When someone tells you that they are downsizing and moving into a tiny apartment, the first thought that comes to your mind is what might be the reason? It doesn’t necessarily have to be a bad one, but a rather surprising move on someone’s part.
Normally, people would think of moving or relocating to a bigger house and apartment. But there are a number of benefits of moving into a tiny house, if you have a minimalistic living style and are not too worried or fussed about the size of the room, type of flooring, carpeting and others.
Tiny houses come in a number of shapes and sizes for that matter, they can be mobile homes or trailer homes which can be just hooked to the back of your van and towed. Tiny house can be prefabricated or prefab living spaces which are cheap and can be assembled in a very short span of time. Put a tiny house on wheels and you can tour the country.
Here are some of the benefits of living in a tiny house.
For a cheap, yet comfortable minimalistic living, tiny houses and mobile homes are the trending rage. Relocating for a new job or project elsewhere, worry not! Just hook up your tiny house to the back of the trailer and drive down to start another exciting adventure.
There are a number of customizable design options available with tiny houses, you can design and modify it any way you want. Plus, the cost and time needed to build a tiny house is very less compared to what you might end up spending, even for a small apartment in a city.
Tiny houses are easy to clean and maintain, since the total surface area is no more than a couple of hundred square feet or even less. Even with a number of customizable options, tiny houses are easy to maintain since there is only so much customization you can do at once.
Rig up a couple of solar panels and say goodbye to heavy electric bills. Not only are tiny houses ecofriendly, they will help you cut back on what you might generally spend for utilities and other necessities in a regular sized apartment.
The more modern versions of tiny houses are the expensive variants of your standard RV’s or recreational vehicles which are nothing but homes on the go. They are a bit on the higher range when it comes to price, but also provide the requisite comforts for the price tag.
A reverse mortgage is a type of loan that allows homeowners to receive payments on their house as opposed to them making payments to the lender. At first glance, this option seems too good to be true. But, before committing to it, there are some nitty-gritty details that people must consider when opting for this type of financing. So, here is some information regarding the pros and cons to consider when getting a reverse mortgage.
Advantages
Disadvantages
A reverse mortgage is a loan that allows individuals older than 62 to improve their financial well-being. They can convert part of their home equity into lump sum cash, fixed monthly payments, or line of credit, according to their preference. The money can be used to pay for medical bills, in emergencies, or to pay off a mortgage. Here’s what you should know about reverse mortgages in case you’re looking for one.
How much can you borrow?
For reverse mortgages, the loan amount can’t exceed the value of the property against which it is borrowed. Federal regulations require lenders to ensure that the loan amount doesn’t exceed the value of the house by structuring the transactions accordingly. Additionally, these regulations state that the owner/borrower is not liable to pay off the balance amount in case it exceeds the property value.
How are reverse mortgages paid for?
A reverse mortgage is payable when the borrower sells the house, relocates permanently, or dies. Unlike forward mortgages, reverse mortgages don’t need the borrower to make any monthly payments. They are only liable to pay interest on the money received, which is rolled back into the loan balance. While the owner gets to keep the title to the home, their home equity reduces over the loan tenure.
Who can take a reverse mortgage?
This type of loan is ideal for seniors and retirees whose net worth comes mostly from the value of their home. Seniors who don’t qualify for a home equity loan or can’t refinance due to limited cash flow or poor credit can opt for reverse mortgages. Home Equity Conversion Mortgage (HECM) for purchase is a reverse mortgage that allows seniors to buy another property. That said, it is complex, and you should study the risk factors before getting one.
What are the risks associated with reverse mortgages?
Reverse mortgage scams are not unheard of. Unreputable vendors could offer to help seniors secure reverse mortgages by undertaking house repairs. They don’t provide quality results and get away with the homeowner’s money instead. For spouses living together in a home with only one spouse named as a borrower on a reverse mortgage, the other spouse can lose the home if the borrowing spouse dies first. Besides, reverse mortgage lenders charge fees and closing costs and may also charge mortgage insurance premiums for federally-insured HECMs.