Will the New fixed-rate Reverse Mortgage work for you?

I have been doing reverse mortgages since the early nineties and almost from the start I have heard the question "Are they going to come out with a fixed rate reverse mortgage"?. Well the day is finally here, the fixed-rate has arrived and a new question is.

Will it work for you?

There are a few things you should know about the fixed-rate reverse mortgage Let me explain.

With a fixed rate reverse mortgage you have to do something that I've never recommend when a reverse mortgage is being considered and that is to take all the funds out at closing. I normally recommend the credit line because of its growth rate and when the funds are in the credit line they are not affecting the home equity. With the credit line the money is available when needed and safe.

With considerations for the fixed-rate reverse mortgage all of the funds have to be taken out at closing in order to get the lowest fixed-rate.

This now puts a senior in charge of finding a safe place to put the money so there's little or no chance of losing it. You can see at this point that this can be a problem because there's always someone out there wanting to invest your money. The fixed-rate mortgage works best when there's an existing forward mortgage to be paid off that is close to the entitlement derived from the reverse mortgage

Let me give you an example

If the customer is 66 years of age and the home is worth $200,000 with an existing forward mortgage of $90,000 the estimated entitlement would be approximately $100,000 the reverse mortgage would pay off the $90,000 forward mortgage and the senior would only have to contend with investing the $10,000. This could be done with a CD or some other secured instrument. At that point there would be no more payments to be made on the forward mortgage and the interest rate on the reverse mortgage is fixed.

In contrast, if the same 66-year-old were to do a HECM100 reverse mortgage the forward mortgage would be paid off and there would be a surplus or a credit line available of approximately $25,000. If this was left in the credit line the availability would grow each year. So not only is the interest rate lower on the adjustable reverse mortgage at this time the money available is increased also.

With reverse mortgage interest rates at an all-time low and the new LIBOR based reverse mortgages now available, unless there is an existing forward mortgage to be paid off or other large debt that needs to be handled, the fixed-rate in my opinion does not appear to be a good choice.

By Jim Saeger Reverse Mortgage Specialist MyFloridaReverse.com

About Author

I have been helping Seniors with Reverse Mortgages since the earily 90's and I am presently with Financial Freedom the leading Reverse Mortgage company in the United States.

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Dreams Can Be Fulfilled Through Fixed Rate Mortgage Quotes

By Rony Walker

Starting your own family can be a fulfilling experience. Seeing your kids grow up to become happy and well-meaning individuals are just some of the things parents always wish for. Living in an apartment is alright for small families with a kid or two. But kids will not remain as they are and they will definitely grow up sooner than you think. So you think of getting a loan to buy your growing family a home they deserve. Availing of a fixed rate mortgage quote will be a great initial step in fulfilling your life-long dream of owning a decent house for your family.

Why Rent When You Can Own?

You might not know it but owning a home has absolutely more benefits than renting. For one, the pride of owning your own home is incomparable. It is a good investment because you do not have to pay someone monthly for the rent. Also, think about the privacy of your family too. You would not have to worry about those eerie noises you hear at night from that guy who lives above your rented flat. It is also much safer for your family members because they would not have to deal with some annoying tenants that live with you. The freedom to do what you want is also immense. You can even choose to take in a pet Shitzhu for your daughter without anyone complaining about their allergies to dogs. Most of all, you will be relieved of too much expenses. It is said that the current fixed rate mortgage quote available, owning a home, as compared to renting, would save you up to 33% of your income each year.

Owning Will Save You Money!

It doesn’t take an experienced economist to determine all these savings. First, you should calculate what price range of home you can afford. This will help you carry out your house hunt with realistic expectations. One tip is to determine how much mortgage you could afford each month. This will also determine how much money the bank will allow you to borrow. Getting a fixed rate mortgage quote from banks will do that trick. In this way, you could make sure that you are getting the best deal out of the fixed rate mortgage quote available in your area.

If you think that you already obtained an affordable fixed rate mortgage quote, you can calculate everything for yourself by subtracting all your non-housing monthly debts and expenses. These things will include credit card and loan payments, tuition, transportation, food and clothing that would be deducted from your monthly income. Next is to calculate how much of your income is left for housing expenses, including mortgage payments, real estate taxes, and insurance premiums. This will make you realize that owning a home is more economically-sound than renting. With all the savings each year, you could channel this “purchasing power” to other endeavors like buying your family new furniture or better yet afford a family vacation in the Bahamas!

Remember, your financial freedom could start by making a simple fixed rate mortgage quote. If you think your family deserves better living conditions than that cramped apartment space you’re renting, do not waste time in making your wife, kids and yourself proud in fulfilling your dreams.

Want to learn more about fixed rate mortgage quotes? Find out more information about Arizona home equity loans and California home mortgage lenders when you visit http://Whataboutloans.com today!

Article Source: http://EzineArticles.com/?expert=Rony_Walker

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Which Mortgage is Right for You?

By Terry A Smith

Buying your first home can seem very intimidating, Buying your first home can seem intimidating when you are challenged by many different loan types What mortgage is right for you? Its even harder when you have bad credit. In this article we are going to go over the different types of home mortgages.

First there are the fixed rate home mortgages. This is when the Interest rate & monthly payment stay the same for the complete period of the loan. You want to get this loan if you are looking to live on a property for 10 years or more and if you have payment stability. Another type is the 5/25 2-step this is when Interest rate & monthly payment stays the same for 5 years. On the sixth year, the interest rate is changed to reflect the existing interest rates. The final payment will stay the same for the rest of the loan. This is good if you plan on living on the property for seven years.

There is also the 5 year balloon mortgage, The Interest rate & monthly payment remain the same for 5 years , when the 5 years is done the loan is due in full. The borrower has to refinance into new loans at existing interest rates. This is good if you plan on living on the property for 5 years and are willing to refinance.

Another type is the 3/3 & 3/1 year adjustable rate mortgages. This ones interest rate and monthly payment stay the same for 3 years. The 4th year, the interest rate adjusts every 3 years (for 3/3 ) and every year (for 3/1 ). This is good for people who plan to live on a property for more than 3 years and can deal with later changes.

Some other types of mortgage loans are 1 year adjustable rate mortgages these are risky. This is when the interest rate is changed every year, so monthly payment will change every year for entire 30 year loan term. This is a good choice for people who want to take advantage of the lowest rate possible and for people with bad credit and do not qualify for the higher programs. Here are some mortgage loan options for different kinds of people, if your stuck here go seek professional help.

I am the owner of http://freecreditinfo.biz I've been doing research on mortgages for over 4 years

Article Source: http://EzineArticles.com/?expert=Terry_A_Smith

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