Video: Seniors, Don’t Worry About Timeshares You Can’t Afford

MoneyTips

By Eric Olsen, Executive Director, HELPS
Nonprofit Law Firm

I just got off the phone with a senior couple who have a timeshare they can’t afford and don’t use any longer. They had called a company who advertised that they help people get out of timeshares. (I hear such advertisements on the radio and television regularly.) The senior couple had paid this company nearly $3,000. The next payment of $1,000 was scheduled to come out of their account in a few days. I took a deep breath and explained that they didn’t actually need to keep paying for their timeshare, let alone pay someone to help get out of it. The timeshare company couldn’t take anything from them if they simply stopped paying. The law protects their retirement income from collection – including wage garnishments and bank levies from the timeshare company. That includes Social Security, pensions, VA benefits …

Can This New Reverse Mortgage Alternative Help You?

MoneyTips

Reverse mortgages can be a useful tool for seniors attempting to convert the equity in their home into cash for living expenses or other retirement purposes. The loan is usually paid out over time instead of as a lump sum.

There are no repayments as long as the senior taking out the loan continues to live in the home, properly maintains it, and pays all the necessary property taxes and other property-related fees. Once the primary borrower passes away, moves away, or sells the property, the loan must be repaid.

The reverse mortgage loan, along with accrued interest, is repaid with the proceeds of the sale of the home. If any equity remains in the home, the proceeds go to the seller.

In essence, with a reverse mortgage, you are selling the equity in your home back to a lender in increments.

The majority of reverse mortgages are Federal Housing Administratio…

Construction Liens 101

MoneyTips

A construction lien, otherwise known as a mechanic’s lien, is a claim that is made against a property by a contractor, subcontractor, or other professional party involved in a construction project. These liens exist to protect construction professionals from non-payment for materials or services rendered.

If you are withholding payment to a contractor for a construction project of any sort for substandard work or another dispute, the contractor has a right to file a construction lien on your property. Unfortunately, the same principle allows a subcontractor to file a construction lien on your property if the contractor did not pay the subcontractor. You, as the property owner, are still potentially on the hook.

Do not ignore a construction lien filed against your property. In the best case, the lien makes it virtually impossible to sell or refinance your property. If it is …

Will Your HELOC Be Tax-Deductible?

MoneyTips

Homeowners may see less of a tax break this year, thanks to the Tax Cuts and Jobs Act (TCJA). Beginning with homes purchased after December 16, 2017, you can only deduct the interest incurred on $750,000 of mortgage debt on qualifying residences (primary homes and one second residence). Under prior law, the limit was $1 million in mortgage loan debt with an extra $100,000 in home equity debt.

Can you still deduct interest on a home equity loan or a home equity line of credit (HELOC) under the new law? Yes – but only in certain circumstances.

To be deductible, a home equity loan or HELOC must be used to “buy, build, or substantially improve” the home that secures the loan. In addition, the total mortgage debt incurred after the new law took effect – including the home equity debt – must be at or below the cost of the home and below the new mortgage deduction limit ($750,…

Need Down Payment Help? Consider Shared Equity

MoneyTips

You want to buy a home and have the income to support a decent monthly payment – but you can’t save up enough money for a significant down payment. With home prices and interest rates rising, you’re afraid that you’ll be priced out of the market before you can save up a full down payment.

If you qualify for FHA or VA loans, you may be able to secure a loan with far less than the standard 20% down payment required to avoid private mortgage insurance (PMI). However, you’ll have to borrow more money by definition and will end up paying considerably more in interest over the life of the loan.

A few companies are offering a new alternative for down payment assistance – a shared equity mortgage. With a shared equity mortgage, a third-party investor contributes a portion of your down payment in exchange for a share of the proceeds …