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Mortgage Finance

Reverse Mortgages Can Advantage Elderly

Reverse mortgages are available through lenders insured through the federal government and could be of excellent benefit to those who are eligible to apply. You will find three kinds of reverse mortgages currently obtainable in the United States, including House Equity Conversion Mortgages (HECM), Fannie Mae (FNMA) House Keeper and Financial Freedom Cash Accounts.

The fundamental premise of a reverse home loan is that it enables homeowners over the age of sixty-two to convert part of the equity in their houses into tax-free income without having to sell the house, give up the title to the home, or take on a new monthly home loan payment. The reverse mortgage is titled as such simply because lenders pay the borrower fixed payments or a lump sum over time as opposed to a traditional home loan arrangement. Eligible property includes single-family dwellings, manufactured houses built after June 1976, condominiums and town houses.

The procedure for applying for a reverse home loan is more involved than having a conventional home loan. Aside from meeting the age and property type restrictions, applicants should discuss the loan with a counselor employed through the U.S. Department of Housing and Urban Development prior to signing. There are five different types of payment techniques for each United States government insured loan obtainable, allowing for flexibility to meet the requirements of the applicants. These consist of monthly, quarterly, semi-annual and annual payments towards the borrower for a fixed number of periods or a lump sum that can be invested.

Repayment terms also vary through the interest rate, as with conventional mortgages. People who select variable rate mortgages will pay over one percent less since the danger assumed by the borrower for agreeing to month-to-month adjustable rate calculations can greatly increase their risk more than the life of the mortgage. The total of the home loan is due when the house is no longer occupied through the borrower and can be paid by the borrower or by his or her heirs in the event of death.

While many think about borrowing to be a bad idea later in existence, reverse mortgages simply allow seniors to enjoy the equity they have already established without carrying the danger of getting to meet monthly payments while on a reduced or fixed income. This can substantially improve the high quality of life for numerous older Americans and allow them to appreciate the fruits of their life long labor.

If you are looking for more information on Reverse Mortgage Calculator, then I suggest you make your prior research so you will not end up being misinformed, or much worse, scammed. If you want to know more about Reverse Mortgage Rates, go here: Reverse Mortgage Rates

categories: Reverse Mortgage Calculator,Reverse Mortgages Pros and Cons,Reverse Mortgage Rates

Mortgage Finance

If I Wait To Do My Reverse Mortgage, Will I Get More Money?

We will address the three factors of a reverse mortgage that determine that amount of money that is available to you in this article.

1. Your age. You probably already know that you need to be at least 62 years old if you want to do a reverse mortgage, but does it make sense to wait until you are older to get more money? In my opinion, it does not pay to wait to get older. Interest rates may go up, and that will affect your available equity more than your age, but more on that in a minute.

The prior paragraph has an exception. If there is a spouse under 62 years old, but you qualify, should you wait until everyone is old enough? I can definitely say “it depends”. If there is a hardship like potentially losing your home or needing a sum of money for medical expenses, it can make sense to just do the loan. Another reason to not wait is if the spouse is planning to move upon your passing so they can live near family. By taking a person off title and doing a reverse mortgage, you run the risk of leaving them without a home. They will need to refinance or sell the home since they weren’t on the reverse mortgage. Please remember: It doesn’t usually make sense to remove a person from title just to get more money, unless there is a hardship being avoided.

2. The interest rates. Interest rates are at an all time low. Fixed rates are in the low 5’s. An interest rate hike of a percent or more could mean thousands of dollars less that you receive. Do you want to gamble with what the rates will be in 3 or 4 years?

3. What your home is worth. The value of your home is what your loan amount is based on. So if you are hoping that values will go up enough to matter, you might be better off using today’s value. Guessing what the home will be worth 3 years down the road is pretty hard to do. I have plenty of clients that wanted to wait a couple of years and all that happened is the values of their properties have decreased. If you’re lucky you may still qualify.

If it works, why continue waiting? What are you hoping for? If the numbers work today, just do it. You can use a reverse mortgage to start living your retirement today, with real numbers that you can use, based on today’s information. If you would like to see what you qualify for, try our FREE reverse mortgage calculator.