Reverse Mortgages Promise Seniors Cash, Advisers Urge Caution,
Maurice Shapiro, a retiree from Miami Beach, Florida, is taking a cruise to Alaska this summer, a trip he says he never would have made without his reverse mortgage.
“I’ll be 81 in two weeks and life doesn’t go on forever,” he said. “I got a reverse mortgage and can do things I was never able to, like travel and set up college trusts for my grandnieces and grandnephews.”
Shapiro obtained a reverse mortgage from World Alliance Financial in Melville, New York. Reverse mortgages are for people aged at least 62. The loans, which lenders charge fees equal to as much as 6 percent of a home’s value, allow (more…)
Written by News & Feeds on June 30th, 2008 with no comments.
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San Diego Reverse Mortgage
The principle behind reverse mortgage is practically the same all over the world. There are however, slight variations in miscellaneous details per country, per state and even per county. A good example of variation would be the interest rates as mandated by law per country. There may also be additional charges given off by different states and counties. So if you are indeed looking for a lending establishment that can afford you loans regarding reverse mortgages, it would be best if you could look into those aforementioned establishments within the city or county where your house is located. You house is the integral part to this equation, because you are actually trying to get a loan using your home equity.
Now in San Diego, the domiciles that can be used as collateral for reverse mortgages can be a condo unit, a single-family house, a townhouse unit and even home units in planned urban living developments. In special cases, even leasehold properties and a few properties held under a trust’s name are also (more…)
Written by charles dennis on June 16th, 2008 with no comments.
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Some say reverse mortgages are the way to go,
Delaware Online, 2008
Plan may be solution for older borrowers whose assets are dwindling, but experts say beware.
Jane DelSordo has been so happy with her reverse mortgage from WSFS Bank that she agreed to appear in the bank’s newspaper ads.
The
73-year-old, who paid cash for her Chadds Ford, Pa., town home in 1987
after selling property from a divorce, said she did her homework before
signing the papers about a year ago.
The
loan would eliminate her payments of about $1,000 a month on
outstanding debts, and still give her enough to renovate the entire
house — including new windows, a new heater, and a hot tub downstairs.
“Basically,
I’m spending my house, instead of spending my savings — which are
limited,” DelSordo says. She still has more than $100,000 in home
equity to tap as long as she lives in her home, she says. And the
balance she owes will never grow beyond the value of her house.
“This
is like a lottery ticket,” she told the bank. “I win or you win. If I
die, you win. But if I live … I can be living here for nothing.”
DelSordo
is one of more than 393,500 homeowners who have taken out a reverse
mortgage since the product came out nearly two decades ago.
A
reverse mortgage is essentially a home equity loan for older borrowers.
The most common type of reverse mortgage, which also has the most
consumer protections, is the Home Equity Conversion Mortgage (or HECM),
insured by the Federal Housing Administration.
Offered
to homeowners 62 or older, the loans allow seniors to convert part of
their home equity into tax-free income without selling their home or
giving up the title.
The
amount a borrower receives depends on the homeowner’s age, the amount
of equity in the home and the interest rate. Homeowners can take the
money in a lump-sum payment, an income stream, a line of credit, or a
combination of the three. More than 60 percent of borrowers choose the
line of credit, according to the National Reverse Mortgage Lenders
Association.
Read more of this article
About Reverse Mortgages: Learn all about reverse mortgages at NewRetirement.com
,
Full post here NewRetirement Retirement News Digest : About Reverse Mortgages
Written by News & Feeds on June 12th, 2008 with no comments.
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From Kiplinger’s Personal Finance magazine, Kiplinger, 2008
When you shop for a reverse mortgage, lenders must give you the total
annual loan cost (TALC), the equivalent of an annual percentage rate.
But this doesn’t reflect how your pattern of withdrawals will affect
your total cost or the equity when the loan ends.
AARP
has developed a model that lets counselors and lenders give you a
customized analysis. Golden Gateway Financial, a reverse-mortgage
broker, has an online calculator that uses AARP’s model to let you
compare loans.
At GoldenGateway.com,
click on “Do the math.” Input your age, estimated home value and zip
code (to determine whether your home’s value exceeds the Federal
Housing Administration limit for your area). The program generates your
loan options, which you can sort by loan limit or by interest rate.
The table below summarizes the results in March for a homeowner in
northern Virginia whose home is worth $350,000 and who has a $50,000
mortgage balance. It assumes an upfront withdrawal of $50,000 to pay
off the mortgage. We ran the numbers two ways: with a loan term of 20
years for a 62-year-old and ten years for a 72-year-old.
Different ages, different payouts
| Age |
Loan term (yrs.) |
Initial loan limit |
Max. monthly payment |
Total cost |
Cash received |
Equity remaining |
| 62 |
20 |
$146,588 |
$676 |
$426,752 |
$262,240 |
$77,901 |
| 72 |
10 |
175,484 |
1,370 |
171,009 |
264,400 |
82,676 |
Interest. Most lenders charge a variable rate based on the
one-year Constant Maturity Treasury or LIBOR index plus a margin of one
to one and a half percentage points. In March, lenders at Golden
Gateway offered rates ranging from 4.86% to 5.55%. The loan used in the
example had an initial rate of 5.28%.
Initial loan limit. This is based on your age (or that of the
youngest co-borrower), the value of your home and its location (see the
accompanying article). The older the borrower, the higher the limit.
Maximum monthly payment. This amount depends on how much you
initially withdraw as a lump sum or reserve for a line of credit. In
our example, the younger buyer qualifies for a much lower monthly
payout.
Total cost. In addition to interest, the lender can currently
charge up to 2% of the home’s value (or the FHA limit, whichever is
less) for the origination fee. Lenders can also charge for such things
as an appraisal and title search. Plus, you’ll pay a monthly servicing
fee of $30 to $35.
For the federally insured home equity conversion mortgage, you’ll
pay mortgage insurance of 2% of your home’s value upfront, plus 0.5%
added to the interest rate on your loan.
Equity remaining. This is the amount of equity you’re
projected to have left at the loan’s end. In the table, the younger
borrower’s remaining equity is only slightly lower because we assumed
4% per year annual appreciation — the historical average.
Full post here NewRetirement Retirement News Digest : About Reverse Mortgages
Written by News & Feeds on June 12th, 2008 with no comments.
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Risk Management In Untested Waters: Many See Reverse Mortgages As The Next Big Loan Product,
With America’s 78 million baby boomers just around the corner from retirement, the reverse-mortgage market is poised for explosive growth. But so is the market for risk management, because risk–particularly in the form of fraud–always “follows the money.” [??] Because seniors are frequently targeted for financial scams of all kinds, lenders hoping to tap into this lucrative market must begin to incorporate effective risk-management strategies now in order to stay one step ahead of the “perps.” This article briefly examines market demographics and program limitations, and then focuses on identifying and managing fraud risk.
How the program works
The primary advantage of a reverse mortgage is that it allows an owner to access accumulated home equity without having to sell the property or make monthly payments while living on a fixed income. With a longer lifespan, upheaval on Wall Street and the near-certainty of increasing medical costs making them uneasy, many soon-to-be-seniors are justifiably worried that they have not saved enough to live comfortably in their twilight years. Seniors will increasingly see reverse mortgages as a viable way to tap their home equity–currently estimated at $4 trillion, according to Washington, D.C.-based AARP–to close the retirement savings gap.
(more…)
Post from: Reverse Mortgage Loan Blog
Risk Management In Untested Waters: Many See Reverse Mortgages As The Next Big Loan Product
Full post here Reverse Mortgage Loan Blog
Written by News & Feeds on June 12th, 2008 with no comments.
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Get the Facts Before Choosing Reverse Mortgages,
With all the news about the housing crises, loan defaults and home foreclosures, borrowers are definitely becoming aware of the pitfalls of overextending themselves. I’m continuously receiving questions about the best way to approach a mortgage and how handling debt, particularly mortgage debt, fits into an overall financial plan.
One question that seems to be coming up more frequently is whether or not a reverse mortgage makes sense for older homeowners who want to increase their cash flow. Apparently, reverse mortgages - first introduced in 1988 - are becoming increasingly popular. According to an AARP study, consumer awareness is up and the median age for borrowers is down from 76 to 73. And as the boomer generation reaches 62, the age of eligibility, the market for reverse mortgages is expected to increase dramatically.
On the surface, a reverse mortgage can seem like a low-risk way for homeowners to tap into their equity for retirement needs, long-term care costs, or even to avoid foreclosure. Dig a little deeper and you’ll find that there are many factors to consider, from high fees to family inheritance issues. If you or someone you’re close to is thinking about a reverse mortgage, I strongly suggest you start with these general facts and carefully consider the pros and cons before making a decision.
(more…)
Post from: Reverse Mortgage Loan Blog
Get the Facts Before Choosing Reverse Mortgages
Full post here Reverse Mortgage Loan Blog
Written by News & Feeds on June 12th, 2008 with no comments.
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Brooklyn Reverse Mortgage
According to recent studies conducted in the Brooklyn area, an ever growing population of people is looking into reverse mortgage. Reverse mortgage, as we know, is a very unique type of home equity loan where lending companies actually pay the home owners a certain amount for subsistence, with the specified home acting as collateral – paying for “home equity” as it is called. The norm for reverse mortgage is: the more advanced in age the loan applicant is, the higher the amount for subsistence. However, it should be noted thought that subsistence is also dependent on the lending companies’ current rates.
According to these said studies, even home owner who are not yet of retirement age are already looking into various options that may become viable for them in the future; even checking and maintaining updates on interest trends when it comes to mortgages. This really means that home owners are already talking to lending (more…)
Written by charles dennis on June 6th, 2008 with no comments.
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The reverse mortgage market is on fire, and no where is that more apparent than in New York state. Below you will find a list of the top originating lenders for the first half of the year. (Source: HUDUSER.org)
| Top New York HECM Lenders |
HECM
Loans
2008 |
| WELLS FARGO BANK NA |
239 |
| M AND T BANK |
191 |
| WORLD ALLIANCE FINANCIAL CORP |
140 |
| FINANCIAL FREEDOM SENIOR FUNDI |
107 |
| EVERBANK REVERSE MORTGAGE LLC |
92 |
| UPSTATE CAPITAL INC |
87 |
| RESIDENTIAL EQUITY FUNDING COR |
72 |
| BEST INTEREST MORTGAGE CORP |
42 |
| COMMUNITY HOME EQU CONV CORP |
41 |
| FAST TRACK FUNDING CORP |
37 |
| AGENCY FOR CONSUMER EQUITY MOR |
36 |
| CAMBRIDGE HOME CAPITAL LLC |
30 |
| COUNTRYWIDE BANK FSB |
30 |
| UNITED MORTGAGE CORP |
28 |
| SOMERSET INVESTORS CORP |
24 |
| FIRST MARINER BANK |
22 |
| ALBANY MORTGAGE GROUP INC |
22 |
| GUARDIAN FIRST FUNDING GROUP L |
21 |
| USA FINANCIAL RESOURCES INC |
18 |
| IDEAL MORTGAGE BANKERS |
13 |
| PACIFIC REVERSE MORTGAGE INC |
13 |
| MCS MORTGAGE BANKERS INC |
12 |
| UNITED NORTHERN MORTGAGE BANKE |
12 |
| ADVANCED FUNDING SOLUTIONS INC |
11 |
| CONTINENTAL HOME LOANS INC |
10 |
Written by charles dennis on June 5th, 2008 with no comments.
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Queens, New York Reverse Mortgage
The reverse mortgage has always been a particularly attractive lending option with which many home owners in their twilight years have found favorable. All over the US, there is an increase of reverse mortgage applications. According to the National Reverse Mortgage Lenders Association or NRMLA, the trend is only escalating. The year 2005 saw about 30,404 loans being endorsed in the first 9 months of the fiscal year; the next year, an estimated 55,659 loans were officially endorsed. That’s almost an estimated 83% rise in the conservative numbers race.
NRMLA can only predict that with the coming of 2008, and due greatly to the aggressive marketing strategies being issue now by many private lending companies offering reverse mortgage loans, there will be more than 100% jump in number of home owners (more…)
Written by charles dennis on June 5th, 2008 with no comments.
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MELVILLE, N.Y., June 3 /PRNewswire/ — Lender Lead Solutions, the wholesale division of World Alliance Financial Corp., an industry leader in reverse mortgages, announced today that it has begun adopting the National Reverse Mortgage Lender Association’s (NRMLA) formal Code of Ethics and Ethics Advisory Opinion 2008-1 and 2008-2 for its members. Together these policies elevate and promote the needs of seniors above all else in discussions about reverse mortgages and clearly define standards for ethical advertising, marketing and interacting with seniors. Effective today, the company is requiring that all new members sign an agreement to abide by these policies before beginning a business relationship. All existing members will be required to sign off on an addendum by July 3, 2008.
Lender Lead Solutions has made serving seniors with professionalism and integrity its trademark. The company will now require that each member commit to the Code of Ethics and Ethics Advisory Opinions brought forth by NRMLA. Included in the terms of the Code of Ethics agreement are guidelines and requirements that members only sell products that meet and are in accordance with the best interests of the borrower. The Code of Ethics also ensures prospective borrowers fully understand every aspect and detail of the reverse mortgage they are purchasing.
Additionally, all members will be required to adhere to the guidelines listed in the NRMLA Ethics Advisory Opinion 2008-1 and 2008-2, which addresses ethical advertising and marketing of reverse mortgage products. (more…)
Written by charles dennis on June 5th, 2008 with no comments.
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