06 Nov Selling An Annuity To Purchase Real Estate
Whether you got it from an insurance claim, a personal injury lawsuit, or even lottery payments, selling an annuity for immediate cash can be a great decision for a variety of reasons. In many cases, selling a structured settlement can make paying off medical bills or funding a child’s college education simple. Those who have no debt but have been eyeing a new home or a piece of waterfront property can make their dreams a reality. Selling annuity payments is a great way to acquire cash to put down for real estate.
First, it’s important to note in most cases real money is involved with annuity settlements. The average structured settlement payout is $324,000, and that’s no ordinary chunk of change. If you take the annuity, however, you won’t see the bulk of that money for many years, which is part of the reason 92% of claimants who sell their structured settlements are satisfied with their decision.
According to data from the National Association of REALTORS®, 4.94 million existing homes were sold in 2014, compared to just 437,000 newly constructed homes that were sold that year, according to the U.S. Census Bureau. Even most existing homes are going to be costly, as the median price for ones sold in the U.S. is about $188,900. In total there are about 133,026,000 housing units in the U.S. with a combined value of approximately $25.7 trillion. In order to purchase most of these options, buyers typically need to put down 20% of the unit’s value, according to MortgageCalculator.org.
As the housing market has slowly made its way back from the collapse a few years ago, there’s really no better time to buy than now. The average rate on the 30-year-fixed mortgage was less than 4% in all but one of the first nine months of 2015. The lone exception was July’s 4.05% rate. In fact, throughout the past few years, these rates have remained historically low. Annual mortgage rates were under 5% on average from 2010 through 2014, according to data from Freddie Mac.
Depending on their credit scores, buyers might be eligible for lower down payments as well. According to MarketWatch, a credit score between 660 and 680 is the range in which lenders allow buyers to opt for lower down payments. Naturally, however, the lower the credit score, the higher the down payment may be.
If you’ve ever dreamt about buying a new piece of real estate and have an annuity or structured settlement, consider selling it for cash today and make your dreams come true tomorrow.