Home Mortgage and Refinancing » reverse mortgages

Remortgages May Be The Answer You Are Looking For

Mortgage Maven — Mon, 08 Nov 2010 10:58:03 +0000

A mortgage refinance, or remortgages as they are sometimes called, are simply a process of paying off your first mortgage and replacing it with a completely new one. It is fairly common for the owner of a home to wish to pay off their original loan using this type of financing vehicle for a number of reasons.

A homeowner may have noticed a downward trajectory of mortgage rates and hope to capitalize on market conditions that allow them to cut their payments by refinancing to the new, lower rate. Remortgages of this type may save them thousands in interest payments over the course of the home loan.

Some people may wish to receive money back at closing in their refinance to take advantage of accumulated home equity. Because the interest a homeowner pays on a home loan may be tax deductible, their equity can be used for a variety of things from paying off high interest credit cards to vacations.

These cash out refinances are usually based on percentage of the appraised value of the home. For example: A couple wishes to pay off their $150,000 first mortgage with an entirely new loan and receive cash back at closing. If their home appraises for $300,000 and the new lender will give him a 75% loan to value ratio, they can potentially receive up to $75,000 back at closing to use as they see fit.

There are other reasons for refinancing a home and customers often call lenders with funny random questions asking how to go about it or if the lender allows the reason they want the remortgage.

Homeowners across the country call banks and mortgage lenders practically everyday requesting information on remortgages and the process involved in obtaining one. Whether it is done to eliminate an adjustable rate first mortgage that is set to rise or a way to consolidate debts of almost any kind, a refinance can make financial sense for homeowners looking out for their own best interests.

How Much Money Can You Get with a Reverse Mortgage?

Mortgage Maven — Thu, 21 Oct 2010 20:44:06 +0000

If you are considering a reverse mortgage you most likely are wondering how much money you can get from the loan. Although only your independent counselor can give you an exact amount you are eligible for, there are ways you can get an estimate of how much money you can get from a reverse mortgage.

When it comes to estimating how much money you may be receive from a reverse mortgage, you have to look at how much equity is in your home. You first need to determine what the market value of your home is right now, not what you paid for it. Then if you have any liens against your home or a small mortgage you have to subtract that from the market value. For example, if you house is appraised for $200,000 and you have a small mortgage left of $12,000, you have $188,000 worth of equity in your home. Depending on your age you may qualify for the full amount of $188,000 or slightly less.

One thing to be aware of is that the FHA does have limits on the amount of money you can get from a reverse mortgage. Currently the maximum amount is right around $400,000. This means that if you have more than $400,000 of equity in your home you will not be able to get more than that amount from a reverse mortgage.

There are some lenders that offer a jumbo reverse mortgage, but there are not many of them left since the credit crisis and the housing market has gone down so much. With this type of loan anything over the $400,000 is not insured by the FHA, which puts the lender at great risk. If for some reason you have a home worth $800,000 and you need that full amount from a reverse mortgage you may be able to find a lender who will give you that amount but it will not be easy to do.

These figures can give you an estimate of how much money you can get from a reverse mortgage, but as mentioned you will not find out the exact amount you can receive until you have your counseling session, which is mandatory for a reverse mortgage. Be sure that you note the amount of money your counselor says you are eligible for and don’t listen to any other company as it may be part of a reverse mortgage fraud scam and that is the last thing you want to get caught up in.

The Good and Bad of Reverse Mortgages

Mortgage Maven — Sun, 02 May 2010 23:35:17 +0000

Many people have probably thought about reverse mortgages as way to get some extra cash and to help them make it through. But, you need to understand that there are good things about these types of mortgages and there are also bad things. Fully understanding both aspects can help you decide if one is right for you.

The first thing that may be good is that you can kind of make your own payment schedule. This relates to the fact that you can decide if you want to pay it back all at once or if you want to pay it back in monthly installments. This really can give people a little bit of breathing room each month. Next, you will not have to meet any income guidelines with many reverse mortgages and many of them are tax free. This is great for older individuals.

Now, let us look at the downside of these types of loans in regards to your financial plan. The first point is that the interest is usually added at the end. This means that the amount you owe on the loan may actually be higher than you think because you still need to pay the interest. Another thing is that many of the fees related to these loans are very high and you will be paying a lot in closing costs so you should consider that very early on if you are thinking about these mortgages.

Once you fully understand reverse mortgages pros and cons and everything that relates to them you will be able to decide if one is right for you. The important thing to realize is that they are not always the best option for everyone like most people think they are. It might not be right for you either. That is why you should always read the fine print and ask questions for clarification if you need to.

What Are Reverse Mortgages?

admin — Fri, 24 Jul 2009 17:01:34 +0000

It’s always wise to carefully evaluate all of your options before making a financial decision. That’s especially true when it comes to bankruptcy because of the long-term consequences, and there are many options that people consider including reverse mortgages. What exactly is a reverse mortgage and is it a good idea for paying off your debt?

Who qualifies for a reverse mortgage? If you are at least 62 years old and have home equity, then you qualify for a reverse mortgage. These are loans that are specifically meant for seniors with home equity.

Let’s say you own a $200,000 home, and you own it free and clear (which means you don’t owe the bank anything anymore). You can borrow a certain percentage of the equity in your home, and that amount will be paid to you at a specified time such as on a monthly basis. You won’t have to make any mortgage payments, and nothing has to be repaid until the senior citizens move or die. (You don’t necessarily have to own the home free and clear, as some lenders will simply use whatever equity you may have.)

This might sound like a fantastic bargain, but remember that the loans have to be repaid eventually. If you don’t repay them, then the lender can take over the house and leave your heirs with nothing. If you don’t have any children or grandchildren that will inherit your house, this may not be such a bad idea. You could use the money as income and not worry about what will happen to your house when you pass on.

Did you know that a reverse mortgage may change your eligibility for Social Security benefits? These are the type of things that you need to find out about before making a decision. Never let anyone push you into making a decision and don’t get too excited about the money that you would receive. Remember that the loan has to be repaid at some point whether it is during your lifetime or during the life of your heirs.

What about bankruptcy as an option? We would never say that you should take bankruptcy lightly or jump into it without weighing your options carefully. However, if you have a significant amount of debt, bankruptcy may be better than getting a reverse mortgage. This could wipe out your debts without having to put your home on the line. This is especially significant if your debt comprises unsecured credit card debt because your home is usually safe from that kind of debt.

Why Reverse Mortgages Are Popular

admin — Wed, 22 Jul 2009 20:25:13 +0000

Reverse mortgages are becoming more and more popular these days, but are they scams or are they legitimate? Is it really possible to sell your house back to the bank and still retain the deed to it? Will the bank really pay you pay the mortgage payments? A reverse mortgage can be very useful for the seniors. It is because most of the seniors do not receive income anymore from their work. Reverse mortgage scheme was launched in India with a hype about two years back, in order to provide the senior citizens holding own homes, with a regular stream of income on a monthly basis in the post retirement years. This was after applicable for such persons who choose to mortgage their property to some bank and start taking a regular income on a monthly basis against that.

Reverse mortgage counseling is absolutely an excellent HUD and industry standard. It is imperative that a borrower fully understands any loan or financial product before attaining it. Reverse mortgage counseling has to be done in person or on the phone. It will take about an hour or more if you have several questions. Reverse mortgage plans are known to provide financial assistance to seniors who have to live on pension and savings. Reverse mortgage allows borrowers to liquidate the value of their home equity and utilize this as an additional source of funding in order to live their remaining years in comfort.

Knowledge can give you a real advantage. To make sure you’re fully informed about reverse mortgage calculators, keep reading.

Reverse mortgages are complicated, so you should obtain loan counseling before you take one out. The HECM process, in fact, requires counseling, and FNMA makes it available. Reverse mortgages need to be repaid. Paying the whole amount of the mortgage along with interest at once will be difficult.

Reverse mortgage loans provide homeowners with not only home security, but financial security as well. With no monthly payments and the added incentive of much needed cash for future investments, this mortgage plan is becoming a popular tool for home owners. Reverse mortgages may be the way for some to turn a profit at the banks, or at least the government’s, expense. Reverse mortgages aren’t bad in and of themselves, if the borrower understands the terms of the loan. Like just about any financial tool, it’s a double edged sword.

Reverse mortgage loans function more or less similar to the conventional mortgage loans, just the reverse way. Instead of paying the lender every month, the borrower gets paid by the lender. Reverse mortgages have seen many changes over the years, and 2009 is no exception. The economy has made drastic fluctuations, affecting housing options for good and bad. Reverse mortgages come with sizable fees, which can amount to several thousand dollars. You can roll these fees into the loan.

The day will come when you can use something you read about here to have a beneficial impact. Then you’ll be glad you took the time to learn more about reverse mortgage calculators.

Hot Tips About Reverse Mortgages

admin — Wed, 22 Jul 2009 11:36:08 +0000

Current info about reverse mortgages calculators is not always the easiest thing to locate. Fortunately, this report includes the latest mortgage info available.

A reverse mortgage is a loan provider to the people who are above the age of 60+. The reverse mortgage system is trendy in America as well as in all the developing countries like India. Reverse mortgages can come in different forms and give you different choices. You can take a lump sum payment when you obtain a reverse mortgage or you can choose to receive a monthly payment. Reverse mortgages are only for borrowers who plan to stay in the home for a significant length of time. The costs are high, but in many cases, a reverse mortgage is still the best choice.

Reverse mortgages also take away equity that the homeowner may need for future emergencies or health care costs. And, since proceeds from the sale of the home are generally used to pay back the loan, reverse mortgages can take away from any inheritance that would be left to surviving children. Reverse mortgages are a very good tool for many senior borrowers to enable them to access the equity in their home while never having to make another payment as long as they live in those homes. However, a reverse mortgage has always been a fairly expensive proposition, usually carrying a price tag of a 2% origination fee as well as a 2% government mortgage insurance fee, plus third party costs such as appraisal, title, escrow or closing, etc. Reverse mortgages usually carry variable interest rates, too, and can affect eligibility.

You can see that there’s practical value in learning more about reverse mortgage calculators. Can you think of ways to apply what’s been covered so far?

A reverse mortgage can be the right solution for you but you will need some information of reverse mortgage before you apply for it. You can check out the website above and get the information about reverse mortgage from the website. Reverse mortgage puts a relatively long term financial impact especially in the inheritance factor. If you consider reverse mortgage and have a large family in your home, you have to sit around with them and discus the plans before hand. Reverse mortgage counseling has to be done in a meeting or on the phone. The duration of reverse mortgage counselling will be almost an hour, or more, it depends on how many questions do you ask.

The day will come when you can use something you read about here to have a beneficial impact. Then you’ll be glad you took the time to learn more about reverse mortgage calculators.

by Luke Williams

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About the author: MortgageSet.com offers you tips and useful reverse mortgage calculator resources to help you find the best free mortgage calculator tools. You have full permission to reprint this article provided this paragraph and links are kept unchanged.