What A Reverse Mortgage Calculator Won’t Tell You,
While a free reverse mortgage calculator might be able to give you an idea of how much you could borrow, none will be able to tell you something that is far more important, and that is how much equity will be left in your home after a period of years. It’s crucial you are aware of this before you make any decision on whether to opt for this type of loan.
There are a number of calculators to be found online. However, you may find that the amounts illustrated differ from one website to another, even when the same dates and amounts are entered. If you are going to opt for either a Fannie Mae or FHA reverse mortgage, then the best (and free) reverse mortgage calculator can be found at either the AARP or National Reverse Mortgage Lenders Association (NRMLA) websites. Both are accurate, display identical figures and display most of the crucial information, such as how much you’d receive as a fixed monthly payment, a line of credit (and how much that line of credit would appreciate over 5 and 10 years for the FHA program) or how much you’d receive as a one-off lump sum.
Rebounding from four consecutive months of below average performance, the number of HECM reverse mortgages originated rebounded in January posting the fourth best monthly performance on record. The 9,957 HECM’s approved in January represented a 24% increase over the 8,007 HECMs endorsed in the prior month (December 2007) and a 13% jump over the 8,824 endorsements made in January 2007.
January’s strong numbers represent the first time in four months that monthly performance has exceeded the “12-month moving average”. This is significant since it may indicate a reversal of declining growth spurred by the subprime/housing market crisis. Borrowers may be realizing that if we are in for a long period of housing price decline, it may be wise to “lock-in” value now by taking out a reverse mortgage at the extremely low HECM interest rates that are now available.
On an annualized basis, 109,426 HECMs were endorsed in the twelve months ended January 2008 - the best twelve month period ever for HECM reverse mortgages. The twelve month figures through January 2008 represent a 23% increase over the 88,906 HECM endorsed during the twelve months ended January 2007.
Although competition is big for the senior reverse mortgage industry, there are still companies that are finding ways to squeeze more fees from their senior clientèle. I strongly believe companies that are looking to corner the market such as Bank of America and their soon to be acquired subsidiary Countrywide Home Loans, will find their numbers higher as they look to constantly lower rates in an effort to make their money from servicing and creating banking relationships. The Chicago Tribune, writes that
A reverse mortgage can be a financial lifeline, but consumer advocates are worried that some people are taking them out with too many strings attached.
Some lenders inappropriately push older homeowners to the products or sell them additional high-cost annuities, a new AARP survey claims. And some experts say (more…)
From 2001-2008 California is no rookie when it comes to getting reverese mortgages completed. In fact they lead the country. Below you will find data through 2008.
Check the fine print when getting a reverse mortgage,
About a third of the people Buz Zeman counsels about reverse mortgages decide they’re the best deal they’ve ever seen. Another third think they’re the worst.
The rest tend to think a reverse mortgage might be a good option, but only after they’ve used up other resources, he said.
“It’s a very individual decision,” said Zeman, director of Housing Options Provided for the Elderly, one of four agencies in the St. Louis area that the Department of Housing and Urban Development lists as qualified to provide counseling for those considering a reverse mortgage.
Zeman says counseling is key because the mortgages can be complicated and, in some cases, costly. Unfortunately, a dearth of qualified counselors has prompted some lenders to refer clients to counselors accessible only by phone or online.
