I have watched reverse mortgage points and fees decline in the most recent year but they are still the most expensive loan outside of private money for borrowers with standard credit and income.  The Motley Fool, reports.

They’re not always a good deal. The points and fees they charge can be fairly high, and their interest rates can be considerably higher than those for regular mortgages. The cash flow you can expect from a reverse mortgage is determined by your home’s value, your age and interest rates. Those 62 years old or older, with little or no debt, stand to benefit the most from reverse mortgages. Loan programs vary widely in what they offer, so shopping around is critical. Retiring the debt usually means selling the home — often upon the death of the borrower — unless the heirs can cough up the repayment.  Full Article

Speak with a HUD approved reverse mortgage counselor. The counselor will help you understand reverse mortgages and help you evaluate your situation.

Obtain several offers from (more…)

Larger payments, not biweekly ones, are the key

Tuesday, September 11, 2007

DEAR BOB: I have frequently heard if your mortgage calls for monthly payments, you can make a significant interest savings if you pay twice monthly. For example, my mortgage payment is due on the first day of each month. I would like to pay half of my monthly payment 15 days before the due date and the remainder on the due date. But my lender says the only way I can do this is through a third-party company, which will then charge me a sign-up fee of several hundred dollars plus a monthly fee. If I just pay the lender twice a month doesn’t the lender have to accept my payments and credit my account when received and then calculate the interest based on my payments? –Arthur L.

DEAR ARTHUR: No. You’ve been (more…)

Local banks and mortgage companies are pushing a unique mortgage loan that sounds more like you just won the lottery.

Instead of making monthly payments, you receive monthly payments and you don’t have to pay it back until you sell you home. It’s called a reverse mortgage.

But proceed with caution.

Reverse mortgages have been around for some time, but they’re being heavily market right now, in part because of all the long-time homeowners who are sitting on a gold mine in equity.
The loans are marketed to homeowners who may have limited income, but a wealth of equity in their homes. You must be at least 62 years old.

Here’s how it works.

Say you have $100,000 in equity in your home.

You can take out $50,000 - or any amount you choose - and pay nothing back for as long as you live in the house.

Read the Rest

Pennsylvania’s top reverse mortgage lenders thru April 2007 according to American Community Survey. The following table shows Pennsylvania’s top 10 originators of HUD HECM (Reverse Mortgage) loans.