Welcome to Mortgage Guide
Mortgage Home Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Is A Reverse Mortgage Right For You?
from: Deb St. George - HomelessInKingCounty.comA reverse mortgage is the exact opposite of a traditional mortgage. Instead of you paying the bank to live in the house, the bank pays you to live in it. This may seem a bad deal for the bank, but there are a lot of reasons why a bank will allow a reverse mortgage. Typically a reverse mortgage is only approved for someone 62 or more years of age that has paid off his or her original mortgage. With all that equity in the home, the senior sitting in it might want to stay in the home but face additional expenses in medical or living costs that they can’t cover. Instead of selling the home and downsizing, they may choose to do a reverse mortgage with a bank instead thus allowing them to remain in the home.
How It Works
The reverse mortgage is a little more complex to close than a traditional mortgage. There are a number of different rules surrounding this type of mortgage loan. The age limit is one barrier and also the condition of the home may be another. The home has to be in good condition, free of major faults, before the bank considers doing this type of mortgage. Closing costs are significantly higher than the traditional loans and fees can also eat into equity. However, the upside is that you can get a disbursement of cash to help you pay immediate expenses while not having to vacate your home. This cash can come as a lump sum, a monthly payment, or even a credit line. The terms of the loan may differ with the bank involved and you should check to see what happens if you eventually sell the home instead of staying in it until you die.
The Potential Negatives
Seniors are targeted by unscrupulous lenders with predatory lending practices that can include a high fee reverse mortgage. Most lenders will be asked to undergo counseling before they take out a reverse mortgage, but that might not be enough to assess whether the mortgage is what you need at this point in your life. As always, if you aren’t certain of what you are signing, don’t sign. Instead, try to review the documents with someone who is knowledgeable and can answer any questions you might have about this type of mortgage. There are some downsides to a reverse mortgage. They can impact your ability to receive Medicaid benefits and government financial assistance. So, be sure to not only look at the terms of the mortgage but also check with your local government offices to see if the mortgage product might actually reduce your income instead of increasing it, due to the offset of benefits.
Mortgage Home News
National mortgage rates for May 17, 2012
Interest Rate Roundup Mortgages CDs Auto Loans Home Equity Credit Cards Find the best mortgage rates in your area. Mortgages 3.97% (30-year fixed) 0.44 (average points)Mortgage rates reached record lows, ...
Read more...Mortgage Rates in U.S. Fall to Record Lows With 30-Year at 3.79%
Mortgage rates in the U.S. fell to a record for a third straight week, reducing borrowing costs as the housing market improves and home-loan defaults decline.
Read more...Mortgage refinancing applications jump; rates fall: MBA
NEW YORK (Reuters) - Applications for U.S. home mortgages surged last week, driven by increased demand for refinancing as interest rates hit fresh lows, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, jumped 9.2 percent in the week ended May 11. The ...
Read more...Mortgage rates hit record low for third week in a row
Mortgage rates hit record low for third week in a row
Read more...U.S. 30-Year Mortgage Rate Falls to Record 3.79%
(WASHINGTON) — Average U.S. rates for 30-year and 15-year fixed mortgages fell to record lows for the third straight week. The steady decline has made home-buying and refinancing more affordable than ever for those who can qualify. Mortgage buyer Freddie Mac says the rate on the 30-year loan dipped to 3.79 percent. That’s down from [...]
Read more...Mortgage Lender Residential Finance Corp. Explains Benefits of HARP 2.0
When June Snow first looked into refinancing her interest-only mortgage, she was told it would be impossible because the value for her three-bedroom, two-bath ranch style home was not in the necessary range.
Read more...Gateway Mortgage Group Enters Omaha, Neb. With Establishment of New Branch
Gateway Mortgage Group, a privately held mortgage company providing conventional, FHA and VA loans through 50 retail branches nationwide, has acquired its largest branch and entere
Read more...