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HECM vs HELOC Loan Comparison: Which is Best for You?

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Although the costs to establish a HELOC (Home Equity Line of Credit) with a HECM (Home Equity Conversion Mortgage) are higher and you do have mortgage insurance premium (MIP) on the loan as well that does add an additional .50% to the accrual (the MIP is not interest but it accrues the same way), the interest rates for a HECM line of credit are very comparable to a Home Equity Line of Credit you would receive from a bank. Let’s talk about the differences because they are immense ... Read Full Article

How Reverse Mortgages Affect Heirs & Inheritance

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A reverse mortgage allows you to live in your home for life requiring no monthly repayments.  Your benefit amount is based on borrowers’ ages, property value, HUD lending limits and interest rates, not the amount you owe so you may receive only enough to pay off your existing loan on the home, but in many instances, borrowers receive a large enough benefit to pay off their existing mortgage and still give them additional funds for other uses. Heirs Have Indirect Benefits to Reverse Mortgages  Firstly, if you need... Read Full Article

How to Get a Reverse Mortgage Loan in 4 Easy Steps

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A reverse mortgage is a loan for homeowners age 62 and over, which allows them to convert some of their home equity into cash. This explains its name: instead of a regular mortgage, where a person borrows money to buy a house, a reverse mortgage lets a person borrow money from the house that he or she already owns. It also explains the official name of the reverse mortgage backed by the Federal Housing Administration (FHA): The Home Equity Conversion Mortgage loan, or HECM. This name... Read Full Article

Free Reverse Mortgage Calculator – No Personal Information

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A Reverse Mortgage Calculator is a tool for consumers to use when shopping for a reverse mortgage. Many calculators exist on various sites, but borrowers should take care in which reverse mortgage calculator they ultimately choose to utilize. For example, there are some calculators on some lender sites, and even some sites with calculators that exist only to sell consumer information to lenders, that require borrowers to complete a substantial amount of their personal information before the calculator will even give them the information the interested party is seeking (whether... Read Full Article

6 Reverse Mortgage Disadvantages & How to Avoid Them

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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. A reverse mortgage is not for everyone. A reverse mortgage is a loan for homeowners age 62 and over, which allows them to... Read Full Article

Reverse Mortgages Come with Upsides & Downsides

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So, you’re thinking about getting a reverse mortgage, but you’re not sure how the product will work best for you. Maybe you’re hearing the downsides of the loan along with the upsides. Here is a look at the pros and cons of a reverse mortgage. Reverse Mortgage PROS/Upsides  Pro: It helps seniors stay in their homes. While there are several reasons to access a reverse mortgage, among the best known is the opportunity the product presents to fixed-income seniors seeking funds for their basic needs. For this population,... Read Full Article

New York Governor Signs 2020 Reverse Mortgage Regulations

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Update: New York Governor Vetoes Co-Op Legislation New York Governor Andrew Cuomo vetoed legislation (Senate Bill 3686-B) last week that would have permitted reverse mortgages on cooperative housing. While FHA does not permit Home Equity Conversion Mortgages on co-ops, NRMLA worked with state lawmakers and other stakeholders earlier this year to craft a bill that could have offered a way for co-op owners to use proprietary reverse mortgages for their retirement needs. In a statement announcing the veto, Governor Cuomo said, “While the goal of the legislation is... Read Full Article

What is a Reverse Mortgage? Explained in Layman’s Terms

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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 the loss of 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 evolved greatly since Congress approved it as a federally-insured product in the late 1980s.... Read Full Article

Can a reverse mortgage appraisal be used by another lender?

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Can a reverse mortgage appraisal be used by another lender? The answer to this used to be “Not only can it be used by another lender as well, but it must be used by all lenders on FHA loans until the appraisal has expired”. However, HUD has issued some strange guidance and rules in recent times in conjunction with the real estate appraisal industry. So, here is the new answer:  HUD assigns a Case Number at the lender’s request and the lender must order an appraisal... Read Full Article

2020 Reverse Mortgage Limits Soar to $765,600!

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In early December, the U.S. Department of Housing and Urban Development (HUD) announced that the lending limit for Home Equity Conversion Mortgages (HECMs) – the federally-backed reverse mortgage program – will be increasing for the fourth year in a row. Beginning on January 1, 2020, the lending limit for government-insured reverse mortgages will be $765,600, marking an increase of $39,075 from the lending limit HUD set for 2019. HUD announced the revised lending limit for 2020 in an officially released Mortgagee Letter (ML). The amount of... Read Full Article