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13May

A Guide to Selecting the Best Reverse Mortgage Lender

This article, which is a guide to selecting the best reverse mortgage lender, is an excellent asset to ensure the best financial decisions are made. An unscrupulous or inexperienced lender can lead their clients to financial peril — something that keeps the specialists from our company up late at night. Through hard work, we’re dedicated to making the decision of a reverse mortgage simple and easy for our clients to ensure they are able to obtain the capital infusion they need. ..Read More>>

04May

Reverse Mortgages Provides Cash Infusions for Seniors

Do you need more money?

Many seniors over the age of 62 often find themselves in a situation where they are house rich but cash poor. Thereby seeking the financial tool known as a reverse mortgage. Reverse mortgages provides cash infusions for seniors. The most common American dream is to have a family and to own a home for the family to live in. The traditional mortgage has been known to make this dream a possibility, which is similar to a reverse mortgage. Historically, home values increase over the lift of their ownership, making them an excellent investment. ..Read More>>

25Apr

Reverse Mortgage Line of Credit vs Home Equity Line of Credit

For many homeowners over the age of 62, money usually only goes out and rarely comes in. There are miscellaneous expenses that must be paid, such as food to consume and property taxes; and there are other expenses, such as traveling to see your grandchildren and paying off medical expenses.

However, there is an excellent financial product that allows money to come in, which is a reverse mortgage. A reverse mortgage allows seniors over the age of 62 to tap into their home equity without having to go through the tedious process of moving from or selling the home. ..Read More>>

20Apr

What Happens When a Reverse Mortgage Comes Due?

A reverse mortgage is a financial product that has been known to add a lot of value to the recipients who engage in one. These can add income to seniors who have little financial assets available to support themselves. Working with a reputable company, like Shop Reverse Mortgage, ensures that you are not taken advantage of and have the most favorable terms when money is allocated to your account. ..Read More>>

10Apr

Why a Reverse Mortgage is an Excellent Financial Product

When you’re wondering how the neighbors across the street just purchased a new car, despite having visited the hospital for a lengthy period recently, chances are they have obtained a capital infusion from a reverse mortgage.

A reverse mortgage is an excellent financial product that millions of Americans have already utilized. It is a financial product that takes into account positive past decisions. For many, in order to own a home, it requires a determination to see and property and declare it a good investment. Having done that, the future homeowner often reaches out to a lender to obtain a traditional mortgage. ..Read More>>

07Apr

Key Questions to Ask About Reverse Mortgages

Have questions about a reverse mortgage? This article addresses key questions to that are often asked about reverse mortgages. Our company, Shop Reverse Mortgages, is adamant about customer service and satisfaction because we view each as paramount to our long-term success. It is important that you understand the reverse mortgage process before initiating into it.

What is a reverse mortgage loan?

A reverse mortgage is an accessible financial instrument for seniors age 62-years or older who own a majority or all of the equity in their home. Basically, how a reverse mortgage works is that it allows the exchange of money for the equity in the person’s home. A reverse mortgage allows seniors to access the equity in their home until they (1) decide to sell the home; (2) move to a different location for more than 12 months; or, (3) when they become deceased. At any of the three points, the person is required to repay the loan, which includes the amount originally disbursed plus the interest and additional charges and fees. ..Read More>>

02Apr

Reverse Mortgage Appraisal Frequently Asked Questions

An appraisal on your property to secure a reverse mortgage can be confusing. There is a lot of jargon that isn’t explained and specific requirements that must be done from the appraiser. Our company, Shop Reverse Mortgage, understands this and seeks to make the appraisal process easy and painless for our customers.

To take a step back, a reverse mortgage is a retirement tool for seniors over the age of 62. This financial product is useful for seniors because often times seniors will find themselves to be cash poor but house rich. This is because over the course of their traditional mortgage, the person or couple have built up significant equity in their home over the course of multiple years, usually between 15 to 30. ..Read More>>

29Mar

How to Choose a Reverse Mortgage Lender

When choosing a reverse mortgage lender, it is important that the lender conducts business in a way that is synonymous with success for their clients.

To take a step back, a reverse mortgage is a financial product that allows home owners over the age of 62 to receive advance payment on the equity of the home in the form of payouts. These payouts are usually used by seniors to help pay unforeseen bills, such as medical expenses.

The Federal Trade Commission (FTC) cites three types of reverse mortgages: single purpose reverse mortgages, proprietary reverse mortgages and federally-insured reverse mortgages, also known as Home Equity Conversion Mortgages (HECMs). ..Read More>>

23Mar

HECM Reverse Mortgage Loan Limits for 2016

Recently, I had the pleasure to welcome a lovely couple to my office where we discussed options in obtaining financing. They have been married since their 20s and have had a remarkable, long life together. The couple was facing a problem that demanded their full attention—the wife was recently diagnosed with cancer.

While not the first time I had an opportunity to help a couple facing a medical emergency, this time I could see more easily than others how damaging this was to her husband. They needed money to cover the cost that the insurance company required. We discussed their assets and liabilities and determined that their best option was to receive a cash infusion from a reverse mortgage. ..Read More>>

05Mar

Importance of Libor with Reverse Mortgages

If you are interested in having a cash infusion, and you are a senior over the age of 62, then a reverse mortgage is an excellent financial product to consider. Like any other financial product offered, it is important to consider market conditions, such as LIBOR, when determining the right time to initiate the product. Each person is different, no two is similar; therefore, speaking with one of our specialists is an efficient way to determine if you qualify.<!–more–>

Reverse Mortgage vs. Traditional Mortgage

To take a step back, a reverse mortgage is a popular product for seniors to obtain funds to support their lifestyle—especially those who are cash poor and house rich. To best understand the product, one should first consider a traditional mortgage. A traditional mortgage is a debt instrument used by individuals to make real estate purchases.

For example, Charles Xavier is an adult who is married with twins on the way. Xavier, like a majority of Americans, isn’t capable of paying the entire value of the home upfront. Therefore, Xavier meets with a financial institution to secure a loan over a period of 20 years. After 20 years, and interest paid on the loan for each of those years, Xavier finally owns the property free and clear.

Xavier participated in a common practice in real estate. With hard work and determination, as well as having the ability to stay focus on a lengthy debt transaction, Xavier secure one of the best investments of today: real estate. On the flip side, a reverse mortgage is similar to a traditional mortgage, but instead of Xavier paying the lender, the lender pays him.

For instance, having surpassed the age of 62, Xavier is now retired and during his younger years, he set out a financial plan to follow once he hit retirement. The only problem that Xavier encountered, which is common among retirees, is that his wife faced adverse circumstances and in order to pay her medical bills, the couple need to find a way to pay the bills. This can be scary because despite excellent foresight in his younger years, Xavier made an error in not allocating enough capital to his and his wife’s retirement plan.

To secure funds, and on the recommendation of a financial planner, Xavier engaged in a reverse mortgage. Having work hard over the years to eventually owning his home, Xavier is now borrowing against the equity in his home, a method that allows him to receive a line of credit. This line of credit is usually determined by the value of the home. In Xavier’s case, when given the option of having a single lump sum, a regular monthly payout, or a combination of the both, he and his wife chose a regular monthly payout.

LIBOR Influences Interest Rate

Interest is only charged on proceeds received from the reverse mortgage. According to Investopedia:

Most reverse mortgages are variable interest rate loans tied to short-term indexes, such as the 1-Year Treasury Bill or the London Interbank Offered Rate (LIBOR), plus a margin that can add an extra one to three percentage points. Any interest compounds over the life of the reverse mortgage until repayment occurs.

LIBOR stands for IntercontinentalExchange London Interbank Offered Rate. For most of the world’s top banks, LIBOR is a benchmark rate, which acts as the first step when calculating the interest to charge other banks short-term loans.

Administered by ICE Benchmark Administration, LIBOR consist of five currencies to determine the rate, which are the following: Swiss franc, Euro, Japanese yen, pound sterling and the United States dollar. In total, 35 different LIBOR rates are used per each business day. The seven different maturities are overnight, one week, and one, two, three, six and 12 months—the three month U.S. dollar rate being the most popular.

Over the course of the loan on the home equity, Xavier will begin to owe more money to the lender. When the time comes that Xavier or his wife dies and one of the two seek to move to a new home or apartment that is better suited, then the lender sells the home to retrieve money that was loaned. This is usually a percentage of the sale, and in Xavier’s case, about 35 percent of the total value. Therefore, on Xavier and his wife’s $150,000 home, the lender—before calculating interest—would receive $52,500, while Xavier and his wife would walk away with a cool $97,500.

As is apparent, the transaction was mutually beneficial to both parties, with neither side receiving more than the other. Xavier was able to pay of his wife’s medical bills. In addition, they had the luxury of purchasing items that otherwise they wouldn’t be able to because their insurance does not cover.

Do I Qualify for a Reverse Mortgage?

In conclusion, a reverse mortgage is an excellent financial product for persons over the age of 62. The reverse mortgage, such as in Xavier and his wife’s case, allows the ability to pay off unforeseen circumstances. The cash infusion is also useful when purchasing items that are not covered by the insurance company.

When calculating the technical details, such as the interest rate, it is beneficial to be aware of the current LIBOR bench mark rate to determine if the financial product makes sense for the individual. At the moment, it is an opportune time in initiate in a reverse mortgage.

For additional questions on a traditional mortgage, a reverse mortgage, the LIBOR rate, or anything related to securing a reverse mortgage, feel free to contact one of our friendly specialists today. They can provide answers to the most difficult questions and also determine if you qualify. Their number is (888) 547-8308. The hours are Monday to Friday, 9 a.m. to 8 p.m. and Saturday to Sunday, 12 p.m. to 3 p.m. EST.

Be sure to also check out our learning library where a wide range of information is available. Click here to visit our learning library. Cheers to your success!

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