posted by N. Sioris
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If you are a senior homeowner considering taking out a reverse mortgage you need to understand the importance of the value of your home. The amount of money that you will be able to receive from a reverse mortgage directly relates to the value of your property. If your home is declining in value, as most real estate across the nation currently is, you should seriously think about getting your reverse mortgage application in process sooner rather than later.
The longer you wait to apply for your reverse mortgage, have your property appraised and get the loan closed, the more chance you have of your property declining in value. If your property value drops, the amount of money you will be eligible for also drops.
Three main variables determine the amount of money you can get from a reverse mortgage. Number one is your property value in proportion to your equity or loan balance, if any. Number two is your age. And number three is the current interest rate.
At the present time, two of the three factors mentioned above are working against you. Property values are declining and interest rates are rising. Both of these factors reduce the amount of money you will be offered on a reverse mortgage.
So the message is; if you know that you are seriously interested in getting a reverse mortgage, don't wait, get started today.
posted by N. Sioris
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Fixed rate reverse mortgages have been introduced recently through FHA/HECM as well as proprietary products from various private lenders.
But before you get all excited, you should really take a moment to compare the fixed rate offerings to the more traditional reverse mortgages that were customarily adjustable rate loans. I know what you're thinking: Most of us want a sure thing, we don't want any changes down the road.
As older Americans, we don't feel comfortable with uncertainty. But, guarantees come at a price. In the case of fixed rate reverse mortgages, the price comes in several ways. Number one, the interest rate will be higher than on an adjustable rate. And two, that means that you will get a lower loan amount to draw your money from.
Since the lender is going to guarantee you a "fixed" rate, they will pass on the market risk to you. The lender is too smart to offer you the lowest fixed rate available in the market today, since the lender has no way of knowing how long you will keep the reverse mortgage. Therefore, the lender will factor in a cushion for taking interest rate risk over your life expectancy or the life of your reverse mortgage loan.
So you see there are no free lunches. If you opt for the adjustable rate reverse mortgage, you will be riding the market not the lender. Therefore, the lender feels more comfortable offering you the current market interest rate when you close your reverse mortgage, knowing that as the market goes up and down over the years, so does your reverse mortgage interest rate. Wallah! No interest rate risk. Consequently, the lender will give you a larger loan amount today and today's current interest rate, not some rate that is higher than the current market rate.
Find out more about your options and request a comparison between what would be available to you on both an adjustable rate and a fixed rate reverse mortgage. You will be surprised at the difference in the figures.
posted by N. Sioris
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Reverse Mortgages offer older homeowners a solution for accessing their home equity without having to make monthly mortgage payments. Seniors that find themselves strapped for cash or are having difficulty coming up with lump sums of money to make major purchases or home repairs, are increasingly turning to reverse mortgages to help with their financial needs.
A few quick facts that you should know about Reverse Mortgages:
Reverse Mortgages are "Rising Debt" loans.
No mortgage payments are required as long as the borrower lives in the home.
The money received from a reverse mortgage is Tax-Free.
There are no income or credit qualifications considered for loan approval.
The house stands alone for the debt when the mortgage is re-paid.
Social Security and Medicare benefits are not affected by a reverse mortgage.
The lender does not own the home. Owner retains title to the property.
The lender does not sell the home when the owner dies or moves out.
More in depth information can be obtained from this Free Reverse Mortgage Report.
You can also request a complimentary Reverse Mortgage Evaluation to see how much money you are eligible to receive if you apply for a reverse mortgage.
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