Is Refinancing A Reverse Mortgage Possible?

A reverse mortgage can provide homeowners who are at least 62 years old access to home equity. Just like a traditional mortgage, a reverse mortgage could be refinanced, and this move sometimes makes more sense.

Understanding Reverse Mortgages

A reverse mortgage is a type of loan that lets older borrowers tap into their home equity. Unlike a conventional mortgage, which asks the borrowers to pay a lender, a reverse mortgage requires the lender to make pay the borrower regularly.

Interest will accrue on the reverse mortgage loan with the repayment on the principal loan and interest deferred until you pass away, move out, or sell the home. This could be helpful in terms of supplementing your retirement income. However, it deducts equity from your house.

Types of Reverse Mortgages

There are a few types of reverse mortgages.

HECMs or Home Equity Conversion Mortgages – insured by the FHA or Federal Housing Administration. If you are looking to buy a new home then you should consider HECM for Purchase mortgages.

Proprietary Reverse Mortgages – similar to HECMs. The main difference is that they are not insured by the government.

Single Purpose Reverse Mortgages – are used for a single purchase

How Does Reverse Mortgage Refinance Works?

Knowing the process involved in a reverse mortgage refinance is helpful regardless of the reason why you want to have one.

Refinancing a reverse mortgage loan is comparable to refinancing a traditional mortgage. Basically, you are replacing your reverse mortgage with a new, different, and better loan. The new one might have a different interest rate or provide a different monthly payout, based on the financing terms.

You need to meet a certain set of criteria if you wish to qualify for a reverse mortgage refinance. There should be a definitive advantage for a lender to justify refinancing the reverse mortgage of a lender. This rule was set in place by the National Reverse Mortgage Lenders Association.

The rule states that when a reverse mortgage is refinanced, the rise in the principal amount should be equal or more than five times the closing cost of the loan. The loan proceeds should be equal to ore above 5% of the amount that is being refinanced.

Apart from that, homeowners is required to meet a seasoning requirement, which refers to the duration when you’ve held the mortgage. You could refinance if it’s been at least 18 months since you closed your original reverse mortgage.

The borrower must also qualify for a new reverse mortgage in Greenville. Fortunately, the criteria that is used to determine if a borrower qualifies or not for a reverse mortgage is the same with the requirements for refinancing.

The borrower requirements for HECMs are as follows:

• -      At least 62 years old
• -      You are using your home as your primary residence
• -      You own the house or you have paid a significant amount of the original mortgage.
• -      Not being a delinquent on your federal debt

-      Have the ability to fulfill your financial obligations that are related to the house like homeowners insurance, property taxes, and homeowners association fees.

The property also needs to meet the requirements set by the FHA. Basically, it means the owner must occupy one unit of the house. There shouldn’t be any safety or health hazards and the owner should have flood insurance if the property is located in a high risk area.

Call Reverse Mortgage Specialist for more information about reverse mortgage refinancing.

David Stacey
Reverse Mortgage Specialist
Greenville, SC 29607
864 920 2733
http://reversemortgagegreenvillesc.com/

Michael Bloomberg Wants Reverse Mortgage Reforms

Billionaire and former New York Mayor Michael Bloomberg has decided to join the Democratic presidential primary. His decision and what he plans to do has made the headlines in recent weeks. However, there’s one thing that’s not getting that much attention and it involves his plan to enhance American’s retirement security. One of the primary topics he touched was reverse mortgage.

Proposed Reverse Mortgage Reforms

Minimum social security benefit

Bloomberg wants to add a new minimum social security benefit that would increase the payouts for 10% of seniors along with a stronger calculation of the cost of living benefits so retirees would cope better with inflation.

Develop a public option retirement plan

Common retirement plans like 401(k)s or IRAs have limitations. Bloomberg wants to create a public option plan that offers automatic contributions for employees who are not participating in a pension or 401(k). It is still not clear whether or not the public option retirement plan is voluntary for those who don’t want to save in a different qualified retirement accounts.

Lower Medicare costs, expand the coverage

Michael Bloomberg also plans to cap the cost of medications for seniors who don’t have such protection. The cap on the out of pocket expenditures on medications will be about $2,000 per year. Bloomberg wants Medicare’s coverage to be expanded so it would include hearing devices, vision exams, and dental care.

Reverse Mortgage Reforms

Bloomberg’s plan noted that people have equity in their homes and it is often the largest asset that they have once they reach their retirement age. However, they often do not use it to supplement their income inretirement.

There are several reasons why seniors are reluctant to do and one of the most common ones is the cost. Equity release products are usually unappealing and expensive and those are a few things why seniors are the target of unscrupulous players.

Bloomberg wants to create more affordable and simpler loans that are just like today’s federally insured reverse mortgage loan, which is also known as the Home Equity Conversion Mortgage.

He also wants to have advisory services to enhance financial literacy and help seniors during financial problems. The plan also includes subsidizing loans for seniors who have low income but are still qualified and promoting state property tax deferral programs.

It is clear that Bloomberg has ambitious plans. He wants to focus on the frustrating issue of retirement income security that a lot of Americans are facing today.

Call Reverse Mortgage Specialist if you want to know if a reverse mortgage loan is the best option for you.

David Stacey
Reverse Mortgage Specialist
Greenville, SC 29607
864 920 2733
http://reversemortgagegreenvillesc.com/

A Guide To The Basics Of Reverse Mortgage

A reverse mortgage is a kind of loan that can give you cash by tapping into the equity of your home. It may lack some of the lower rates and flexibility of other kinds of loans, however, they could be a great option in the right circumstances like if you are not planning to move or you won’t be leaving your house to your heirs.

Understanding Reverse Mortgage

Just like a standard mortgage, a reverse mortgage loan will use your house as a collateral. This type of loan is different in many ways. First of all, you will receive money rather than pay money to your lender. Then, the loan amount will grow as time passes by, contrary to shrinking with every monthly payment you would make on a typical mortgage.

The idea works just like a home equity loan or second mortgage, however, reverse mortgages are just available to homeowners who are at least 62 years old. You won’t have to repay this loan unless you decide to move out or if you die.

There are several sources for a reverse mortgage loan but one great option is the Home Equity Conversion Mortgage or HECM, which is available through the Federal Housing Administration. It is much less expensive for borrowers because they are backed by the government. Plus the rules for this kind of loan make it consumer friendly.

How Much Money Will You Get?

The amount of cash you’ll get from a reverse mortgage loan will depend on your home equity and the age of the youngest borrower. The more equity you have in your house, the more money can get. For many borrowers, it is ideal if they’ve been regularly paying their loan over many years and their mortgage is almost totally paid off. The youngest borrower’s age on the loan will affect the amount that you get. Older reverse mortgage borrowers will get more cash. But you have to be careful especially if you are tempted not to include somebody younger so you could get money. A younger spouse need to move out once the older borrower dies in case the younger person is not included on the loan.

How To Get Loan Payments?

You have a lot of options when it comes to how you can get your reverse mortgage Greenville loan payments. You can take the money in a lump sum. If you take this option, your loan will have a fixed interest rate and your loan balance will continue to grow over time while the interest accrues.

The other option is periodic, regular payments like once a month. These payments are called tenure payments and they can last for your whole life or you can receive them for a specific duration like 10 years.

You could also go for a lineof credit instead of taking the cash right away. This will let you draw the funds in case you need them. One good thing about this option is that you will only pay the interest on the money that you have borrowed, and that means your credit line could grow as time goes by. You can also use a combination of options like a lump sum and a line of credit.

Call Reverse Mortgage Specialist if you wish to know if this type of loan is the most suitable option for you.

David Stacey
Reverse Mortgage Specialist
Greenville, SC 29607
864 920 2733
http://reversemortgagegreenvillesc.com/

Understanding Reverse Mortgages

In case you are at least 62 years old and you would like to have some cash to pay off your mortgage, have an additional source of income, or perhaps fun your healthcare expenses – you should consider taking out a reverse mortgage. It lets you convert a part of your home equity into cash without the need to sell your house or pay extra monthly bills.

But you should take your time. A reverse mortgage loan can be quite complicated and may not be the best option for you. It could use up your home equity, which means less assets for you and your estate. In case you want to look for one, check the different kinds of reverse mortgages and compare them before you choose a company.

Types of Reverse Mortgage

When you are considering if a reverse mortgage is the best one for you, additionally find out which of the three kinds of reverse mortgage that is suitable for your needs.

Single purpose reverse mortgages – they are the least expensive reverse mortgage loan option. They are provided by some location and state government agencies, and non-profit organizations, however, they are not offered everywhere. This type of loan can be used for a single purpose, which the lender will determine. For instance, the lender could say the loan would only be used for home improvements, repairs, or to settle property taxes. The majority of homeowners with moderate or low income could qualify for this type of loan.

Proprietary reverse mortgages – these are private loans that are supported by the companies that created them. In case you have a home with a higher value, you might be able to get a much bigger loan advance from this kind of proprietary reverse mortgage loan. Therefore, if your house has a higher appraised value and you’ve got a small mortgage, then you may be able to qualify for more funds.

Home Equity Conversion Mortgages (HECMs) – these are reverse mortgages that are insured federally and are backed by the HUD or the U.S. Department of Housing and Urban Development. You can use an HECM loan for any purpose you want.

Proprietary reverse mortgagas and HECMs are costlier than conventional home loans. Plus, the upfront costs could be high. This is one factor that you need to think about especially if you are planning to stay in your house for a shorter time or you just want to borrow a small amount. The amount you could borrow with these two types of loans will depend on various factors like your age, the kind of reverse mortgage that you choose, your home’s appraised value, current interest rates, and assessment of your ability and willingness to pay homeowner’s insurance and property taxes.

Payment Options

There are several payment options to choose from when it comes to the HECM. It could be a single disbursement option, a term option, a tenure option, a line of credit, or a mix of line credit and monthly payments.

Call Reverse Mortgage Specialist if you wish to learn more about the different types of reverse mortgage loans. 

David Stacey
Reverse Mortgage Specialist
Greenville, SC 29607
864 920 2733
http://reversemortgagegreenvillesc.com/

Will A Reverse Mortgage Affect Your Existing Loans and Benefits?

A reverse mortgage is one of the many options that can help increase the financial support of those who are already on their retirement age.

A reverse mortgage loan is also referred to as HECM or HomeEquity Conversion Mortgage. It allows seniors to convert their home’s value to funds or cash that could be used right away. This is a wonderful addition to other retirement alternatives for those who would like to increase their funds for expenses like home improvements or tours.

What Is A Reverse Mortgage Loan For?

A reverse mortgage loan isn’t necessarily meant for costly activities. Most borrowers use the reverse mortgage loan to fund their daily needs and help them live more comfortably. It is an excellent addition to Medicare and Social Security benefits.

There are a few who believe that reverse mortgage could affect their benefits they receive from the government like social security and healthcare. As a matter of fact, a reverse mortgage loan doesn’t affect your membership status with social security. But it will have a small impact on your Medicare benefits. In case the healthcare department can detect that you are getting a large amount of cash every month, then they may choose to lower you renumeration, or they could deny your Medicare application so they could accommodate the needs of other members.

There is something you can do in order to avoid this particular inconvenience. You can keep the loan’s proceeds in the bank since it would be misconstrued as your asset. Keep in mind that the purpose of a reverse mortgage is to finance your expenses, and it is expected that the monthly amortization is going to be spent in the same calendar month. In case the money is spent right away, it won’t have an impact on your Medicare standing.

In case you are considering a reverse mortgage Greenville even if you have a current mortgage in your name, the reverse mortgage should be your primary loan. In case the eligible amount of the equity of your home is enough to cover your outstanding loan, then you can proceed with the reverse mortgage loan. It’s also helpful to remember that the difference between your existing loan as well as the reverse mortgage proceeds should leave you with sufficient funds, because if not, it could cost you so much more.

Because even then, you entire reverse mortgage loan would be used up. You won’t receive monthly payments anymore and if the left over cash is found to be too little then you may wind up in a difficult financial situation in the future. It’s also possible to make use of the whole loan amount to pay off your current debt and if still not enough, you can use your personal savings to pay for the remainder of the loan.

Even though it’s possible, it’s advised not depend on reverse mortgage to pay off your outstanding debts if you could find other sources of money like investments and retirement accounts. Reverse mortgage loan Greenville would be effective for real expenses instead of debt payment due to the ceiling of the amount that you could borrow.

Call Reverse Mortgage Specialist if you wish to learn more about reverse mortgage loans.

David Stacey
Reverse Mortgage Specialist
Greenville, SC 29607
864 920 2733
http://reversemortgagegreenvillesc.com/

All About Reverse Mortgage Interest Rates

There are different options about getting loans when you are at a point in your life where you have to make ends meet. Several options are offered by the majority of them, there are stringent requires in order to be eligible for the grant. The commonly depend on the borrower’s credit score and his or her capacity to pay. However, one kind of mortgage is different and many people, particularly seniors, opt for this type of loan. It is called reverse mortgage. Just like its name suggests, reverse mortgages work the other way around when compared to conventional loans. You are not the one who will be making payments but you will be receiving them instead.

But not everyone could enjoy the advantages of reverse mortgage loans. Just the whole process of getting the mortgage could be quite confusing and could cost you more money especially if you have no idea about the basics. And most likely, one of the most important things that you must know about this type of loan is the interest rate that is involved.

Interest Rates: What Is The Best Offer?

Reverse mortgage specialists said that the interest rate of a reverse loan is based on several factors like your home’s appraisal value. And the rates differ from each lender. The usual rates begin at 2% of the home’s actual value where the equity will be drawn up against. However, this rate is just prevailing in the Federal Housing Administration grants. It could be much higher at other lending firms.

Adjustable and Fixed Reverse Mortgage Loan

Paying off the interest rates could also depend on whether you will choose a fixedor adjustable reverse mortgage. The first one won’t let you choose a single cash payment so you just have the credit lines or the monthly payments. And you need to pay the interest rates together with the monthly payments. It’s the opposite when it comes to an adjustable loan where you are allowed to choose from all the three kinds of payments. The average rate you’ll get is a bit above 6%.

Tips To Find A Lender With Better Interest Rates

If you would like to get a great reasonable interest rate then the best thing you should do is to shop around and then compare all the options you’ve obtained. You could perform an online search and find any reverse loan lender that is available in your area. Additionally, search for the lowest prevailing rates and don’t hesitate to bargain with your selected lender.

Online Reverse Mortgage Calculator

When you are researching online for the best reverse mortgage loan lender, make full use of the online rate calculators that are commonly available on the website of the lenders. You could use this to calculate the reverse mortgage loan that you could get based on your home’s appraisal value. You could compute the interest rate that you are going to pay just in case you could get a loan. This could be your guide when determining if a reverse mortgage loan is for you or not.

It is important to know the best interest rate since this is one of the most crucial factor that could make the reverse mortgage loanGreenville the worst type of loan for you, especially if you don’t know what it really is and if you fail to find the best rates for you.

Call Reverse Mortgage Specialist if you want to know the best interest rates for you.

David Stacey
Reverse Mortgage Specialist
Greenville, SC 29607
864 920 2733
http://reversemortgagegreenvillesc.com/

Debunking The Myths About Reverse Mortgage

There are several misconceptions circulating about reverse mortgages. Despite the suggestions from the America Association of Retired Persons, the concept of obtaining a reverse mortgage worry a lot of seniors. It’s even made worse by friends or family who say that reverse mortgages are bad without even presenting enough evidence to back up their claims.

The truth about the myths surrounding reverse mortgages.

Reverse mortgage lead to houses being taken away from the borrowing senior.

This is one of the most common misconception about this kind of mortgage loan. This is not true. As a matter of fact, the senior borrower would continue to have ownership of the house that’s under the reverse mortgage program. This homeownership is made much more secured by the lien that’s placed upon the property, just like any other type of mortgage. It will guarantee that the lender would also be repaired form the owed amount, getting rid of the threat of the house getting removed from the senior borrower.

Since the majority of reverse mortgages are FederalHousing Administration Home Equity Conversion Mortgage (HECM) types. The US government guarantees full protection by using the mandatory 3% insurance fee that’s payable on all the FHA reverse mortgages.

The other types of reverse mortgages are referred to as Proprietary Reverse Mortgage and the Federal National Mortgage Association. These are guaranteed and safe by the private lenders.

Reverse Mortgage Is Costlier Than Other Types of Mortgages

This is not true. The closing cost of a reverse mortgage is only 1% higher than an FHA mortgage when obtained on the exact same property. Traditional mortgages tend to charge at least 2%.

The interest rate also plays a crucial role. Although the prime rates are used by conventional mortgages as their base, the FHA reverse mortgage interest rate will depend on the one year UnitedStates Treasury Note. This simply implies that the interest rate made through the reverse mortgage is way lower than a conventional mortgage.

The Home Will Be Given To The Lender Once The Borrower Dies

It is not true that the lender will take your home once you die or if you decide to relocate or sell the house. It actually follows the exact same procedure as a typical mortgage where the home equity goes to the heirs of the borrowers or the estate.

A reverse mortgage loan will have the estate pay the reverse mortgage lender the home value during the time of repayment. The exact same thing will apply in the case of significant decrease in the home value or when the borrower will reach extreme old age.

Tax Can Be Imposed On A Reverse Mortgage

It’s also not true that tax can be imposed on a reverse mortgage loan and that health insurance and Social security will be affected by the loan terms. Always remember that a reverse mortgage is a loan and not an income.

In case you need to know more about reverse mortgages and the benefits it has to offer, call Reverse Mortgage Specialist now.

David Stacey
Reverse Mortgage Specialist
Greenville, SC 29607
864 920 2733
http://reversemortgagegreenvillesc.com/