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If you are deciding on whether a reverse mortgage loan is right for you, you'll naturally want to determine which lending institution to go with, especially when it comes to the most beneficial terms and the associated costs. Obviously, one of the easiest things you can do is to simply go to the bank you already transact with for daily financial tasks to see if they offer reverse mortgages, but chances are that your own bank may not offer such reverse mortgage loans to its senior customers. A... Read Full Article
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Over the past several years there have been several television commercials with spokesmen pitching reverse mortgages. However, it is still not a term that is very well understood by most people for a very good reason. Mortgages come from lenders and are what people use to purchase homes, not earn money. However, the reverse mortgage is a unique arrangement that allows people who own their homes to acquire money while using their property as collateral. In a simple explanation, a reverse mortgage is a loan that is secured by your... Read Full Article
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The reverse mortgage is a great product. But like all products, it is not a fit for every consumer. And while the product brings many advantages to aging homeowners, there can be downsides as well depending on the prospective borrower's situation. Here is a look at six reverse mortgage disadvantages to weigh if you are considering a home equity conversion mortgage (HECM) loan. 1. A reverse mortgage is not for everyone. A reverse mortgage is a loan for homeowners age 62 and over, which allows them to borrow against... Read Full Article
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Like all loans, reverse mortgages come with some one-time costs and fees that all borrowers will face during the loan closing process, as well as some ongoing costs they will incur throughout the course of the loan. Many of the closing costs are the same as the costs that forward borrowers incur, such as recording fees. There are a few reverse mortgage-specific costs to be aware of, as well, in order to get a full picture of the costs associated with getting a reverse mortgage. In this article you... Read Full Article
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1. You do not want to leave your home - ever. If you are comfortable in your current home and have no plans or desire to move, a reverse mortgage can help you stay. With a federally insured reverse mortgage (HECM), you still retain ownership of your house and may stay there for as long as you live. Your reverse mortgage doesn't need to be repaid until you pass away or move out of the home. One feature of HECMs that is great for borrowers is that they are... Read Full Article
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If You've Looked at a Reverse Mortgage in the Past, You May Want to Look Again! If you have ever investigated a reverse mortgage or have thought about it, especially in the past 24 months and didn't think the numbers worked for your needs, it may be time to check again. The reason we say this is because one of the main factors that determines how much money you will receive in your reverse mortgage is the interest rate. Since HUD changed the Floor Rate on the program, borrowers had... Read Full Article
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In 1961, banker Nelson Haynes of Deering Savings & Loan in Maine wanted to ensure that the widow of his high school football coach could remain in her lifelong house despite losing her husband's income. So, Haynes wrote what is believed to be the first reverse mortgage, which lent her money against the equity of her house. The reverse mortgage has evolved heavily since its inception nearly six decades ago and has evolved dramatically since Congress approved it as a federally insured product in the late 1980s. But the story... Read Full Article
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Today's seniors are sitting on an incredible amount of home equity: more than $11 trillion. For many, it's their largest asset. A HECM LOC lets older adult clients access that equity at a predictable growth rate, regardless of whether their home value increases or decreases. Borrowers with sufficient equity may have access to growth on their total credit facility. Here are two examples with and without a mortgage balance: Example 1: HECM line of credit growth with a mortgage balance Home Value: $550,000 Mortgage Balance: $100,000 Age: 65 Principal Limit: $207,900... Read Full Article
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The decision to get a reverse mortgage can be a big one, depending on the borrower's financial situation. Maybe you've decided that additional cash flow will help to stabilize your retirement finances, or maybe you're looking to fund something like in-home care or a renovation to make your house more accessible. Whatever your potential reason for getting a reverse mortgage, you won't find an industry that is more upfront about the potential benefits with possible downsides to the product category. Any reverse mortgage professional worth their salt will be very open about... Read Full Article
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Many senior borrowers have been raised on the idea that a fixed rate reverse mortgage is the "only way to go". Still others remember back to the early 80's when interest rates climbed as high as 18%. Some borrowers experienced rising interest rates from adjustable-rate loans (or knew others who did) and some remember family and friends whose payments rose to a point where they could no longer afford their homes. A fixed rate locks the rate in for the life of the loan and the borrower does not have... Read Full Article
