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What Is The Best Reverse Mortgage Loan? By Robin OBrien Many seniors are wising up to the benefits of getting a reverse loan. However, finding the best program for an individual's needs is important. Opting for the wrong program can cost the borrower thousands of dollars. Here are some pointers to help you along in choosing the one that'll best suit your particular circumstances.
You probably already know what a reverse loan is, but to recap: it's a government backed financial tool that allows seniors to unlock the capital that is tied up in their home. Unlike a home equity loan, you do not have make monthly repayments, risk loosing your home because of missing monthly repayments, or have income or health checks (you don't make monthly repayments so the lender couldn't care less).
Instead, for this type of loan you first have to be 62 or over and own nothing or very little on your home. The lender gives you money based on the equity value of your home, its location, current interest rates and your age. You can receive payments in a number of ways though most prefer fixed amounts each month. You are guaranteed to receive payments as long as your remain living in your home.
The above is a quick overview; there are more points and features you should be aware, so if you don't already understand how this type of loan works, then take a step back and go and find out the information you need before you begin searching for the loan itself.
HECM Reverse Loan
A Home Equity Conversion Mortgages (HECM) is by far the most popular choice - over 90% of seniors choose this program. This type of loan is insured by the US government through the Federal Housing Administration insurance scheme that is administered under the auspices of the Department of Housing and Urban Development (HUD). Consequently, this loan is often referred to as a FHA or HUD reverse mortgage.
The government backed insurance is its biggest plus; should payments received by the borrower exceed the value of the equity in the borrower's home, it guarantees to pay the lender any shortfall, so borrowers can rest assured that they will always get the money they're entitled to.
The maximum amount you can get depends on the value of the home, location, interest rate and age of borrower. However, the maximum amount is capped and the amount varies from $200,160 to $362,790.
You can receive payments in 5 ways: fixed monthly payments, fixed monthly payments over a specified time frame, a line of credit, a combination of fixed monthly payments and line of credit, or a combination of fixed monthly payments
buying a mobile home on a rented lot Am in the process of divorcing my present husband and found this mobile home to live in. What would be a good way to finance it? Who owns the home My friends son passed away several years ago, his mother lived with him prior to his death and has paid the mortgage, property taxes, insurance, etc... on the property for almost 10 years. She is wanting to get the property in her name and Bank of America will not talk to her. Her son has a child who is almost 10 yrs old who lives with his biological mother. My friend says that she will do a will and live the property to her grand son, however can the 10 yr old son's mother take the home afte... Inquiries to dissappear completely? I have 5 inquiries that are due this month from different credit bureaus. Basically I will be inquiring free on Experian and about 3 inq on TU and EQFX. They will be 1 year old......according to USAA credit monitoring. Is this the right time or I will need to wait 1 more year for the inquiries to dissappear completely? Thanks for the answer Letter of explanation Please help. My underwriter wants a letter of explanation on a couple of late car payments from 2 years ago. The car loan was in my name but the car was my sisters? should I say that? Will they think I?m full of it? Anybody have similar experience? File with underwriter Well, my file went to the underwriter on Monday after we worked with our broker to get everything together. Now, they are playing the waiting game. I know that someone has looked at the file only because they did come back on yesterday asking for us to sign 2 forms that were not included in the file. I have followed up with our broker today to check status and he is placing a call with the lender. Fingers crossed we can get our answer soon. Divorce My husband and I own commercial real estate. We are contemplating divorce and have been legally seperated for 2 years now. The joint property we own, he operates a shoe repair and uphostery shop and he resides there. He has full use of the property and he wants me to share in with the mortgage, insurance, and taxes. He receives all profits and does not share any with me, but he wants me to share in the cost of his expense. He gives me $300 a month for our 6 yrs old daughter and not on a regular ... Banks selling mortgages - Escow mess ups & raised Mort Incre My Husband and I just went through a mortgage modification loan with a bank. We were andquot;forcedandquot; to not pay our mortgage for 2 months in order to qualify for the modification loan. We have always made our mortgage payments on time. We got the Mod. loan.
Since the sale of our mortgage, 2nd time banks have sold our mortgage to another bank, our escrow gets screwed up, monthly payment goes up.
Currently the andquot;NEWandquot; bank now holding our loan, is harassing us by saying that the e... Feedback on GFE Just got a GFE from a broker on a loan amount of 350k and wanted to get some feedback.
Rate = 3.875
801 = 7k
802 = 11k
Is this standard? With the 801 fee the APR is slightly north of 4. Previous year tax returns How greatly do previous years taxes filed effect your ability to obtain a mortgage? Do you have to have the same level of income for the past two years to get a mortgage loan? Close cards before pre-approval Hi? I?m trying to get pre-approved for my first mortgage loan within a few months. My present score is 786. I paid off a vehicle loan with time payments. I have 6 credit cards 3 are department store cards with a combined limit of around 8k with no balance the other 4 are regular visa cc's with a limit of 9k combined no balance or late payments. I want to close 3 of the visa cards bringing my limit back to 5k. The one I am keeping I just opened about 2 weeks ago. My question is if I close the...
over a specified time frame and line of credit.
Note: lines of credit are not available in Texas.
Home Keeper Reverse Loan
This program is administered by Fannie Mae. Although similar in many ways to the HECM program, it allows greater flexibility on the type of home that is eligible, like condominiums (though these must be FHA approved), pays less to couples but more to singles and the maximum amount that can be borrowed is larger. HECM's line of credit grows while Fannie Mae's line of credit does not.
Any broker who offers this program must also off the HECM program. Both programs require that the borrower receive information and counseling from an independent third party advisor.
Proprietary (Jumbo) Reverse Loan
These are set up and run by private companies. The biggest advantage is that there is no cap on the amount that can be borrowed against the equity in the borrower's home, so this type of program is good for those in expensive homes who want to unlock a large amount of money. However, these loans are usually much more costly for the borrower and not every program is available in all 52 states, whereas a HECM and Home Keeper are.
One final important point about a jumbo reverse loan is this: you do not have the option of receiving monthly payments; instead you can only elect to receive the money either as a lump sum or line of credit.
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buying a mobile home on a rented lot Am in the process of divorcing my present husband and found this mobile home to live in. What would be a good way to finance it? Who owns the home My friends son passed away several years ago, his mother lived with him prior to his death and has paid the mortgage, property taxes, insurance, etc... on the property for almost 10 years. She is wanting to get the property in her name and Bank of America will not talk to her. Her son has a child who is almost 10 yrs old who lives with his biological mother. My friend says that she will do a will and live the property to her grand son, however can the 10 yr old son's mother take the home afte... Inquiries to dissappear completely? I have 5 inquiries that are due this month from different credit bureaus. Basically I will be inquiring free on Experian and about 3 inq on TU and EQFX. They will be 1 year old......according to USAA credit monitoring. Is this the right time or I will need to wait 1 more year for the inquiries to dissappear completely? Thanks for the answer Letter of explanation Please help. My underwriter wants a letter of explanation on a couple of late car payments from 2 years ago. The car loan was in my name but the car was my sisters? should I say that? Will they think I?m full of it? Anybody have similar experience? File with underwriter Well, my file went to the underwriter on Monday after we worked with our broker to get everything together. Now, they are playing the waiting game. I know that someone has looked at the file only because they did come back on yesterday asking for us to sign 2 forms that were not included in the file. I have followed up with our broker today to check status and he is placing a call with the lender. Fingers crossed we can get our answer soon. Divorce My husband and I own commercial real estate. We are contemplating divorce and have been legally seperated for 2 years now. The joint property we own, he operates a shoe repair and uphostery shop and he resides there. He has full use of the property and he wants me to share in with the mortgage, insurance, and taxes. He receives all profits and does not share any with me, but he wants me to share in the cost of his expense. He gives me $300 a month for our 6 yrs old daughter and not on a regular ... Banks selling mortgages - Escow mess ups & raised Mort Incre My Husband and I just went through a mortgage modification loan with a bank. We were andquot;forcedandquot; to not pay our mortgage for 2 months in order to qualify for the modification loan. We have always made our mortgage payments on time. We got the Mod. loan.
Since the sale of our mortgage, 2nd time banks have sold our mortgage to another bank, our escrow gets screwed up, monthly payment goes up.
Currently the andquot;NEWandquot; bank now holding our loan, is harassing us by saying that the e... Feedback on GFE Just got a GFE from a broker on a loan amount of 350k and wanted to get some feedback.
Rate = 3.875
801 = 7k
802 = 11k
Is this standard? With the 801 fee the APR is slightly north of 4. Previous year tax returns How greatly do previous years taxes filed effect your ability to obtain a mortgage? Do you have to have the same level of income for the past two years to get a mortgage loan? Close cards before pre-approval Hi? I?m trying to get pre-approved for my first mortgage loan within a few months. My present score is 786. I paid off a vehicle loan with time payments. I have 6 credit cards 3 are department store cards with a combined limit of around 8k with no balance the other 4 are regular visa cc's with a limit of 9k combined no balance or late payments. I want to close 3 of the visa cards bringing my limit back to 5k. The one I am keeping I just opened about 2 weeks ago. My question is if I close the...
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