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1. Assess Your Financial Health Credit Score: Check your credit score (usually 620 or higher is required, though higher scores get better rates). Debt-to-Income Ratio (DTI): Calculate your monthly debt payments compared to your gross monthly income (lenders typically prefer a DTI below 43%). Savings: Ensure you have enough for a down payment (typically 3-20%) and closing costs. 2. Gather Financial Information Lenders will need the following: Proof of income (pay stubs, tax returns, W-2s/1099s). List of assets (savings, investments, retirement accounts). Details of current debts (credit card balances, student loans, etc.). 3. Choose a Lender Research different lenders, including banks, credit unions, and online lenders. Compare prequalification options (many allow online applications). 4. Complete the Prequalification Process Fill out the lender’s prequalification form (online, over the phone, or in person). Provide basic details about your income, debts, and assets. 5. Review Prequalification Results The lender will give you an estimate of the loan amount and potential interest rate. Remember, prequalification is not a guarantee of approval and doesn’t involve a hard credit inquiry. 6. Follow Up with Preapproval If you’re serious about buying, consider getting preapproved, which involves a more in-depth review and is stronger than prequalification. Tips: Use online calculators to estimate affordability before reaching out to lenders. Avoid large purchases or opening new lines of credit during the prequalification and preapproval process. Would you like details on specific lenders or tools to compare mortgage options? tune in and learn at https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

Many retirees have said they rely largely — and sometimes entirely — on Social Security benefits as their primary income stream in retirement . But in instances where these payments may not be enough to make ends meet, other options should be considered — and in the right situation, a reverse mortgage could be one such option.  That’s according to a column published this week by USA Today , which assessed reverse mortgages in tandem with options such as personal savings, a part-time job and other benefits programs. “A reverse mortgage is a possibility for seniors with substantial equity in their homes,” the column stated. “It essentially enables you to borrow against your equity, and you aren’t required to make any payments while you’re still alive as long as you live in the house.” The column is likely referencing the Home Equity Conversion Mortgage ( HECM ) program insured by the Federal Housing Administration (FHA). Loan proceeds are dependent on the amount of equity in the home and current interest rates, the column noted, and there are multiple disbursement options available, the column noted. The minimum age requirement of 62, a core tenet of the HECM program, was also mentioned. “There are closing costs and other fees, and you’ll still be responsible for maintaining the property and paying the property taxes and homeowners insurance,” the column noted. It characterized the loan as a “solid option” for those who have few other assets beyond their homes, adding that “it might not be the right move if you intend to pass the property on to your heirs someday. After you pass away or move out of the home, you or your estate will have to repay the loan. This will reduce how much your heirs receive.” Recent survey data from Clever Real Estate highlighted some realities of relying on Social Security benefits in retirement. Roughly one in five respondents in the 1,000-person survey said they rely exclusively on Social Security benefits as their sole income stream in retirement, with nearly 30% saying they believed they would be able to rely on them. Last year, data from Nationwide suggested that an increasing number of older investors believe that retiring at the age of 65 is no longer a realistic option . This is largely tied to higher levels of stress they’re feeling about the economy and the cost of living.

Deciding whether it’s a good time to buy a home amid higher interest rates depends on several factors. Here are some considerations to help you make an informed decision: 1. Your Financial Situation Affordability: Higher interest rates generally lead to higher monthly mortgage payments, which could impact your ability to afford a home. If you have a stable income and can comfortably manage these higher payments, it might still be a good time to buy. Down Payment & Savings: A larger down payment can reduce your loan size and help lower the impact of higher interest rates. If you have substantial savings, it could make sense to buy now, as you’ll likely have more equity and lower monthly payments. 2. Long-Term Investment Housing Market Trends: If you plan to stay in the home for several years, you might benefit from the property appreciation over time, even with higher interest rates. Historically, real estate tends to appreciate in value over the long term, although this can vary by location. Refinancing Opportunity: If interest rates eventually drop, you may be able to refinance your mortgage later at a lower rate, reducing your monthly payments. 3. Market Conditions Home Prices: In some areas, home prices have been high due to increased demand, so you may still face elevated prices despite higher interest rates. It’s worth considering whether you’re willing to pay the current asking price for homes in your area. Seller Motivation: In a high-rate environment, some sellers may be more willing to negotiate, especially if they’re facing longer time on the market. You might have more room to negotiate on price or terms. 4. Personal Goals If owning a home is important to your personal goals and lifestyle, it might make sense to move forward, even if rates are high. However, if your plans are more flexible and you can wait for a more favorable rate environment, it could be worth waiting. 5. Alternative Financing Options Adjustable-Rate Mortgages (ARMs): Some buyers opt for ARMs, which start with lower rates that can adjust after a certain period. This might be a way to secure a lower initial rate, but you should be comfortable with the possibility of future rate increases. Other Financing Programs: There are some government-backed programs (like FHA or VA loans) that may offer lower rates or down payment requirements, depending on your eligibility. Conclusion: It’s a mixed scenario. Higher interest rates generally make it more expensive to borrow, but if you’re financially prepared, plan to stay in the home long-term, and can find a property at a fair price, it could still be a good time to buy. On the other hand, if you’re concerned about affordability or want to wait for rates to decrease, it might make sense to hold off. Always consider speaking with a financial advisor or mortgage expert to get personalized advice based on your situation. tune in and lat earn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329 

Forty-five percent of retirement-age survey respondents are concerned that they will outlive their savings while 25% spend nearly one-third of their monthly income on housing costs. This is according to new data released by Clever Real Estate . The survey results show stark declines in overall financial sentiment based on responses from 1,000 retired Americans at least 62 years old, with a median age of 70. Forty-three percent of respondents said they would rather die sooner than outlive their savings out of concern for a decline in their quality of life. But more than one in three (39%) said they have watched their standard of living fall in retirement , while roughly one-third (30%) said they have already “spent too much” of their retirement savings. The survey cites the recommended amount of retirement savings at just over $600,000, but respondents said they have saved an average of about $308,000, barely half of this recommended amount. And 27% of respondents said they have no retirement savings at all. Interestingly, nearly half of respondents (46%) said that the media paints an overly positive picture of what retirement is actually like. More than half (53%) said they actively prioritize retirement savings over “enjoying” their post-employment lives. Just under half of respondents also admitted they didn’t begin saving for retirement until they were in their 40s, while nearly two-thirds (64%) expressed regrets about retirement. Mortgage debt was not specified, but retirees said their debt obligations are largely elevated. About two-thirds of respondents said they’re carrying some kind of debt beyond their mortgage, and nearly one-third (31%) said they are more than $10,000 in debt. Eighty percent of respondents also believe the government should be doing more to help retirees — a tall order considering the place of the Social Security program in gridlocked political conversations, particularly in a narrowly-divided Congress . At the same time, more than half of respondents (52%) feel that retirees rely too much on government programs like Social Security as opposed to their own savings.  In addition, 90% of respondents said that dedicated retirement communities are “overpriced and unaffordable for the average person,” while 72% of respondents said they could not afford a home in the current market

While recent housing market reports and trends have shown that older homeowners are unwilling to sell their homes for a variety of reasons, one of them may be the expected requirement to pay capital gains taxes stemming from the post-pandemic explosion of home-price appreciation, according to a report from Business Insider. While some homeowners are looking to cash in on the equity they’ve built up since the pandemic, these same increases in property values are driving up the number of home sales that the capital gains tax would be applied to. The capital gains tax is a federal tax that is applied when the sale of a particular asset — including a home, personal items, or stocks and bonds held as investments — is sold “for more than [a seller’s] adjusted basis,” referring to the initial cost of the item being sold, according to the IRS . Capital gains have applied to home sales with profits of more than $250,000 since 1997, when the median price of a U.S. single-family home was $124,800, according to data from the U.S. Department of Housing and Urban Development (HUD). The initial idea was for the targeted capital gains tax to apply to the most affluent homeowners. But according to data released by the U.S. Census Bureau late last month, that same median price now sits at $402,600. And considering the run-up in home prices in the early 2020s, these thresholds are likely to many home sellers, not just affluent ones, particularly since the tax is not indexed to inflation . “The share of home sales subject to the tax has more than doubled in the past few years. In 2023, 8% of US sellers made more than $500,000 in profit on the sale of their homes, the property data firm CoreLogic found,” Business Insider reported based on April 2024 data . “That’s up from 1.3% in 2003 and 3% in 2019. If the threshold had been adjusted for inflation, the $250,000 cutoff for individual home sellers in 1997 dollars would be about twice as high — $496,000 — in 2024 dollars.” Considering that the home is a central pillar of wealth for many Americans, including older homeowners, the concept of the tax biting into their finances is actively warding off some people from selling, according to CoreLogic chief economist Selma Hepp. “What we know, anecdotally, is that people are feeling locked in,” Hepp told Business Insider. “There are a good share of people for whom this is the only source of wealth savings.” Some homeowners are also in a challenging position because of high home prices in general. One 71-year old homeowner described the challenges of entering the market now, since the capital gains tax would lower his sale proceeds enough that it would be a challenge to find a new home. “If we sell our house, pay the capital gains tax, with what we’re left over with we can’t find anything to buy that’s anywhere as nice as the home we’re in,” said David Levin, a resident of Manhattan Beach, California. But many older homeowners have also given other reasons they’ve elected not to sell.  In September, Clever Real Estate released survey data showing that more than half (54%) of baby boomers have no intention of ever selling their homes. Having a home that fits their lifestyle needs, and a desire to age in place , led the reasons cited.

 What if you had access to a solution that allows your clients to eliminate their home sales contingency? They could make non-contingent or cash offers on a new home, while also removing their current mortgage payment from qualification. This would enable them to tap into their homes equity for down payments, closing costs, or even debt payoff—all while giving them up to 6 months to sell their current home for top dollar. tune in and learn httat ps://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

Did you know that in 2022, both younger and older Baby Boomers made up the largest generation of American homebuyers? This cohort accounted for 1,950,000 properties — equating to 39% of total homes purchased! 1 With over 12,000 Americans turning 65 every day in 2024, this burgeoning market will undoubtedly continue to bring more buyers and sellers to the table over the next decade. 2 However, these potential clients will also face challenges — namely market volatility, unpredictable interest rates and limited purchasing power due to increasing debt. That’s where reverse purchase financing comes into play, the funding option specifically designed for older Americans. With this option, older homebuyers can increase their purchasing power with fewer financial worries and limitations as they move towards or through retirement. For real estate professionals, this option presents an opportunity to capture more sales. Yet staggeringly few are aware of its existence. What is reverse purchase financing? Established in 2009 by the Department of Housing and Urban Development (HUD), reverse purchase financing or “Home Equity Conversion Mortgage ( HECM ) for Purchase loan program” allows those aged 62 and older to purchase a new house or certain condos by combining a one-time investment of their funds (such as profits from the sale of their current home) with reverse mortgage loan proceeds to complete the purchase. They own the home with their name on the title, as with any mortgage, traditional or reverse. But unlike financing with a traditional mortgage, monthly principal and interest payments are not required on the loan, so long as the homeowner keeps up to date with real estate taxes, homeowners’ insurance and property maintenance. As long as the buyer complies with these ongoing loan obligations, a HECM for Purchase loan doesn’t have to be repaid until a maturity event, such as when the home is sold or is no longer considered their primary residence. The down payment percentage required on the loan is higher than with a traditional mortgage (usually 60% to 65% of the cost of the new home) 3 and the owner does build less equity — but unlike a traditional loan, the borrower is not at risk of owing more than the home is worth at the time of repayment when the home is sold due to its non-recourse feature. The HECM for Purchase is not a refinancing tool; it is not akin to a Home Equity Line of Credit ( HELOC ). Rather, it’s an age-specific, federally-insured loan option that helps eligible buyers aged 62+ make a residential purchase while retaining more of their money than they could with a conventional mortgage or an all-cash purchase, generally leaving their savings and assets intact for retirement and any heirs. In addition to improved cash flow throughout the life of the loan due to the optional repayment feature, 4 buyers also enjoy additional spending power with reverse purchase financing. They are able to maximize their cash investment on a new home and more comfortably afford an upscale home or a property in a more desirable location — whether it be closer to family or in a luxury housing development with additional amenities. Very few are reaping the benefits, but they keep on coming Reverse purchase financing can help older homebuyers improve their financial flexibility when purchasing a new home and help real estate professionals expand their business within the fast-growing segment of the market. Yet despite this, it remains a niche product that is largely misunderstood or maligned, and quite frankly, unknown to the general public. Consumers who are introduced to the HECM for Purchase loan option are often skeptical at best, with many thinking it’s too good to be true. But the fact is, most people simply don’t know that a new home can be purchased with a reverse mortgage. And after years of advertisements and TV commercials promoting the benefits of better-known reverse mortgage loan uses like continuing to live in your current home while tapping your home equity, 4 who could blame them? According to the Federal Housing Administration (FHA), there were only 2,063 HECM for Purchase loans endorsed in 2022 — that’s less than 1/10th of 1% of homes sold last year. 5 But even as professionals and consumers continue to leave the benefits of reverse purchase financing on the table when transacting, advancements to the now 15-year-old program continue. Recently, Interested Party Contributions (or seller concessions) have been allowed with HECM for Purchase loans. This is a huge boon for the program as seller concessions have not been allowed within the FHA-insured program since its inception. With this latest enhancement, homebuyers aged 62+ can participate in seller concessions for up to 6% of the sales price toward borrower origination fees, other closing costs, prepaid items, and discount points. The 6% limit also includes payment of the Up-Front Mortgage Insurance Premium (UFMIP). “The lack of seller concessions may have been one of the biggest reasons that reverse purchase financing has not become more mainstream and widely promoted to and by the Baby Boomer generation,” said Rob Cooper, National Purchase and Builders Sales Leader for Longbridge Financial . “We in the industry are very hopeful that this will be an eye-opener, especially for real estate agents and builders to start recommending this product to clients more regularly.” The times they are a-changin’ The real estate industry has flourished over recent years due to record-high home appreciation, lower interest rates and motivated clients — but as they say, nothing lasts forever. In fact, a veritable upheaval is headed for the housing market already. According to financial analysts, a “Silver Tsunami” is headed our way, beginning in 2024, as millions of homeowners aged 50 and older make the move to downsize as they inch closer to retirement. 6 “The truth is the real estate industry hasn’t really needed to learn about this financing option over the past decade. We have experienced one of the longest ‘seller’s markets’ in our country’s history, so there wasn’t an immediate need for real estate professionals to educate themselves on financing tools beyond traditional mortgages or all-cash transactions,” Cooper said. “They have been able to reach sales goals with relative ease for over a decade. But economic forecasts and housing market predictions suggest that businesses need to be prepared for another shake-up in the near future. And reverse purchase financing may finally find its rightful place within these industries,” he continued. The bottom line The reverse mortgage (HECM) for purchase program was designed to help older Americans buy a more suitable home in retirement, while still conserving cash and assets for future expenses. And as an added bonus, the program can help real estate professionals turn more shoppers into buyers and close the gap on aging fence-sitters who are hesitant to begin the home buying process all over again in retirement, all while the U.S. stares down the barrel of a considerable economic downturn. It begs the question, “When will more real estate agents and builders begin recommending reverse purchase financing to more eligible American seniors as a viable, strategic funding option to buy the home of their dreams in retirement?” The reverse industry has been working hard for years to educate real estate agents, builders and loan officers on the advantages of reverse purchase financing, and Longbridge Financial, LLC is making strides in expanding educational efforts. 

Local Advocacy: Advocate for small businesses by supporting policies that benefit them, such as lower taxes or zoning laws that allow small businesses to thrive. Volunteer or Participate: Get involved in local initiatives such as volunteering, community clean-ups, or fundraisers that small businesses might be involved with or organizing. 6. Promote Local Business Online Social Media Sharing: Share small businesses’ posts on your social media accounts to help them reach more people. A post or shoutout can go a long way in raising awareness. Create Online Reviews and Blogs: Write blog posts or create online content that showcases local businesses and their unique offerings. 7. Offer Financial or Operational Support Funding Assistance: Help connect small businesses with resources for funding, whether through grants, small business loans, or crowdfunding platforms. Help with Expansion: If you’re in a position to assist, help them expand by connecting them with potential investors, strategic partners, or other local entrepreneurs. 8. Join or Start a Business Network Local Business Associations: Many communities have local business associations. Join them or help start one to bring together small business owners for networking, collaboration, and support. Monthly Meetups: Organize informal meetups where business owners can exchange advice, discuss challenges, and share resources. 9. Mentorship Become a Mentor: If you’ve experienced success in your own business or career, offer mentorship to budding small business owners, guiding them through the challenges of starting and growing a business. Offer Workshops: Host free or affordable workshops to teach business skills like budgeting, marketing, and customer service.  10. Be a Consistent Customer Loyalty Programs: Encourage loyalty by consistently returning to the same small businesses. Some businesses offer rewards or discounts for repeat customers. Word-of-Mouth: Small businesses thrive on repeat business and referrals. Stay engaged and loyal to your local businesses, and they will likely offer the same in return. By actively engaging with and supporting small businesses in your community, you help build a stronger, more resilient local economy. It’s a mutually beneficial relationship that leads to growth and prosperity for everyone involved. tune in and learn at https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329