If you are a home owner, aged 62 or older, with a good amount of equity you have the opportunity to use a reverse mortgage to solve a financial problem.
It is definitely case by case in terms of whether the reverse mortgage is the right decision. For many it certainly is.
These days people are using the reverse mortgage to pay off a forward mortgage to eliminate the mortgage payment, supplementing income, paying off medical bills, and for extra money for leisure activities.
Reverse mortgage numbers set a record every year. It shouldn't come as any surprise with the ever-rising cost of living. Borrowers have the opportunity to get out of their problem and still keep their name on title.
Additionally, interest rates are very competitive. Traditional mortgages have interest rates just barely better than the reverse.
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.
Put your calculator to given home value and these costs are fairly hefty.
The reverse mortgage is a great mortgage except for the costs. As such one must be thoughtful before going forward with this.
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.
You will notice the further you get away from closing the cheaper the loan actually becomes.
The idea is to give you real data to help you determine, based upon the actual costs, if the reverse mortgage is for you.
It is definitely case by case in terms of whether the reverse mortgage is the right decision. For many it certainly is.
These days people are using the reverse mortgage to pay off a forward mortgage to eliminate the mortgage payment, supplementing income, paying off medical bills, and for extra money for leisure activities.
Reverse mortgage numbers set a record every year. It shouldn't come as any surprise with the ever-rising cost of living. Borrowers have the opportunity to get out of their problem and still keep their name on title.
Additionally, interest rates are very competitive. Traditional mortgages have interest rates just barely better than the reverse.
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.
Put your calculator to given home value and these costs are fairly hefty.
The reverse mortgage is a great mortgage except for the costs. As such one must be thoughtful before going forward with this.
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.
You will notice the further you get away from closing the cheaper the loan actually becomes.
The idea is to give you real data to help you determine, based upon the actual costs, if the reverse mortgage is for you.
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