MK Open Mic

Archive for July, 2010

Deferred-payment loans are made to a homeowner for a specific purpose, such as modernizing, repairing or weatherizing the house. They usually carry low interest rates and repayment is not due until the owner dies or the house is sold. A number of variations on deferred payment loans have been described that do not offer cash hut charge off certain expenses as a lien against the property.
Home-equity conversion plans have a great deal of potential for benefiting older homeowners. On the other hand, they are highly complex and contain potential hazards. Because they are both new and complicated, they are not thoroughly understood by many financial, legal and real estate professionals.

Many financial analysts have pointed out that the major resource of older homeowners is their home equity. Traditionally, people with fixed incomes were advised to put their equity to work by selling their homes and investing the proceeds. Recently, some innovative ideas for unlocking this source of money without giving up your home have been tried out experimentally in a few localities. These plans are known in the field as home-equity conversion (HEC) plans.
Three different types of HEC plans have evolved from the fundamental idea that equity, converted into cash, can boost buying power and improve quality of life for many older people. The three variations are: reverse mortgage plans, sale-leaseback plans, and special deferred payment loans to upgrade or modify homes.