Welcome Home with Monique

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Good morning. This is Monique Buchanan, the host of the welcome home with Monique show. And on this show, I talk all things real estate. Listen, I want to thank you for tuning in. Well, hello, Las Vegas. Thank you so much for listening to the Welcome Home Show. I am your host, Monique Buchanan. Listen, guys, I want to give a huge shout out to Pamela goings brown. You guys remember I had her on the show. She was running for North Las Vegas mayor. And guess what guys? She is now the first black woman, Mayor of North Las Vegas. I am so happy for her. Congratulations, Pamela You totally deserve it. Just a great woman I was there with her when she found out and I tell you what, I don't know who was more excited her husband or her. They are a beautiful couple. I'm telling you. They're you know, believers. And I'm just so happy for her. And you know, God, God will open any door if you just have that mustard seed of faith. So congratulations, Pam. I'm so excited to have you as a city of North Las Vegas mayor. Okay, guys, let's jump on into the show. I've got a really good one for you today. So I don't know how many of you guys remember when I said my mother passed away in February. God rest her soul. I'm so now I have my father with me. He lives with me. And he owns a house outright in Texas. Okay, right now we've got family members living in there. So therefore, we're obviously not collecting that much rent. You know, but trying to help out my nephew. So he's staying in the property. Long story short, I started talking to my dad about a reverse mortgage because he wants to supplement his income. Right now he's on a fixed income. And yes, he did give me permission to speak, speak on his business. Because he's very much like me, if it's gonna be a blessing to others, then, you know, he doesn't mind. So he's on a fixed income. Like I said, we're not charging what we probably should be charging for the property because it's his grandson. So with that being said, he, you know, he needs a couple of hours, you know? So I started talking to my lender, specialist about a reverse mortgage, because I don't know, I've never really quite understood how it works. I've heard some negative things I've heard, you know, crazy stuff. So I want to get to the bottom of it. Because I know that if my dad is in this situation, you know, on a fixed income, you know, owns a house that he's sitting on a lot of equity, but he can't really access the equity, but he could sure use the equity. So I want to find out what exactly is a reverse mortgage? How does it work? Right. So one thing that I found out is that there's a very common myth that the bank is going to own the property. Let me tell you something about my dad. He loves me to pieces behind me what I asked him to put me on that on that title. Daddy does want he does not want anybody owning his house. But yeah, okay. So anyways, with that being said, if he would have thought that that was not going to work, and just so you know, I did look into it, the bank does not own the property that is a myth. It is a lien, just like when you have got your initial mortgage, it's a lien, they do not own the property. So let's just go over a couple of the, you know, the basics, I should say, first of all, you cannot get a reverse mortgage period, unless you're at least 62 years old. My dad is 73. Okay, you have to have at least around 50% equity in your home. Why? Because equity is what's going to be paying your the money that you take out. Now I'm jumping ahead of myself, let me let me stick with the the, just the the gist of it has to be your primary residence. Okay. So as long as you're living in the home, and most of us, you know, most of the might like my father, he lived in at home for years. So, you know, that's, that's no problem, but now he's living with me. So that's why the reverse mortgage will not work for him because he is living with me here in Vegas. But if he was still back home in Texas, then yes, this would work for him. Primary residence. Okay. He has over 50% in equity. He actually owns a home outright. Okay. My dad is 73 So he's, he's over 62 years old. Now how does that work? Because, you know, when my dad dies, he wanted to leave that property. For me and my my family, my sisters and brothers now, we all own homes already. So he wants to at least leave you know, maybe just a couple of dollars or something for the grandkids you know, because none of us are really interested in moving back to Texas to that to the home. So he said, Well, if none of you guys want to move in it, I want to be able to at least, you know, have you buy sell it, and then you know, walk away with something for my my grandchildren. So okay, well, let's look into this dad. So the way it works is this, okay? You can take out a line of credit, all right, because a lot of us right now don't want to, we don't want to tap into our tax, you know, like our portfolio because it's a down market. So you know, it's not a really good time to tap into that. So a lot of people will strategize this, and what they'll do is they'll do a reverse mortgage, instead of tapping into a down market, you know what I mean? And then maybe when the market goes up, then they can go ahead and flip flop, do it that way. Because also, you know, when you tap into the market, that's taxable. Reverse Mortgage is not taxable. So that's one thing, I just had a side note on that. But like I said, it will supplement your income. Now the way it works is whatever money you take out, you're going to obviously owe that back. Right? So and it's going to it's going to accrue a crew, I can never say that. Fees are gonna have maintenance fees, those are like 40 $50 a month. Okay, you're gonna have origination fee, just like when you get any mortgage, you know, you have closing costs? Well, it's very similar. So there are upfront costs, right? You're gonna also have to put what's called mortgage insurance premium, which unless you put 20%, down, when you bought the house, you already have that you're already paying that on your mortgage. So basically, that's just insurance for the loan. So let's pretend that you take out, I don't know, let's say your house is worth 500,000. Okay? And you take out 250,000 of that 500,000. Okay, because you want to either live off of it, whatever you want to do with it. Okay. So now when you go to sell the home, let's pretend that the home does not appreciate at all let's say that it's doomsday and all these, you know, rumors that are flying around right now, it actually happens. Okay, there's a huge crash. Now you guys know that? I don't think that's going to happen. But let's pretend that God forbid, does okay. Now the home did not gain any equity, it actually lost equity. Now, what Monique? You know, how do I pay back that 250 that I owe? Well, remember, you got that mortgage insurance premium? That's going to take care of it for you. All right. So even if God forbid, it's doomsday you're taking care of because you're already paying mortgage insurance premium on it. Alrighty, so that's getting access in your fees, you're paying that. So I hope I'm not confusing you guys. And by the way, I am no specialist. Full disclaimer, if you guys are interested in this, I will get you with somebody, you know, my financial, reverse mortgage specialists, that's who I will get you with, by the way, they do not just allow you to just out the gate, get one of these loans, they want to make sure that you know exactly how it works. Because it is a government loan it is FHA is a government loan. So they want to make sure you understand how it works completely. And he didn't just listen to Monix. So that you have to literally go through counseling first, so that you are in the know completely how it works. And then you can move forward, if you so choose to go ahead and do the reverse mortgage, which has been a blessing to many people. So I hope I didn't get you know, sidetracked but let's just do this. Let's say that you own a home is worth 500,000. Okay, you take out 200,000 All right. In two years, you decide to sell the home because by the way, you don't have to, you know, pass away for it to work. You can sell early, there's no pre penalty payments on it. So you can sell early if you so choose.

Unknown Speaker 8:45
And so if you decide to sell, let's pretend that you owe 240. Now, remember you your home was worth 500,000. Now you owe 240,000 Because it's been like two years and that's with all the fees, the mortgage insurance premium, all those fees, okay, it's now 240 You decide to sell the property, this is what will happen. You'll sell it let's pretend that it did not make any, you know, any appreciation, no equity, it didn't go up at all your home just stayed right at 500 which is very unlikely, but let's just pretend that it did. Okay, so you'll owe the 240 Your proceeds, you will still walk away with 260,000. Okay, because you're paying off your balance of 240 and those proceeds will go to you. So the same thing. The way that you pay this off is that you'll sell it or when you pass away, your heirs will sell it, okay? And they will get to keep whatever is left off of what you owe from what you took out. Okay? So it can be they can walk away with the proceeds as well. So after they pay off the loan balance, they will also walk away with the proceeds. Okay. I hope I'm not like you know, really confusing you guys. This is Monique Buchanan. I am going over a little bit about the reverse mortgage. I'm hoping that I'm not confusing you even more but this is what Tony Buchanan, welcome home show, you can always reach me at 702984 3700 702-984-3700. And if you're interested in the reverse mortgage or you want somebody that is actually qualified to explain this to you, you can text reverse to 702-984-3700. My website is welcome home with monique.com. If you're interested in any of the grant programs, you can jump on my new website. Welcome home grants.com. Okay, so let's jump back into it. So I think I got a little bit, you know, beside myself, I should say, let's just go over the basics. So once again, 62 years old or older, you must live in the house, it must be your primary residence, you have to live in there at least six months out the year, okay. Now, if you pass away, you have to pay off the loan, or your heirs will have to pay off the balance. Or you can sell it early, you don't have to wait it all out, you can sell it early with no prepayment penalty, and pay off the balance as well, you will walk away with whatever proceeds are left, like I gave the example that if you owe 240,000, because you took out a $200,000 line of credit. So you tapped into that equity that you're sitting on right now, let's say you're sitting on $500,000 with equity in your home, you tapped into 200,000 of it, because you needed it for whatever reason. You want it to just live off of it, you know, or whatever your reason is, you owe 240 That will I give it two years, I pretended like you decided to sell your home in two years, and you owe 240. Well, guess what, you're gonna still walk away with $260,000 with making zero payments for those two years. That's it, guys, you make no payments. Well, Monique, how can I make no payments? Well, here you're gonna pay, but you're gonna pay at the end when you sell. All right. So you're not paying up front, like with a regular mortgage, where we pay monthly, you're just gonna pay back what you owe, at the end, when you decide to sell or god forbid you pass away, then your balance will come due. And you will go ahead and pay that off. Now Monique, what if I don't have any money left to pay it off? What if there's, you know, like I said, what, there's a big crash and I lose all my equity. Well, remember, mortgage insurance premium is already put on there so that insurance will cover whatever you don't have. And you're still good. But once again, I am not a qualified reverse mortgage person. So what I'm going to do is if you're interested, and you want more information on this more detailed information, I will get you with a reverse mortgage specialist and they will actually if you're deciding to go forward, he will actually get you with a step above that a HUD counselor, okay, that's going to really go into detail with you, and ensure that you understand exactly how everything works. Now, let me tell you this, although you're not going to have any payments, you still have to keep up your HOA, your insurance and your taxes, you guys now that is the one way and hear me good. That is the one way that you can be foreclosed on. You're gonna be living with no mortgage. Okay, that's gonna be a huge chunk off of your back, right? But you still have to pay your taxes on the property. You still have to pay the HOA. All right, you still have to pay, you know the taxes, Hoa? And what is it the insurance and your homeowners insurance, you got to keep that stuff up still. So you will still have something to pay, okay, you're just not going to have that big mortgage payment? Or you know, if you already have one, so to just free up that money now, why do some people go ahead and use these things? Well, there's various reasons you know why you would want to, to use a reverse mortgage. Alright, so you might want to access the equity that you're sitting on maybe you're like my father on a fixed income, you need to tap into you know that money. You know, you need to your kids are doing okay, they're gonna be alright. Well, guess what? You've got some vacations you'd like to take. You know, you've got that RV you want to buy you what you maybe want to buy another home. Okay, you can also use it to buy another home. Maybe the home you're living in now is too big. You can actually take that money and buy another home. Let me give you a story that my lender just told me that he just did. In fact, the one that I'll refer you to the young lady, she sold her home in California. She came over here to Vegas, she was going to buy a house outright. I believe she sold the home and walked away with around 600,000. Well, he told her about the reverse mortgage. She went to the HUD counselors and got a very good understanding how it works and decided that it was going to work really well for her. So instead of putting all of her money into this home, she just put $200,000 of it down on the home. Okay. And then she put 400,000 in a interest bearing account okay, you Very smart. So now she has no mortgage payments. All right, she's making money off her interest bearing account from that 400,000. And she's living her best life, you guys. All right. So that's amazing, right? So she's able to hold on to that 400,000, God forbid she needs it. But she's also just having to pay the taxes HOA and insurance on her new home here in Vegas. So there's so many great things that you can do with this. Now listen, if maybe you're you know, I don't know, they're you want to help out a family member or maybe you're thinking about moving to one of those communities, like a 55 and up community or, you know, the assisted living communities, you need to, you know, those those are not, those are not cheap. I just took a listing last week, and the young lady was so sweet. She's actually the god daughter, to the seller, the seller is living in assisted living in California, guess how much it's costing her $20,000 a month, is how much this assisted living is costing my seller in California. So she's selling her vacation home out here in Vegas, I'm gonna sell it for her. And she's probably going to walk away with you know, close to 300,000. But it's going to you know, that money is going to fly through quickly. Because $20,000 a month is not going to last long. You know what I mean? So this is something that she could also do. So I did actually suggest this to her, she's going to look into it as well. But anyways, you guys, there's multiple reasons why you may want to go ahead and take a line of credit out on your equity, a reverse mortgage line of credit. The difference between that and a traditional one is this you guys a traditional line of credit on your home, it can be frozen, it can be reduced, it can even be canceled. If the you know, lender feels like the home's value is going to drop quickly, then they can cancel your your traditional line of credit. Okay?

Unknown Speaker 17:01
Okay, so here are some reasons why you may want to go ahead and consider a reverse mortgage. You know, if you're considering retiring, or maybe you are retired, you can get rid of that huge monthly mortgage payment. All right, you can also grab a line of credit on the equity that you're sitting on, maybe you need to access it to supplement your income. You know, a lot of you know a lot of my, a lot of my listeners are on fixed incomes, my father's on his fixed income. And so now you could tap into that money that's doing absolutely nothing for you right now. And go ahead and live your best life off of that money that you have secured, you know, in your home. So maybe you need long term care needs, you know, those are coming. So you want to get that money out so that you'll be able to take care of those needs. Like I said, I have a client, that's right now she's paying $20,000 a month, for her long term, long term care needs are getting say, you guys, but that's crazy, right? But that's how much it cost. Maybe you want to buy a vacation home, maybe you want to use this money to purchase a new home and maybe downsize or, or maybe upsize I don't know, you know, so maybe you want to buy in a retirement community, they they charge you a buy in fee. So that's pretty pricey. So you can actually access you know, this money that you're sitting on your equity in your home, to go ahead and pay that that buy in fee for that new retirement community that you want to move to. All right, but the main use is normally to supplement fixed income. All right, so it's tax free. And you could supplement your fixed income. Like I said, it could tap into your, you know, your portfolio right now, we're in a down market. So your financial advisor more than likely is going to tell you that's not a good idea right now, right? So you don't have to sell at a loss right now. So you can tap into your reverse mortgage instead, if that makes any sense to you guys. All right. So real quick, let's talk about or let's do like an example. So let's say that you want to do a line of credit through your reverse mortgage, they do do that. Alrighty. So if you have, you know, $500,000 in equity, you can pull up, pull up, pull out, around 275,000 All right, of that $500,000 worth of equity. So you will be able to pull out the money. Okay, it's gonna it's gonna you know, occur interest, but you don't have to pay it back until your future sale. All right, and like I said, there's no prepayment penalty, you guys. So this will be a blessing to some to some, maybe it's just not gonna work like my my father, it's not gonna work for my father, because he lives with me. You have to be you have to live in your home. So that won't work for him. But maybe it'll you know, work for somebody else that's hearing this or somebody that they know. Let's talk about the different ways that you can take it you can take the entire money upfront. So let's say that you're getting that to 75 you can just get a huge chunk of 200 75,000 upfront, you can take payments over like monthly, you could say, hey, I want to have that broken up for the rest of my life, I want to have you pay me I don't know, you know, an extra 3000 a month, you know what I mean? or 2000 a month, whatever you decide. You can also do a line of credit where you can just draw it out as you need. So there's different ways to do it. Okay. Now let's talk about just the basics of it. Again, like I said, you have to have at least 50% equity, you need to be 62 years or older, it has to be your primary residence, then it's going to come due, whenever you you sell your home, if you pass away, your your heirs can sell it, they'll pay back whatever is owed. All right, and then they'll walk away with that when the proceeds Does that make sense? I hope I didn't mess this up too bad for you guys. Because let me tell you, you know, it's, there's a lot to it. But I do want you to know this, like I said, you have it, it is required, it's a must that you actually get certified by a reverse mortgage counselor provided by HUD. Okay, so this is somebody that has no interest, they're not going to make money off of counseling you. So they're going to tell you exactly how it works, they want to make sure that you understand it kind of like when I do my, or when we have our first time homebuyer, you know, certifications, you know, in order to get the downpayment assistance, they want you to understand how it works, so that you're in the know, you know, we want you to understand completely. That way, nothing, you know, jumps out at you that you understand, that's what I pride myself on you guys. I pride myself on my clients understanding and knowing you know, what their options are, and then they make that decision for themselves. Okay, so I'm just putting it out there, because I know there's somebody that's listening, that maybe this could be a blessing to, maybe they need that extra money monthly, maybe their kids all own homes, so they don't necessarily need to leave the home for their kids, you know, or maybe they want to buy a new home. And this will give them the money to go ahead and move into that new home. And I can assist with that. My number is 702984 3700. But no all jokes aside, guys. I want you guys to be in the No, no, I always say that. And I am here to assist. So if this interests you, or you know, somebody that maybe could be blessed by a reverse mortgage, but they never quite understood what it was, or how it works. Or maybe even after hearing me they still don't listen, my number is 702984 3700 I can get you with somebody that is well versed in the reverse mortgages. And he will actually even get you with a counselor if you decide to go for and hey, maybe it'll be a blessing for you. Okay, now, let me share this story with you, my lender. Now this is another one he told me this. His mother did a reverse mortgage on the home that she bought out in Oakland. She took out I think it was $100,000 and then she sold it and still walked away. I think it was 25 years. He said she made no payments. He said Monique I'm a believer in the reverse mortgage. I've seen it firsthand with my mother as a well I'm gonna go ahead and talk about on the show, didn't he? So I'm telling you if it works, it bless my mother, you know 25 years she had no payments and still walked away with I believe he said over $200,000 When she sold and paid back her reverse mortgage loan. I said wow, I've got to talk about this on the show because that can really be a blessing to some of my listeners or maybe their family and friends. So there you go you guys this is Monique Buchanan once again with the welcome home with Monique show. Thank you for tuning in. Now we're gonna pivot a little bit I came across a another downpayment assistance program, guys, let me just address this first. I get this question all the time. Monique, do you think it's a good time to buy? I'm gonna give it to you straight just like I like I tell you guys, I always talk to you guys like my family. You know, I don't I don't come from a place of money. Like just, you know, trying to make money trying to make money trying to make money. Obviously, I need to feed my kids. But, you know, you guys know that I'm a believer and I know that My help comes from the Lord. So I'm not motivated by just trying to sell you something. I hope that you believe that because it's true. But I'm honestly going to give you my honest opinion. This is why I think is an amazing time to buy right now. Ever since I've had my license. Okay, I have never seen a buyer's market like this never. I'm not here in Vegas because we just you know, it's been a hot seller's market for so long. So right now I am scoring some deals that I've never been able to score before for my clients. Like I've said before, rates obviously have went up and that obviously made a bunch of buyers fall out the market right. So a lot of them are in a position to buy but they're waiting for you know all the rumors. Oh, the rates are gonna go down next year. Okay, well guess what guys for over 10 years. years from the 80s. And the 90s, the rates were over 10%. So it's not uncommon for us to be at 10%. So here's my thing. By now, while I can get you a killer deal, I'm getting 10 $15,000 off the list price, I'm going into escrow. Actually, today, my buyer, I got him not only closing costs, I got him 4%. So what are we going to do with that money, we're going to take that extra money and buy down his rate. So the mice, the sellers, they're paying his closing costs, and the and its entirety. If I said that, right. It's they're paying his home warranty of like, $700 Basically, they're going to it and I got him $10,000 off of his off the list price, you guys that's like over 20 something 1000 off from the sellers. So what's gonna happen when the rates if they do drop next year, you guys are all waiting for that, right? It's gonna be a frenzy again, so don't wait, go ahead. You know, let me get you a house, I get you a house. Now if the rates do drop next year, guess what, you just scored a killer deal, I was able to get all this money off for you. And you got a lower rate, you only had to pay a couple months, right? Of the higher rate, boom, there you go. But let's say that they do what I think they're going to do go up to 10% next year, guess what you scored again, because I got you a killer deal. And you got today's rate of 7% instead of 10. So that is my honest to god opinion, you know, opinion on if it's a great time to buy. I'm screaming it from the rooftops because I truly believe, and I know it because I'm getting these amazing deals that I've never been able to score before. So let me just go over this real quick. And especially if you use a downpayment assistance program, one of my down payment system programs, and I get the sellers closing costs, pay, you're coming out of your pocket with less than $1,000 for a home. That's amazing, you guys. All right, real quick, got another DPA for you. That's what we call downpayment assistance,

Unknown Speaker 26:56
you have to have a 620 credit score, you can only make $80,000 income. All right, I have to get you in the home and closed by the end of this year, or you cannot move forward. So you can't sit on your hands with this when you guys, you only have to put down 2% only 2%. All right, so if it's a $400,000 house, you're putting down 8000. That's it. Okay. So this is a great downpayment assistance program. And, you know, I don't know how long it's gonna last. Like I said, actually, they told me that I have to have it done and find you a property. A primary residence, by the way can't be your second property. You can buy a vacation home. All right, but I have to get you in there. All right. By the end of this year, that particular grant has an interest rate at 4.99. Yes, although rates are 7% today that downpayment assistant grant will give you a 4.99 interest rate. So that's a great deal, right? And of course, I still have all those other downpayment assistance as well, where you put zero down, you can check those out on my website. www welcome home. grants.com. Once again, you guys this is Monique Buchanan. I am your local Las Vegas realtor. And I would like to also close this show out by inviting you to my church. I love my church. It took me 10 years to find it moved here from Seattle to have a long time trying to find it my church. So anyways, living word church, you guys, please come join me to church tomorrow. Church service starts at 1030 Bible studies on Tuesday. So if you can't make it tomorrow, Bible study starts at 630 we have free dinner, and then seven o'clock starts the actual Bible study. The address is 976 Hassel Avenue, Living Word Church 976 Hassel Avenue. I'm giving all glory to God and I pray you guys will be blessed. Have a wonderful weekend. Thank you for listening. This is Monique Buchanan. My license number is S 1788 46. And I am part of EXP Realty Tune in next week.

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