Many older home owners are beginning to use the reverse mortgage to get rid of some financial problem. To do so you need to be at least sixty two and have a pretty good equity position in the home.
It is definitely case by case in terms of whether the reverse mortgage is the right decision. For many it certainly is.
Those refinancing with the reverse mortgage can use funds in any manner they deem necessary. I find most are getting themselves out of their current mortgage to free up money. Others want to pay off debt or to supplement income.
It's pretty easy to see why the reverse is becoming so popular. Using this mortgage a borrower can solve their problem, not be forced to make payments to the bank, and never lose title to the home.
Additionally, interest rates are very competitive. Traditional mortgages have interest rates just barely better than the reverse.
As long as the program is explained properly the reverse mortgage is a very strong financial option. However, it is not without fault.
When comparing closing costs of forward and reverse mortgages you'll find reverse closing costs to be much higher.
You gotta wonder why this is the case.
Well, the biggest reason are the origination fees, mortgage insurance and title insurance are based upon the appraised value rather than the mortgage amount. The other main point is HUD insurance is two percent.
Put your calculator to given home value and these costs are fairly hefty.
The reverse mortgage is a great mortgage except for the costs. As such one must be thoughtful before going forward with this.
Reverse mortgage companies provide a disclosure which discusses the cost of the mortgage annually. It takes into consideration these closing costs.
The document will show annualized costs over various years in the future.
The idea of the disclosure is to show how the actual cost of the mortgage reduces as you get further and further away from closing.
The idea is to give you real data to help you determine, based upon the actual costs, if the reverse mortgage is for you. - 16928
It is definitely case by case in terms of whether the reverse mortgage is the right decision. For many it certainly is.
Those refinancing with the reverse mortgage can use funds in any manner they deem necessary. I find most are getting themselves out of their current mortgage to free up money. Others want to pay off debt or to supplement income.
It's pretty easy to see why the reverse is becoming so popular. Using this mortgage a borrower can solve their problem, not be forced to make payments to the bank, and never lose title to the home.
Additionally, interest rates are very competitive. Traditional mortgages have interest rates just barely better than the reverse.
As long as the program is explained properly the reverse mortgage is a very strong financial option. However, it is not without fault.
When comparing closing costs of forward and reverse mortgages you'll find reverse closing costs to be much higher.
You gotta wonder why this is the case.
Well, the biggest reason are the origination fees, mortgage insurance and title insurance are based upon the appraised value rather than the mortgage amount. The other main point is HUD insurance is two percent.
Put your calculator to given home value and these costs are fairly hefty.
The reverse mortgage is a great mortgage except for the costs. As such one must be thoughtful before going forward with this.
Reverse mortgage companies provide a disclosure which discusses the cost of the mortgage annually. It takes into consideration these closing costs.
The document will show annualized costs over various years in the future.
The idea of the disclosure is to show how the actual cost of the mortgage reduces as you get further and further away from closing.
The idea is to give you real data to help you determine, based upon the actual costs, if the reverse mortgage is for you. - 16928
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