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Is A Reverse Mortgage Right For You?
from:A reverse mortgage is the exact opposite of a traditional mortgage. Instead of you paying the bank to live in the house, the bank pays you to live in it. This may seem a bad deal for the bank, but there are a lot of reasons why a bank will allow a reverse mortgage. Typically a reverse mortgage is only approved for someone 62 or more years of age that has paid off his or her original mortgage. With all that equity in the home, the senior sitting in it might want to stay in the home but face additional expenses in medical or living costs that they can’t cover. Instead of selling the home and downsizing, they may choose to do a reverse mortgage with a bank instead thus allowing them to remain in the home.
How It Works
The reverse mortgage is a little more complex to close than a traditional mortgage. There are a number of different rules surrounding this type of mortgage loan. The age limit is one barrier and also the condition of the home may be another. The home has to be in good condition, free of major faults, before the bank considers doing this type of mortgage. Closing costs are significantly higher than the traditional loans and fees can also eat into equity. However, the upside is that you can get a disbursement of cash to help you pay immediate expenses while not having to vacate your home. This cash can come as a lump sum, a monthly payment, or even a credit line. The terms of the loan may differ with the bank involved and you should check to see what happens if you eventually sell the home instead of staying in it until you die.
The Potential Negatives
Seniors are targeted by unscrupulous lenders with predatory lending practices that can include a high fee reverse mortgage. Most lenders will be asked to undergo counseling before they take out a reverse mortgage, but that might not be enough to assess whether the mortgage is what you need at this point in your life. As always, if you aren’t certain of what you are signing, don’t sign. Instead, try to review the documents with someone who is knowledgeable and can answer any questions you might have about this type of mortgage. There are some downsides to a reverse mortgage. They can impact your ability to receive Medicaid benefits and government financial assistance. So, be sure to not only look at the terms of the mortgage but also check with your local government offices to see if the mortgage product might actually reduce your income instead of increasing it, due to the offset of benefits.
Mortgage Interest Rates News
UK Lending Drops as Recession, Interest Rates Take Toll - Wall Street Journal
UK Lending Drops as Recession, Interest Rates Take Toll Wall Street Journal By Ilona Billington LONDON (Dow Jones)--Mortgage and business lending in the UK dropped in April as the slowing economy, rising interest rates and growing concern over Greece's future in the euro zone damped demand, and after a tax break for first-time ... |
Real estate industry pushes Senate on refi bill - MarketWatch
 Washington Times | Real estate industry pushes Senate on refi bill MarketWatch WASHINGTON (MarketWatch) — Real estate and mortgage industry leaders urged a Senate committee on Thursday to back a plan that would lower interest rates for homeowners with government-owned mortgages. Appearing before the Senate Banking Committee, ... Push intensifies to pass home-loan refinancing bill Mortgage Q&A: Borrowers hit by mess others made HARP 2.0: Good News For Home Owners Who Are Upside Down |
30-year mortgage rate hits another record low - KETK
 International Business Times | 30-year mortgage rate hits another record low KETK NEW YORK (CNNMoney) — Buying a home got even cheaper this week as interest rates on the 30-year fixed-rate mortgage set a record low for the fourth week in a row. The 30-year fixed mortgage, the most popular mortgage product, dipped slightly to 3.78% ... What it takes to buy a home Freddie Mac: 30-year mortgage rate down a tick at 3.78% Record-Low Mortgage Rates - Are They Hurting US Housing Market? |
Mortgage Rates: Low Mortgage Rates Attracting Borrowers to Mortgage Refinances - FreeRateUpdate.com
 Eastern Morning Herald | Mortgage Rates: Low Mortgage Rates Attracting Borrowers to Mortgage Refinances FreeRateUpdate.com Current 30 year fixed mortgage rates are at 3.375%, 15 year fixed mortgage interest rates are at 2.750% and 5/1 ARM loan rates are at 2.125%. These low conforming mortgage rates, which are available with 0.7 to 1% origination fee, can be obtained by ... Mortgage comparison-shopping: How to read good faith estimate Even Lower Interest Rates Keep Refi's Rolling Bankrate: Mortgage Rates Hold at Record Lows |
BMO Bank of Montreal Decreases Mortgage Rates - SYS-CON Media (press release)
 Toronto Star | BMO Bank of Montreal Decreases Mortgage Rates SYS-CON Media (press release) "BMO continues to encourage Canadian homeowners to take on a mortgage amortization of 25 years or less. Shortening the amount of time you carry mortgage debt should be a priority for any homeowner, as it saves thousands of dollars in interest rates ... TD Canada Trust changes residential mortgage rates RBC trims five-year mortgage rate OECD urges higher interest rates for Canada |