Reverse Mortgage Costs Still High ... AARP

By Jerry Smith

In the Fall lenders offering reverse mortgages or HECMs started funding reverse mortgages with two big differences legislated in the Bush housing bill.

The one most people were concerned about was FHA increasing its its national loan limits up to four hundred seventeen thousand dollars. The other, less known change, was a reduction in lender fees.

Here is how it works; the origination fee is two percent of the value of the home up to $200,000. For values above 200k and up to 417k the fee increases by 1%.

To give you a scenario we'll assume the home is worth $350,000. The fee for the initial $200k is $4,000. Add in an extra $1,500 for the value between 200 to 350 and you arrive at a total fee of $5,500.

A 2% across the board origination fee was the order of the day prior to the the new law.

What concerns me is why the lender is getting the proverbial finger pointed at it. I mean how low can the origination fee be before the lender goes bellie up.

Origination fees are how lenders make money. Don't forget you have to pay all your expenses prior to actually going home at the end of the month with any money in your wallet.

Furthermore, traditional mortgage origination fees are no less expensive if you examine them closely.

People see a forward mortgage and say, "Hey, you reverse guys sometimes charge twice that". The reason is forward mortgages build in the difference into the interest rate in what is known as a service release premium.

The reason the origination fee is higher for the reverse is service release premiums are very low.

As a mortgage professional I'm somewhat bewildered at AARP's views toward this subject. I wonder if they are even genuine.

Afterall, they do have a growing senior population to sell insurance to. Do they ask their client insurance companies to take a hit like they mortgage companies?

Of course not. AARP is far too busy making a killing on all those policies sold through their marketing efforts.

AARP is not so pure and they should to sit this one out.

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How does one learn more about the reverse mortgage in Texas? One heads on over to this link. Also, dowload a guide of Texas reverse mortgage goodness filled at this site.

Consolidating Retirement Funds

By Jered Starling

Most people wind up switching companies several times in the course of their lives. Hardly ever does a person stay with 1 employer their entire working life. Many companies offer a 401k plan as part of their benefits package. This leaves many people with multiple 401k funds in their name in their career course.

What should you do with your 401k fund after switching companies? You might look into a 401k rollover to IRA.

Transferring your 401K to an IRA fund comes with several benefits. I would like to talk now about a few of them.

First think about someone that switches jobs and employers 3 times in their life. They would have 3 401k plans to their name from the earlier employers and now a new one from their new company. Having so many accounts is very difficult to follow even for someone financially inclined. The paperwork would be 4 times as much as if you only have 1 account. This usually leads to discouragement and eventually the account holder will take less than the necesarry interest in his/her retirement. What a nightmare!

By rolling your 401k into an IRA fund after each job change, you can consolidate that paperwork and make your retirement much easier to manage. And you can continue to add your 401k plans to a single IRA as often as necessary. That same person that changed jobs 3 times in their career would have now only 1 401k and 1 IRA. That would be worlds easier to handle.

Also, consolidating your accounts into an IRA reduces your risk factor. If you leave the 3 previous 401k plans with the previous companies you run the risk of the companies going under. That would in turn leave your 401k worthless. There is still a small risk when you invest in an IRA with a financial institution, but the risk is much smaller than the alternative.

And the best part of it is that you will put yourself in control of your own future. And who better to handle it that the person that cares most about it?

The 401K offers to match your investment 100%, and you don't see an offer like that from most investment opportunities. So take advantage of it and contribute the maximum that the employer will match. Then put the extra funds into your IRA.

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Learn more about a 401k rollover to ira

Calls And Puts: Opposites Of The Same Coin

By Walter Fox

Despite the simple sounding names, Calls and Puts are a method of trading that allows an investor to sell stock at predetermined levels of price. The trade must occur within a specified time period. There is a preset expiration date to the agreement.

At the time they are drawn, Put and Call give value close to the current market stock rate and usually lasts to a period of numerous months. This means they have expiration.
The variation of the two is that they trade oppositely.

In describing Calls and Puts, we will assume that an investor purchases Puts with the instruction to purchase stock if the value falls to a specified value. Calls, on the other hand, agree to purchase stock if the value of the stock rises to a certain value. These values are specified in the initial agreement. The value of Calls will go up when the value of the stock rises. Puts will gain in value when the value of the stock falls.

Both methods of trading can yield a profit for the investor. The savy investor can anticipate the moves of the market and use Calls and Puts to increase their bank account. The biggest danger is not watching the expiration date of the agreement. These date are set in stone and should one be missed, or purchases not made within the limits of the agreement, an investor risks loosing their investment.

The use of Calls and Puts are not limited to the large investor. The small investor who pays attention to the market and watches the expiration dates of their agreements can increase their profit. The investor is unlikely to make a profit if a Put is purchased on a stock already owned.

On the contrary if you purchase a Put from an un-owned stock and then procure that stock prior you can trade the put. In a practical case: if you purchase a Put at a higher price then the there happens to be a supply drop to a lower price, you are at liberty to trade from the out market, i.e. purchase and round trade with a higher price for a profit.

If anything the profit can be used to counterbalance the debit the investor may have accrued in the stock.
It is imperative to understand the limit each type of preference (Calls and Put) gives when you procure. This helps you to understand why there is rate fluctuation of the stock in the market wavy.

Calls and Puts investing has much to offer the small investor. There are infinite numbers of trades that can occur; it is not necessary to have a large bank account in order to invest in Calls and Puts. As long as the investor is aware of the limits of the technique, Calls and Puts can be a good profit maker.

About the Author:

TheScienceOfTrading.com provides 90 free minutes of videos on option trading systems and provides a complete and detailed option trading course for beginners to experts.