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NiSource Professionals: Learn How to Take Advantage of an Assumable Mortgage

Healthcare Provider Update: NiSource provides employees with a variety of health insurance options including PPO, HMO, and high-deductible plans with HSAs. Dental and vision coverage is available, along with FSAs for healthcare and dependent care. Life insurance equal to twice base pay is company-paid, with options to purchase additional coverage. Disability benefits, accident insurance, and paid sick leave are also included. Retirement benefits feature a 401(k) plan with matching, and employees may receive opt-out credits if they decline coverage 2. NiSource As ACA premiums rise, NiSources employer-sponsored plans and pre-tax savings accounts offer employees a more affordable and stable alternative to marketplace coverage. With insurers requesting double-digit increases and federal subsidies potentially expiring, employer-backed plans like NiSources help shield employees from steep out-of-pocket costs. Click here to learn more

'For NiSource employees within two years of retirement, participating in assumable mortgages can be a smart way to lower their housing costs and protect their finances for the next generation, according to Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'For NiSource retirees and near-retirees, the current housing market is complicated, but assumable mortgages can help people get lower rates for their money, which is a big help in uncertain times,' said Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

1. Pros and cons of assumable mortgages for retirees: Advantages and disadvantages of using an assumable mortgage

2. Properties transfer between generations: How assumable mortgages work to make this happen.

3. Only certain parts of the country are experiencing a challenging economic environment as we enter the year 2023 with nearly double the mortgage rates seen in 2021.

As a result of this shift, home finance costs have increased and have been further increased by homeowners' reluctance to give up low mortgage rates. This has made it difficult to navigate the market and sustainably buy homes, thus sustaining higher home prices. One aspect that is quite relevant within this context is the concept of assumable mortgages. These are agreements in which the interest rate and terms of the seller’s original loan are taken over by the buyer. According to Redfin data, about 85% of the properties available for sale are secured by mortgages at rates below 5%. This is because, as we shall explain in this paper, such participants may stand to gain from the following financial benefits of this approach. It makes it easier for homeowners to move around.

The buyer assumes the mortgage of the vendor, the interest rate, the due balance, and the remaining payment schedule under this arrangement. This can be particularly useful for buyers when interest rates are rising, as they will be able to obtain a lower rate than they would from a new mortgage. However, the purchaser has to meet the lender's qualifications, which are like those of a regular mortgage application. This entails assessing factors such as credit score, debt to income ratio, and others. One notable benefit is that home appraisals are usually not required, which may help to make the process easier and cheaper. While it may sound attractive, assumption mortgages are not problem-free.

Assumption is usually not permitted on most mortgages; the only exceptions include government-insured loans such as FHA, VA, and USDA loans. The Weekly Applications Survey conducted by the Mortgage Bankers Association indicated that, in the past three years, these specific loan types accounted for 18 percent to 26 percent of all residential loan applications. Some potential upsides include lower or no upfront fees and mortgage rates; sellers with better loan terms may also attract more buyers. However, there are downsides, including the possibility of needing a second mortgage and making a larger down payment. This is because most assumable loans do not cover the full purchase price of a property, meaning that further financing or individual funds must be found to make up the difference.

Because of the issues in linking the purchase price of a property to assumable loans, second mortgages and down payments, much consideration should be taken. Other challenges are the high fees and interest rates associated with second mortgages, as well as the tighter qualifications that come with them due to the higher risk taken by the lenders. It is crucial to shop around and compare the products offered by different lenders when dealing with these options. This is the same as applying for new home loans, second mortgages, and assumable loans. It is crucial to take into consideration the rates and fees of the mortgage in order to get the right one that suits the financial plan. It is important to note that not all lenders offer second mortgages, meaning that the search may take longer.

For NiSource workers reaching the age of retirement, those with substantial equity in their homes can use an assumable mortgage to enable children or grandkids to buy a home. According to the National Association of Realtors, intergenerational property transfers are on the rise as families look for ways to help younger members get into the housing market. Making the mortgage on a family home work in such a way can be a good financial decision, so that the family can take advantage of lower interest rates and the property can stay within the family.

This strategy may be particularly relevant during a time of rising mortgage rates and uncertainty in the housing market. In all, though the majority of government-sponsored loans like VA or FHA loans can be assumed, the process involves things like getting a second mortgage and how to handle higher down payments. Such additional costs may not be accessible to all home buyers, particularly those who are buying their first home or require a loan with no or low down payment. Therefore, it is very important to understand the details of these financial products in order to make the right decision concerning the current real estate market.

Using assumable mortgages to navigate the current housing market is like a seasoned sailor using favorable winds to steer clear of the storm. In the same manner as how an experienced sailor harnesses wind speed for a better journey using experience and knowledge, soon-to-be NiSource retirees and homeowners can use assumable mortgages to take advantage of the current low interest rates in a market where rates have almost doubled. Therefore, the use of this strategy can make the real estate investment process more efficient and less costly, just as a sailor steers clear of the high interest rates and the scarcity of homes to stable and calm waters.

Added Fact:

I cannot search the web or get updates in real time so I cannot write a paragraph with some new information related to the topic aimed at the 60 years old target audience from a certain source or with a certain publication date. However, it is important for people approaching the age of retirement, including NiSource workers, to understand that assumable mortgages may have tax implications. Since most people usually concentrate on the interest rates and monthly installments, it is essential to know how this type of mortgage may affect their taxation status. For example, the interest on an assumable mortgage may still be deductible, providing a way to lower taxable income in the retirement years.

Added Analogy:

The current housing market is compared to floating a well-prepared ship in a sea of high tide and strong wind when navigating with an assumable mortgage. In the same manner that a seasoned captain will use a map and proper equipment to steer clear of the storm and find the best path, NiSource professionals who are about to retire can use assumable mortgages as a way of escaping the high rates. This allows them to sail into the safe harbor of lower monthly payments and keep the value of their investment intact, just as a skilled sailor reaches their destination in good time and safely, though the sea may be rough.'

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Sources:

1. Kvilhaug, Suzanne. 'What Are the Benefits of an Assumable Mortgage?' Investopedia , 2023, https://www.investopedia.com/ask/answers/08/benefits-assumable-mortgage.asp?utm_source=chatgpt.com .

2. Norian, Mira. 'Assumable Mortgage: What It Is, How It Works, Types, Pros and Cons.' Investopedia , 2004, https://www.investopedia.com/terms/a/assumablemortgage.asp?utm_source=chatgpt.com .

3. 'Nationwide Employees: Discover the Benefits of Assumable Mortgages in Today's Housing Market.' The Retirement Group , 2023, https://www.theretirementgroup.com/featured-article/5448109/nationwide-professionals-learn-how-to-take-advantage-of-an-assumable-mortgage?utm_source=chatgpt.com .

4. 'What Is an Assumable Mortgage? Major Savings If You Qualify.' Realtor.com , 2023, https://www.realtor.com/advice/finance/assumable-mortgage-good-idea/?utm_source=chatgpt.com .

5. 'What Is an Assumable Mortgage? Do I Have One?' NerdWallet , 2023, https://www.nerdwallet.com/article/mortgages/assumable-mortgage?utm_source=chatgpt.com

As an employee of National Grid, what are the key eligibility criteria for participating in the Pension Plan specifically for Niagara Mohawk Power Corporation employees? How might these criteria impact your personal retirement planning and the benefits you expect to receive upon retirement from National Grid?

Eligibility Criteria for Niagara Mohawk Pension Plan: Employees of Niagara Mohawk Power Corporation who are represented by Local Union 97 of the IBEW and work at least 20 hours per week or accumulate 1,000 hours in a Pension Plan year are eligible. Participation begins automatically on the first day of employment. These criteria directly impact retirement planning by determining when employees begin accruing pension benefits and how much they will receive at retirement(National_Grid_2023_Niag…).

Within the framework of the National Grid Pension Plan, how does the cash balance formula work in calculating retirement benefits, and what implications does this have for employees of Niagara Mohawk Power Corporation when considering their long-term financial outlook?

Cash Balance Formula: The National Grid Pension Plan for Niagara Mohawk employees uses a cash balance formula that provides monthly pay-based credits (starting at 4% and increasing with years of service) and interest credits. These accumulate in a hypothetical account, growing until retirement, allowing employees to track their retirement benefits much like a savings account. This formula impacts financial outlook by providing predictable growth tied to service and pay(National_Grid_2023_Niag…).

For employees at National Grid, what are the specific rights and options available during the pension benefit application process? How do these rights protect the interests of individual employees and ensure they receive fair treatment under the Niagara Mohawk Pension Plan?

Pension Benefit Application Process: National Grid employees must apply for their pension benefits by submitting the required forms at least 90 days before retirement. Spousal consent is required if opting for any form of payment other than the default. This ensures employees understand and select the best payment option for their circumstances, protecting their interests under the Niagara Mohawk Pension Plan(National_Grid_2023_Niag…).

Given the different types of credits that contribute to the pension benefit for employees of National Grid, how are Pay-based Credits and interest credits calculated? What strategies might Niagara Mohawk Power Corporation employees employ to maximize these credits before retirement?

Pay-based and Interest Credits Calculation: Pay-based credits are determined by years of service, starting at 4% of pay and increasing to 8% after 20 years. Interest credits are based on an annual interest rate tied to the Treasury securities and corporate bond rates. Employees can maximize these credits by continuing to work and contributing to their pension balance(National_Grid_2023_Niag…).

How do pension benefits work for Transition Group Employees specifically within National Grid's framework, and what unique provisions apply to them under the Pension Plan as compared to regular employees of Niagara Mohawk Power Corporation?

Pension Benefits for Transition Group Employees: Transition Group Employees under the National Grid Pension Plan have benefits calculated using both the former final average pay formula and the cash balance formula, with the greater benefit being paid out. This differs from regular employees who only receive benefits calculated under the cash balance formula(National_Grid_2023_Niag…)(National_Grid_2023_Niag…).

What are the repercussions for National Grid employees in terms of benefit loss or limitation if they have not met the Vesting requirements under the Niagara Mohawk Pension Plan? How can understanding these repercussions influence an employee's decision-making regarding their career and retirement?

Impact of Vesting Requirements: Employees must complete three years of service to become vested in the Niagara Mohawk Pension Plan. If they leave before vesting, they lose all accrued pension benefits. Understanding vesting requirements is crucial for career and retirement planning, as it ensures employees retain their pension benefits if they meet the criteria(National_Grid_2023_Niag…).

As a current employee at National Grid, what does the termination of the Pension Plan imply for accrued benefits under the Niagara Mohawk Pension Plan? Specifically, how do federal protections through ERISA and the Pension Benefit Guaranty Corporation come into play for employees seeking assurance regarding their retirement funds?

Termination of Pension Plan and Federal Protections: If the Niagara Mohawk Pension Plan is terminated, accrued benefits are protected by ERISA and insured by the Pension Benefit Guaranty Corporation (PBGC). Employees can feel assured that their benefits will be secured up to the PBGC's limits in case of plan termination(National_Grid_2023_Niag…).

How does the National Grid Pension Plan accommodate the unique situations of employees during times of disability or military service, and what steps should Niagara Mohawk Power Corporation employees take to ensure their benefits continue during these periods?

Disability and Military Service: Niagara Mohawk employees receive service credits during periods of disability or military leave, ensuring continuous pension accrual. Employees should ensure their disability or military status is properly documented with the company to avoid interruptions in their pension benefits(National_Grid_2023_Niag…).

When considering the various forms of pension payments available to retirees from National Grid, what are the potential advantages and disadvantages of choosing an annuity versus a lump-sum payment for employees from Niagara Mohawk Power Corporation?

Annuity vs. Lump-Sum Payment: Retirees at National Grid have the option to choose between an annuity, providing a steady income for life, or a lump-sum payment. The annuity provides financial stability, while a lump sum offers flexibility. The choice depends on individual financial needs and retirement goals(National_Grid_2023_Niag…).

For those looking to gain further clarity on the nuances of the Niagara Mohawk Pension Plan, what are the most effective ways for employees to contact National Grid for assistance? How can engaging with the Pension Service Center enhance an employee's understanding of their benefits and rights?

Contacting National Grid for Pension Assistance: Employees seeking more information about their Niagara Mohawk Pension Plan can contact the National Grid Pension Service Center or use the online pension modeler. Engaging with the Pension Service Center provides personalized guidance, helping employees understand their benefits and make informed decisions(National_Grid_2023_Niag…).