 |
Advantages and Disadvantages Of A Reverse Mortgage
Betty and John, are in their mid-seventies and are currently
weighing the advantages and disadvantages of a reverse mortgage
as a way of freeing up some cash. The couple purchased their home
45 years ago for about $14,000 since then home values have
skyrocketed and recent single family homes in their neighborhood
have been selling for a minimum of $160,000.
Like Betty and John, if you're considering a reverse mortgage
it's important to do some research prior to making a decision.
You not only need to understand the basic principles of this kind
of mortgage but you also need to look at all the advantages and
disadvantages of a reverse mortgage.
Essentially a reverse mortgage is a loan that permits
homeowners 62 years of age and older to borrow against the equity
in their homes without having to sell it. Further, you don't have
to give up the title or take on a new monthly mortgage
payment.
A reverse mortgage loan is tax-free and needs only to be
repaid when the borrower (or in the case of Betty and John, when
the surviving spouse) dies or sells the home. At which time, the
reverse mortgage loan must be repaid in full, including all
interest and other charges.
When examining the advantages and disadvantages of a reverse
mortgage it's also important to consider both the process and the
related costs of obtaining a reverse mortgage. Unlike a
conventional mortgage, with a reverse mortgage, the homeowner
(the potential borrower) must meet with a reverse mortgage
counselor. References for counselors can be obtained from banks
offering reverse mortgages or the U.S. Department of Housing and
Urban Development (HUD).
The purpose of these meetings which may take place in person
or on the telephone is for the homeowner to learn about reverse
mortgages and discuss alternative options. It also helps you
decide which kind of reverse mortgage may be best. As well as
exploring the advantages and disadvantages of a reverse mortgage,
it's wise that the potential borrower, also compare costs between
various lenders and request a Total Annual Loan Cost estimate for
each.
Further to discussing the advantages and disadvantages of a
reverse mortgage with a counselor, you also need to understand
that there are certain costs involved in the reverse mortgage
process. Costs may include application fees, closing costs,
insurance, appraisal fees, credit report fees, and quite possibly
a monthly service fee. Remember too that since a reverse mortgage
allows you to continue living in your home, you're still
responsible for property taxes, insurance and repairs. If these
payments are not maintained, the loan could become due in
full.
A reverse mortgage may also affect eligibility for federal or
state assistance as well as Medicaid. That said, any reverse
mortgage money that is received is tax-free and does not affect
Social Security or Medicare benefits.
The condition of your home is also a large part of the
approval process. It must be structurally sound and in good
repair. If it's determined that home repairs need to be done, the
costs can also be financed through the reverse mortgage loan.
The total amount a homeowner can borrow all depends on the
kind of reverse mortgage selected, how much equity is in the
home, the loan's interest rate and most importantly, the age of
the borrower. Typically the older a person is, the more they can
expect to receive.
A borrower can receive reverse mortgage payments in one of the
following ways: in a lump-sum payment; fixed monthly payments; a
line of credit or a combination of any of the above. Most
homeowners go for the line of credit option which allows them to
draw on the loan whenever money is required.
Paul Jesse is a retired government employee, small business
owner and the author of many articles on finance and internet
marketing. Visit his website at: http://www.sheamarketing.com/financial
 MORE RESOURCES updated Thu. February / 09 / 2012
|
AgedLeadStore.com to Add 1100000 Aged Mortgage Refinance LeadsMiddle East North Africa Financial NetworkCOM, January 26, 2012 ) Baltimore, MD AgedLeadStore.com is increasing its value for its customers by adding 1.1 million aged Mortgage Refinance Leads in February. This is important as many people depend upon their ability to refinance to make progress ... |
|
New HARP Could Help Up to 6.7 MillionNASDAQOther changes to the program were designed to make it easier for homeowners with private mortgage insurance (PMI) to refinance or to obtain a HARP mortgage refinance with a lender other than their current mortgage servicer. In addition, new limits were ...and more » |
Google News
|
|
|
RELATED MORTGAGE AND REFINANCING ARTICLES:
Bad Credit Mortgage
Lender - What to Look For
If you have less than perfect credit and are looking to get
approved for a mortgage loan, be careful not to make some
common, costly mistakes. When dealing with sub-prime
mortgage lenders or bad credit mortgage lenders, many
people are taken advantage of because of their eagerness to
get approved.
Home Mortgage Loan
Refinance - Benefits To Refinancing Your House
Online
Here are some of the benefits to doing your home loan
refinance online:Everything seems to happen faster -
Online, when looking for a mortgage loan you can search
around, fill out an application and a few minutes later,
you can be receiving a pre-approval letter via email. There
was no calling, no driving & no waiting on hold for an
answer.
I Have A Slice of the
American Dream and It is a 30 Year Nightmare
Well, we did it. We are buying a beautiful, brand new
house, planning our wedding, and getting ready to move.
Mortgage Research Good
News for House Buyers
Figures from the Council of Mortgage Lenders show that in
July gross lending in totalled £25.2 billion, with
fixed rate deal mortgages are at their most popular for
nearly six years.
Is an ARM Right For
You?
Let's start by taking a look at 7 key elements of an
adjustable rate mortgage:1) ARM defined: While a fixed rate
loan is constant and never changes throughout the life of
the loan, an adjustable rate mortgage changes periodically.
The interest rate of an ARM goes up and down based on
whatever external index it is tied to.
First-time House Buyers:
to Buy or Not to Buy; that is the Question
Buying your first house is always a difficult time. There
are so many important decisions to make, and problems to be
solved, which combine to make it one of the most stressful
events that will occur in most people's lives.
Are Biweekly Mortgages
Really Worthwhile?
You may have heard people, especially mortgage lenders,
extolling the virtues of biweekly payments, saying that you
can save thousands of dollars and take 5-7 years off your
mortgage--and then offering to set up a biweekly plan for
you for as little as $400. But you don't have to spend $400
to begin saving money and time on your mortgage.
Real Estate Tip: Escrow
Accounts -- Do You Really Need Them?
If you have a mortgage on your property, whether it's for
your personal residence or a real estate investment,
chances are you have an escrow account. But if you are
working on building wealth through real estate, you may
want to take a hard look at your escrow account (or
accounts, if you own more than one piece of real estate)
and decide if you really need it.
High Risk Mortgage
Lenders - Using a Sub Prime Lender Online
Sub prime lenders handle high risk mortgage loans that
traditional lenders refuse to touch. Through slightly
higher interest rates, sub prime lenders protect themselves
from the higher rates of foreclosures.
Save Time With a Bridge
Loan
Why You Need a Bridge Loan. You have to move fast in today's
housing market if you want to get into the home of your
dreams. In cities such as Seattle or San Francisco it's not
uncommon for a buyer to receive half a dozen offers within
the first day or two after putting the house on the market.
Why Its Important to Get
Pre-Approved
Having a pre-approved mortgage will give you the confidence
of knowing exactly what you can spend on a home before you
start looking. You will also be protected against interest
rate increases while you look for your new home.
What is a
Mortgage?
A mortgage is a loan, usually from a bank, finance company
or building society to help you buy your home. A mortgage is
a loan, from a bank or building society that is secured
against your house or flat.
Taking the Time to Find
the Best Home Improvement Loans
The best home improvement loans usually aren't going to be
the first loans that you encounter, but if you're in the
market for a loan to pay for repairs, expansions, or
improvements to your home or other real estate then it
might be worth your time to shop around before you decide
on one loan or another.Shopping around for the best home
improvement loans isn't a lot of work, though it can be a
bit time consuming and requires quite a bit of legwork.
Mortgage Loans Explained
In Plain English
With the many different kinds of mortgage loans out there,
choosing the right one for your needs can be a difficult
task. The following points will help you understand the
pros and cons of the different types of mortgage loans
available to you.
Flexible Mortgage
Tips
Outlined below are some useful flexible mortgage tips. The
most prominent addition in recent years to the mortgage
industry has been the flexible mortgage.
Subprime Mortgage
Lenders - Helpful Tips When Getting a Subprime Mortgage
Loan
If you have bad credit history, no down payment or
difficult to prove income and are looking to get approved
for a home mortgage loan, you will probably need to look at
subprime mortgage lenders to help you. To see a list of our
recommended subprime mortgage lenders you can click on the
link below.
How to Compare Fixed
Rate Mortgages and Adjustable Rate Mortgages
There are many types of mortgages, and the more you know
about them before you start, the better. To compare one
Adjustable Rate Mortgage with another or with a fixed-rate
mortgage, you need to know about indexes, margins,
discounts, caps, negative amortization, and convertibility.
Home Equity Lines of
Credit - the Basics
A Home equity line of credit is a loan which is similar to
a credit card. These often have a very low interest rate
(In most cases even lower than home equity loans).
Option One Mortgage
Loans - Getting an Option ARM or Option One Mortgage
Loan
Have you heard about or been interested in finding out more
about option one mortgage loans? They are becoming very
popular, but its important to understand how they work
before you apply for one. I will describe, in this article,
an overview of the most common type of option ARM mortgage
loan or option one mortgage loan.
Home Construction
Loans
You can maximize your savings by shopping for a lender that
can provide you with a combination loan. The combination
loan starts as a construction loan.
|
used office furnishings-supplies-equipment-desks-cubicles-service-counters for
sale in Akron Ohio
Die cast model cars for sale in Akron Ohio
used cars for sale in Akron Ohio
unfurnished homes for
rent in Akron Ohio
| first second
ARM compare rates find the best rates current in your area lenders read reviews calculator adjustable rate loan home lenders brokers
quotes florida houston gmac washington interest only 2nd software debt consolidation
reverse senior equity texas maryland options lending bad credit
option one ameriquest chase first banks emc residential california miami dallas est branch marketing
home company commercial yahoo online bad credit low credit no credit |
|
