The Up and Down Side of the Reverse Mortgage
If you are a home owner, aged 62 or older, with a good amount of equity you have the opportunity to use a reverse mortgage to solve a financial problem.
Many people don't have much of a choice. They have to go forward with the reverse mortgage. For others it takes some evaluating.
One can use proceeds from the reverse mortgage for any reason. It really runs the gambit from dumping their mortgage payment by refinancing the forward to a reverse, killing bills, and lastly to having fun money.
Reverse mortgage numbers set a record every year. It shouldn't come as any surprise with the ever-rising cost of living. Borrowers have the opportunity to get out of their problem and still keep their name on title.
On top of that interest rates charged for the reverse mortgages are very competitive with their conventional mortgage counterparts.
There really is very little negative when it comes to the basic structure of the reverse mortgage. There is only one downside.
Quite simply closing costs are high. And they are high relative to traditional forward mortgages.
There are really two main reasons for this..
The first being that costs are based upon the value of the home rather than the loan amount. The other is FHA charges 2% of the value for mortgage insurance.
Put your calculator to given home value and these costs are fairly hefty.
All things being equal a reverse mortgage is very strong. The costs are not equal and must be factored when considering a reverse mortgage.
Reverse mortgage companies provide a disclosure which discusses the cost of the mortgage annually. It takes into consideration these closing costs.
The nice thing is it covers how much the mortgage costs in the coming years.
As the loan ages it will become clear to you that the annualized cost goes down over time.
The idea is to give you real data to help you determine, based upon the actual costs, if the reverse mortgage is for you.
Many people don't have much of a choice. They have to go forward with the reverse mortgage. For others it takes some evaluating.
One can use proceeds from the reverse mortgage for any reason. It really runs the gambit from dumping their mortgage payment by refinancing the forward to a reverse, killing bills, and lastly to having fun money.
Reverse mortgage numbers set a record every year. It shouldn't come as any surprise with the ever-rising cost of living. Borrowers have the opportunity to get out of their problem and still keep their name on title.
On top of that interest rates charged for the reverse mortgages are very competitive with their conventional mortgage counterparts.
There really is very little negative when it comes to the basic structure of the reverse mortgage. There is only one downside.
Quite simply closing costs are high. And they are high relative to traditional forward mortgages.
There are really two main reasons for this..
The first being that costs are based upon the value of the home rather than the loan amount. The other is FHA charges 2% of the value for mortgage insurance.
Put your calculator to given home value and these costs are fairly hefty.
All things being equal a reverse mortgage is very strong. The costs are not equal and must be factored when considering a reverse mortgage.
Reverse mortgage companies provide a disclosure which discusses the cost of the mortgage annually. It takes into consideration these closing costs.
The nice thing is it covers how much the mortgage costs in the coming years.
As the loan ages it will become clear to you that the annualized cost goes down over time.
The idea is to give you real data to help you determine, based upon the actual costs, if the reverse mortgage is for you.
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I'm guessing you gotta get boned up on California reverse mortgage info. Well head on to that link. Go here too You can get a guide to the reverse mortgage in California at this website.
posted by Credit Counseling at
2:28 PM
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