Posts Tagged ‘payments’

“‘If I were given $1 million’
According to the respondents, here are some of the things people would do if they suddenly received an influx of cash…

  • 54% of respondents would spend it

According to Charles Schwab, Americans are paying attention to their friends’ personal-finance choices. Sixty percent of people said they’ve wondered how others on social media were able to afford things like expensive trips… And out of a variety of factors (including family, friends, and co-workers), social media was reported to have the worst influence on money management…

A whopping 59% said they live paycheck to paycheck, and 44% carry a credit-card balance or struggle to keep up with payments, according to Charles Schwab.” -The Crux

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“The U.S. 10-year bond yield rose to a seven-year high of 3.24% – nearly 2% above its bottom in July 2016.

This 2% increase, imposed on $68 trillion of debt, is equal to an extra $1.3 trillion in interest charges….

To look at it another way, the typical working person who works an average of 33 hours per week earns $26 an hour. His percentage of the total debt is about $500,000.

At today’s interest rate, he will have to work 558 hours – or three and a half weeks (not including taxes) – just to keep up with the interest payments. Clearly, this is impossible…” -Bill Bonner

“Thanks to Google, Facebook, and all the other data-gathering operations being run out of Silicon Valley, children born in the last decade will have no concept of privacy.

These companies will record, monitor, and track every single thing they do online. The word ‘privacy’ will be a meaningless term to them….

These Silicon Valley giants gather mindboggling amounts of highly personal data on their 4 billion combined users.

They then hawk it to advertisers… and even pass it on to the National Security Agency (NSA), via court-approved electronic eavesdropping programs….

Every traditional digital financial transaction you’ve ever made – credit card payments, bank transfers, even ATM withdrawals – has been tracked, stored, and monitored.”

-Chris Lowe

“A recent survey showed that more than 40% of Baby Boomers (those born between 1946 and 1964) have less than $100,000 in retirement savings. That means those right at the retirement window won’t be able to maintain the lifestyle they want once they retire. You might think Social Security will help. Think again – the average monthly Social Security check in 2018 is just $1,404….

Reverse Mortgage Recap:

In a typical mortgage, you obtain a loan for the purchased real estate and then slowly, over the life of the loan, pay it back to the bank. The reverse mortgage works exactly the opposite… We get the bank to pay us while our health is good, and we don’t have to pay it back until we die or move out of the home.

Once approved, you can receive your loan money in several ways. You can take the money as a lump sum, a stream of payments, a line of credit, or a combination of the three.

Reverse Mortgage Precautions:

Depending on how you receive your reverse mortgage payment or payments, you could risk losing your eligibility for Medicaid.

Maybe you aren’t thinking about Medicaid just yet. After all, Medicare covers a wide range of health services. Here’s the kicker: Medicare only covers short-term care in a skilled nursing facility or rehabilitation care in a nursing facility. Medicare will not cover any long-term care, including care at a nursing home.

That’s where Medicaid comes in. Medicaid is the primary payer for nursing-home care in the U.S.

That means if you take out a reverse mortgage now and suffer a stroke two months later, you might not qualify for Medicaid and will have to pay out-of-pocket for all your nursing-home care.

Taking a lump sum payment or getting monthly payments that you don’t exhaust each month (meaning you’re building up your savings account) triggers something called the spend-down rule.

Basically, you only qualify for Medicaid if you meet the financial requirements. In other words, if you have too much money in your bank account, Medicaid expects you to spend that on your care before you qualify for assistance. You have to “spend down” what you have to reach that point.

And keep in mind, nursing-home care runs up the bill. In 2016, the national average for a shared room in a nursing home was $225 per day. That’s more than $82,000 a year.

The second consideration for taking out a reverse mortgage is the possibility of moving. If you don’t live in your home for at least one year (for instance, if you’re in a long-term care facility) or if you sell the home, the loan would come due. That means paying it back in full….

Also, if the housing market drops or your home loses value for any reason, you might not be able to sell it for the full amount of the loan. In that case, you’d have to make up the difference….”

-Dr. David Eifrig

  • Despite the long bull market, more Americans today have more debt than money in the bank than at any point since 1962, according to Deutsche Bank.
  • American household savings levels are at levels last seen in December 2007… right before the economy slipped into a recession that spurred the global financial crisis.
  • And total U.S. consumer debt – credit cards, auto loans, and student loans – just surged by the most in two years to $3.8 trillion.
  • And government debt is creeping toward a $1 trillion deficit per year. The national debt has topped $20 trillion.

 

If these folks can’t save or make their payments in a strong economy… how will they do it when interest rates go up and the next inevitable recession hits?

The answer is that they won’t.

-Steve Longenecker

Fannie Mae announced that it will offer a HomePath Ready Buyer Program.  They will offer up to 3% toward the purchase price of a home (if they take a home buyer education course).

“That’s right: We’re back to 3% down payments, rebated. And we’re back to the feds (Fannie Mae is a government entity) encouraging people to load themselves down with mortgage debt.  ‘Stimulus’, is what they call it.  ‘A debt trap’ is what it really is.” -Bill Bonner

Fannie Mae is already in receivership with the assistance of the government.  Now, they will be putting even more on their backs with this program.  This low down payment program didn’t end up so well just a few years ago, now it is being reinvented.

Is home ownership “affordable” if someone needs assistance?