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.
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.
Why the reverse mortgage? Because people can use the equity in their homes they've built up for years to solve a financial issue, keep title the property, and never make periodic payments to the mortgage company.
Furthermore both the fixed and adjustable rate products for reverse mortgages rival those charged for traditional forward mortgages.
You can look at the reverse mortgage from a bird's eye view and tell it is pretty strong. That doesn't mean it is all good. It certainly is not.
To put it bluntly reverse mortgage closing costs are quite high.
Why would that be?
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.
Do some basic math and you can see how quickly the costs can add up.
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 document will show annualized costs over various years in the future.
As the loan ages it will become clear to you that the annualized cost goes down over time.
Because the upfront costs are high this document should help you determine if the reverse mortgage is truly a viable option 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.
Why the reverse mortgage? Because people can use the equity in their homes they've built up for years to solve a financial issue, keep title the property, and never make periodic payments to the mortgage company.
Furthermore both the fixed and adjustable rate products for reverse mortgages rival those charged for traditional forward mortgages.
You can look at the reverse mortgage from a bird's eye view and tell it is pretty strong. That doesn't mean it is all good. It certainly is not.
To put it bluntly reverse mortgage closing costs are quite high.
Why would that be?
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.
Do some basic math and you can see how quickly the costs can add up.
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 document will show annualized costs over various years in the future.
As the loan ages it will become clear to you that the annualized cost goes down over time.
Because the upfront costs are high this document should help you determine if the reverse mortgage is truly a viable option for you.
About the Author:
I'm guessing you want more California reverse mortgage information. Don't mess around. Click on that link. Go here too You can pick up an excellent guide to the California reverse mortgage here.
No comments:
Post a Comment