alexis
As health care costs keep rising dramatically all of the time, employers are also shifting more weight of the prices onto their employees. Many companies are starting to drop retired workers from their health plans, and on top of that, millions of Americans have no form of coverage at all.
So one of the most common mistakes made in retirement, is a lack of preparation for the financial impact of your health. One very overlooked and most expensive costs is long-term healthcare. Long-term health costs can be devastating to a financial plan, so buying long term care insurance early on can assist with minimizing its costs severely.
A typical assumption is that you should have enough retirement assets to last you until your life expectancy is reached.
But today, the world is always going through changes. As medical technology goes up along with life expectancy, the odds are good that at least you or your spouse will live past age 90. So it is vital that you are prepared to live longer.
Your generation is famous for working extra long, hard and abnormal hours to try to get ahead. And most baby boomers agree that they will be working long into retirement. But that could be one of the biggest retirement mistakes you make.
As of now, the average age of retirement in America, is 62. According to the Employee Benefit Research Institute Retirement Confidence Survey of 2007, among retirees who had to leave the workforce earlier than they wanted to, 28% did so because of disability, 28% because of layoffs or corporate restructuring and 25% to care for a spouse or family member. So even if you decide to work as long as you can, it may not always be possible and it's vital that you plan and save for such a scenario.
Collection Fees On HOA Bills
Collection Fees On HOA Bills
by Takara Alexis
Collection agencies could charge up to $1,950 plus "reasonable attorney fees" on a house that is late on its homeowner association assessment under a bill passed out of committee Friday by Senate Democrats.
Senate Bill 174 passed along party lines after an intense debate that had Republicans accusing Democrats of wading into a legal battle in favor of collection agencies.
The bill is usually supported by homeowner associations and collection agencies and opposed by consumer protection groups and investors. Sen. Allison Copening, D-Las Vegas, argued that the fee cap would protect homeowners from the excessive collection practices, and "reasonable attorney fees" could be settled by a judge. She said that the collection agency fees are required to keep homeowner associations solvent and able to provide services for existing residents.
Copening works as a lifestyle director for a homeowner association management company, and critics, including homeowners unhappy with their association boards, have said her outside employment presents an issue.
The legislation has been a source of drama this week, and a sign that the Democratic assembly is less than iron clad. Copening this week initially would not say whether she was a part of the Democratic caucus.
Tempers flared Friday in a back and forth between Copening and Sen. Michael Roberson, R-Las Vegas. Sen. Valerie Wiener, chair of the Judiciary Committee, stopped the sides at one point and said, "Take a breath. Take a breath."
Friday was the deadline for bills to make it out of committee, and SB174 now moves to the full Senate.
Consumer advocates said collection fees on late HOA bills have become a growing problem in the recession and as people walk away from their houses.
"The fees that are being charged to homeowners for past-due HOA fees are exorbitant," said Cena Valladolid, operations director for the nonprofit Consumer Credit Counseling Services in Las Vegas. She said collection agencies hired by HOAs have been unwilling to minimize payments or offer any flexibility to consumers.
The bill specifies that collection agency fees are "super-priority liens" - moving to the front of the line to be paid back when a house is sold. Investors have argued that collection agency fees should not be "super-priority," which they say the Legislature specifically reserved for past homeowner association dues.
Republicans argued that the Senate bill wouldn't do much to slow a problem in Nevada of aggressive collection agencies taking on fees of thousands of dollars on relatively small homeowner association bills. Roberson said the Legislature should also refrain from getting involved in a legal disagreement between two private parties.
Copening brought up the case of Paradise Spa homeowner association in Las Vegas, which was raided by the FBI and Nevada Attorney General's office last week. A single investor there owes more than $1 million in assessments, she said. Residents face having their gas shut off on Monday, Copening said, calling the investor a "slumlord."
Roberson, an attorney, scoffed at the "reasonable" attorney fees in the bill. "How are homeowners supposed to dispute 'reasonable or not?'" he said.
"They're going to have to hire their own attorney, and have more legal fees?" said Sen. Ruben Kihuen, D-Las Vegas, who added he was not completely satisfied with the bill, and reserved the right to vote against it on the floor. He said he would move it forward to prevent excessive fees right now.
Sen. Shirley Breeden, D-Henderson, was the other undecided Democrat on the Committee. She called Copening's bill "a good start" to capping collections.
A regulation pending in front of a Legislative committee is arranged to cap the collection fees at $1,950 per home, plus costs.
by Takara Alexis
Collection agencies could charge up to $1,950 plus "reasonable attorney fees" on a house that is late on its homeowner association assessment under a bill passed out of committee Friday by Senate Democrats.
Senate Bill 174 passed along party lines after an intense debate that had Republicans accusing Democrats of wading into a legal battle in favor of collection agencies.
The bill is usually supported by homeowner associations and collection agencies and opposed by consumer protection groups and investors. Sen. Allison Copening, D-Las Vegas, argued that the fee cap would protect homeowners from the excessive collection practices, and "reasonable attorney fees" could be settled by a judge. She said that the collection agency fees are required to keep homeowner associations solvent and able to provide services for existing residents.
Copening works as a lifestyle director for a homeowner association management company, and critics, including homeowners unhappy with their association boards, have said her outside employment presents an issue.
The legislation has been a source of drama this week, and a sign that the Democratic assembly is less than iron clad. Copening this week initially would not say whether she was a part of the Democratic caucus.
Tempers flared Friday in a back and forth between Copening and Sen. Michael Roberson, R-Las Vegas. Sen. Valerie Wiener, chair of the Judiciary Committee, stopped the sides at one point and said, "Take a breath. Take a breath."
Friday was the deadline for bills to make it out of committee, and SB174 now moves to the full Senate.
Consumer advocates said collection fees on late HOA bills have become a growing problem in the recession and as people walk away from their houses.
"The fees that are being charged to homeowners for past-due HOA fees are exorbitant," said Cena Valladolid, operations director for the nonprofit Consumer Credit Counseling Services in Las Vegas. She said collection agencies hired by HOAs have been unwilling to minimize payments or offer any flexibility to consumers.
The bill specifies that collection agency fees are "super-priority liens" - moving to the front of the line to be paid back when a house is sold. Investors have argued that collection agency fees should not be "super-priority," which they say the Legislature specifically reserved for past homeowner association dues.
Republicans argued that the Senate bill wouldn't do much to slow a problem in Nevada of aggressive collection agencies taking on fees of thousands of dollars on relatively small homeowner association bills. Roberson said the Legislature should also refrain from getting involved in a legal disagreement between two private parties.
Copening brought up the case of Paradise Spa homeowner association in Las Vegas, which was raided by the FBI and Nevada Attorney General's office last week. A single investor there owes more than $1 million in assessments, she said. Residents face having their gas shut off on Monday, Copening said, calling the investor a "slumlord."
Roberson, an attorney, scoffed at the "reasonable" attorney fees in the bill. "How are homeowners supposed to dispute 'reasonable or not?'" he said.
"They're going to have to hire their own attorney, and have more legal fees?" said Sen. Ruben Kihuen, D-Las Vegas, who added he was not completely satisfied with the bill, and reserved the right to vote against it on the floor. He said he would move it forward to prevent excessive fees right now.
Sen. Shirley Breeden, D-Henderson, was the other undecided Democrat on the Committee. She called Copening's bill "a good start" to capping collections.
A regulation pending in front of a Legislative committee is arranged to cap the collection fees at $1,950 per home, plus costs.
Friday, April 8, 2011
Reverse Mortgage
Reverse Mortgage
by Takara Alexis
As thousands of Americans plan for retirement and turn to alternative sources of post work income, one that might come to mind is a reverse mortgage. The concept of a reverse mortgage is pretty simple: someone pays you, based on the value of your home. There are plenty of options available as to how you want to receive this money. You may choose to take monthly payments, take a lump sum, or receive a line of credit.
When you purchased your home you probably had to make mortgage payments. As you did, you began to decrease the amount of debt owed and gradually increased the amount of equity in your home. Reverse mortgages are the opposite. As time passes, you gradually receive more and more money from the lending company.
The intention of a reverse mortgage is to have an added source of income, particularly if you plan on selling your home near the end of your life or after you die. It permits you to take in the equity from your home and enjoy it in retirement. The amount you receive in the reverse mortgage is based on the value of your home, current interest rates, and your current age.
Once you've received the amount your home has been determined to be worth, less any fees charged by the lender, you will owe that amount to the lender. You can pay that back any way you wish, but in numerous cases, the idea is to sell your home and repay the debt. Usually, this is done by an estate after a person passes away and still has debt. As long as you're permanently living in your home, you don't need to pay the lender back.
Reverse mortgages contain a lot of details and can get complicated, which is why it is best to ask a financial professional for advice prior to looking into them much further. While they may have a lot of technical details, they don't have many requirements. In general, you have to be 62 years of age or older, and own your own home. Those are the two basic requirements of a reverse mortgage. Beyond that, there are a few other basic things to keep in mind.
Reverse mortgages do have upfront costs, just like a regular mortgage. They also have monthly service costs. However, all of the money you receive from the lender is tax-free. To receive a better estimate of how much a reverse mortgage would pay you, it is wise to meet with a financial professional.
Unfortunately, reverse mortgages aren't for everyone. Reverse mortgages could supply a valuable resource to individuals when the circumstances are right, but there are many considerations to be taken before choosing one, involving: fees, restrictions, estate planning considerations, need for income, other assets, health considerations, insurance coverage, and so on.
Frequently a reverse mortgage is a last resort for income for many individuals and many individuals decide that reverse mortgages aren't for them. And in many situations, for instance, if you want the house to stay in your family for many generations, then it might not be for you.
by Takara Alexis
As thousands of Americans plan for retirement and turn to alternative sources of post work income, one that might come to mind is a reverse mortgage. The concept of a reverse mortgage is pretty simple: someone pays you, based on the value of your home. There are plenty of options available as to how you want to receive this money. You may choose to take monthly payments, take a lump sum, or receive a line of credit.
When you purchased your home you probably had to make mortgage payments. As you did, you began to decrease the amount of debt owed and gradually increased the amount of equity in your home. Reverse mortgages are the opposite. As time passes, you gradually receive more and more money from the lending company.
The intention of a reverse mortgage is to have an added source of income, particularly if you plan on selling your home near the end of your life or after you die. It permits you to take in the equity from your home and enjoy it in retirement. The amount you receive in the reverse mortgage is based on the value of your home, current interest rates, and your current age.
Once you've received the amount your home has been determined to be worth, less any fees charged by the lender, you will owe that amount to the lender. You can pay that back any way you wish, but in numerous cases, the idea is to sell your home and repay the debt. Usually, this is done by an estate after a person passes away and still has debt. As long as you're permanently living in your home, you don't need to pay the lender back.
Reverse mortgages contain a lot of details and can get complicated, which is why it is best to ask a financial professional for advice prior to looking into them much further. While they may have a lot of technical details, they don't have many requirements. In general, you have to be 62 years of age or older, and own your own home. Those are the two basic requirements of a reverse mortgage. Beyond that, there are a few other basic things to keep in mind.
Reverse mortgages do have upfront costs, just like a regular mortgage. They also have monthly service costs. However, all of the money you receive from the lender is tax-free. To receive a better estimate of how much a reverse mortgage would pay you, it is wise to meet with a financial professional.
Unfortunately, reverse mortgages aren't for everyone. Reverse mortgages could supply a valuable resource to individuals when the circumstances are right, but there are many considerations to be taken before choosing one, involving: fees, restrictions, estate planning considerations, need for income, other assets, health considerations, insurance coverage, and so on.
Frequently a reverse mortgage is a last resort for income for many individuals and many individuals decide that reverse mortgages aren't for them. And in many situations, for instance, if you want the house to stay in your family for many generations, then it might not be for you.
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