Lost Your Home? Cash Out Structured Settlements to Buy a New Home

Whether you are looking to downsize, upsize, change locations or replace a home that you have lost, there are a lot of things to consider in today’s housing market. For some people, structured settlement annuities can provide a means for entering into a new housing situation. But wherever your housing funds may come from, you need to understand the value and costs associated with home ownership and recognize whether it is the best choice for you. This article will give you some basic information about selling structured settlement annuities, buying a new home and how the two can work together.

The Emotional Value of Home Ownership

Owning a home comes with many positives, not the least of which is the emotional value that one can feel from owning their own home. Certainly home ownership has become synonymous with “the American Dream”, with most American natives and transplants seeking to own their personal piece of property to raise a family within.

Owning a home provides a sense of belonging and membership to a community. It also brings with it respect from others and a deeper sense of family. Certainly for those who have structured settlement annuities, using the regular payment to put down money on a house or even to pay an existing mortgage down ahead of time, can better prepare the home owner for an easy, mortgage free retirement.

The Security of Home Ownership

Owning a home can be a very valuable part of retirement, affording a high level of financial security to anyone. Once you own a home you know that you will always have a place to live – as long as you keep your taxes up to date, of course. Selling your structured settlement annuities can be a great way to pay for a home in cash, up front. This can prevent you from paying mortgage interest and mortgage insurance, something which costs some home owners tens of thousands of dollars each year.

If you are hesitant to cash out your entire annuity, that is understandable. Consider an annuity purchase of part of your annuity, allowing you the money to purchase a smaller house, perhaps, yet still providing you with regular income to cover insurance, real estate taxes and home repairs.

The Costs of Homeownership

Speaking of home repairs, when considering purchasing a new house with your structured settlement annuity, whether you plan to cash in for a lump sum or simply use your annuity to make your mortgage payments, it is important that you consider the full cost of home ownership, especially if you are a first time home buyer.

Certainly the primary cost in any mortgage is the mortgage interest. For example, if you take out a 30 year loan on a $100,000 home, your interest could be around $500 a month, depending on your rate. The next biggest expenses would be your property taxes and homeowners insurance, which can vary dramatically depending on your location, but probably will be around $300-$400 a month together. Once you add in your payment on the actual loan principal as well as mortgage insurance if you do not have at least a 20% down payment, the costs skyrocket. And this does not even include maintenance. On an older home you can pay up to 10% of the home’s value every year in simply maintaining it.

If you have structured settlement annuities to work with these costs can be made easier. Depending upon the amount of your annuity you may want to cash out part of it to pay at least a 20% down payment on the new home. This will cost you some money, but it will also save you on mortgage insurance. Also, by only cashing in part of your annuity money you can still ensure that you get some money each month to help pay for these other home related expenses.

Move Your World Today

If you are thinking about purchasing a new home do your research well, talking to all different types of professionals from real estate agents to mortgage brokers. Being educated is your number one tool for making a sound decision. If you are considering using your structured settlement annuities to pay for your new home call us. We can walk you through your options today.

 

Tags: Life annuity, Mortgage loan, Owner-occupier, structured settlement

Category: Housing