How to Compare Remortgage Deals Side by Side

When it comes time to compare mortgage and remortgage terms, the piece of advice you'll hear most often is to be sure to compare like loans side by side. After all, they'll tell you, you can't expect to compare apples to oranges and come up with a comparison that makes sense. When it comes to remortgage deals, though, part of the comparison process is deciding which TYPE of remortgage is the best one for you. The most common comparison point - the APR - isn't always the best or only way to choose which remortgage deal is right for you. So exactly how DO you compare mortgage details to be sure you're getting the best deal?

There are two ways to compare mortgage deals to decide which is the better financial deal for you right now - by total cost and by monthly payment. Which method you use depends on your purpose for seeking a remortgage in the first place. If your main aim is to lower the monthly payment you're paying, you'll want to compare mortgage payments per month first, and the total cost of the remortgage second. If your aim is to shorten the time you're paying or to lower the total cost of your loan, then you'll compare mortgage total costs first, and then the other details.

Compare Mortgage Total Cost vs. Compare Mortgage Payments

How do you decide between the total cost and mortgage payments? Imagine your mate at work loaned you 20 quid and said you could pay him back at either £1 a day for the next month or £5 a day for the next five days - and any day you don't come up with the cash, he'll punch you in the nose. In the first case, you'll pay him back £30 for £20, but who can't scrape together a quid a day? If you choose the second, you'll pay him back only £5 above what you borrowed, but it's a bit stiffer to come up with £5 pounds each day. The better deal depends entirely on whether or not you can manage a higher payment each day.

Doing the Math

In either case, you'll want to compare mortgage costs, and when you do it's important to add in all of the costs to remortgage. That includes the total interest paid, any fees and closing costs you're charged and any redemption penalty you'll have to pay on your old mortgage. Don't forget to factor in special incentives when you compare mortgage terms side by side.

With the current financial climate, it's not difficult to find lenders willing to reduce their fees, or even charge you none at all. Other lenders may offer you little perks like letting you finance their fees along with the loan - you'll still pay the fees, and pay interest on them to boot, but it may make it possible for you to take a loan that you couldn't otherwise. In the end, it's important when you compare mortgage terms side by side that you include all the terms on each mortgage so that you can evaluate the best mortgage for your needs.

How to Compare Mortgage Options and Deals

How to Compare Mortgage Deals

As a mortgage is typically a rather large loan to which you are committing yourself to consolidating over a period of up to thirty years, the choice of mortgage plan becomes very important indeed. Remember that if you make a mistake in choosing your mortgage, the ultimate cost could be losing your home.

Property is a great investment though; therefore the risk should be well worth it, especially if you take care to make the right choices. The benefits of property ownership should be compared to the cost of the mortgage and the risk involved, allowing for an informed and rational decision of whether to buy or not. The question is... how do you find the best low rate mortgage?

If you are reading this article, then you are well on your way, because the most efficient way to compare mortgage deals is by exploring the internet, here you can locate excellent websites providing mortgage help such as free quotes and all the information you need on the diverse payment plans and the related benefits or compromises. At the end of the day the goal is to find the lowest mortgage rate for the amount you want to borrow and the time period over which you want to pay it off. To do this you need to locate the best type of deal for you, with regard to capital amount and payment plan, and then compare the rates.

Naturally there will be the variation in mortgage rates from firm to firm, in part determined by the sum total of the loan and the period of repayment. Beyond these variables lie the factors which should aid your hunt for the best mortgage deal. It is therefore important that you look into all the options available on the market.

The final determinant, or basis of the rate you will find yourself paying, is the financial market and as such you should find the rates quoted to you lining up to the firm's standard variable rate, or a tracker rate tied to the Bank of England's repo rate. To spice things up many firms offering mortgages package their deals with options of fixed mortgage rates, adjustable rates, capped rates cash-back deals or discount rates. It is important to understand the implication of opting for any one of these options, and then weighing up the convenience and the cost which it will incur upon your monthly budget.

Finding the most suitable mortgage for your individual circumstances and getting it at the lowest rate are both factors which can considerably minimise or reduce the risk factor of taking out a mortgage to buy property. Ultimately you need to ensure that you can comfortably meet your mortgage repayments over the time it takes to gain complete ownership of your new property.

What Is a Mortgage Advisor

If you are considering purchasing a property for yourself, to let to tenants, re-mortgaging, or looking at any other form of mortgage, a visit to the mortgage advisor is probably on the cards. There are different types of mortgage advisor and it is important to make sure you get all the relevant information before making your mortgage decision.

A tied mortgage, or single lender advisor may start off working in a bank or building society. Mortgage advisors working in this kind of role and establishment are only able to offer you products available from their employer, this should be made clear at the outset. They can recommend the best products available from their firm for your situation and help you with application paperwork, and any other questions you may have. However they cannot help you with advice relating to other products or information outside of their company.

Multi-Tied mortgage advisors can be found mainly in estate agents. They work with a limited number of mortgage lenders and will recommend from a select few mortgage lenders that they work with. While multi-tied advisors can offer you more choice than a single lender mortgage advisor your choice is still very limited and you may not be getting the best deal available to you.

An independent mortgage advisor will normally work in their own office or sometimes within an estate agent, but never as part of a bank, building society, or other similar set up. The main difference between the single lender and the whole of market independent mortgage advisor is that the independent advisor should have access to the entire market - every mortgage from every lender that is applicable to you. The tied advisor can only offer you a very small proportion of what is on offer as they can only offer products from their own company.

When you make an appointment and visit your mortgage advisor you may want to out aside at least an hour or two, and take in proof of identification and proof of earnings for the last 3 months or so. They will need other bits of information as your application progresses, but this should be all for your first meeting. You may be dipping your toes into the mortgage market for the first time to see how the land lies, and if a mortgage is even possible in your current circumstances. Alternatively, you may have sold your last house and be ready to buy another having found the most suitable mortgage arrangement.

Your mortgage advisor will need to ask a number of questions appertaining to your financial situation, so if, for example, you are unsure what the balance of your credit card is or how much your car lease costs per month, find out and if possible take the paperwork with you to the mortgage advisor. The first visit is sometimes called a Fact Find, as it is a research session on behalf of the mortgage advisor to build a clear picture of what options are available in your situation. Your advisor will need to determine how much you can afford as a deposit and as a monthly payment, with all other outgoings considered such as loans, bills, insurances, and any other regular payments you have to make.

One of the biggest considerations to make when choosing your mortgage is the fees involved. This is a tricky area and you may find yourself paying much more than you expected via mortgage penalties if you do not fully understand the agreement you are signing. To ensure you find the deal best for you be sure to talk to a whole of market independent mortgage advisor who can give you the big picture and help to find you the best deal available.

Philip Loughran writes on a number of subjects from travel to law, automotive to education. For mortgage advisor in Portsmouth and mortgage solutions Portsmouth he recommends Choice Financial Solutions.

Independent Mortgage Advice and Advisers

When it comes to choosing a mortgage the options can be overwhelming. Getting the right mortgage advice is essential for making the best financial decisions for your future, and it can be a bit if a minefield. In this article we hope to help you understand why it may be in your best interest to speak to an independent financial adviser, and the pitfalls of not having enough advice to make an informed decision about your mortgage choices.

You can obtain mortgage advice from a wide range of sources; your estate agent, your bank, your building society, or an independent mortgage advisor. Many banks, building societies and estate agents are what is called a 'tied adviser', their advice and the products they are allowed to offer you can only come from one source. Many banks and building societies only wish to sell you their own products, they do not work on the behalf of other companies. Bank or building society employed mortgage advisers will usually be able to provide you with a range of options for your mortgage, sometimes with slightly preferential rates if you are already a customer. However, this is a very limited range of options compared to the wider market and you may not be getting the best deal you could.

Estate agents will often be restricted to a partner or panel of mortgage brokers with whom they work, they may be tied advisers or multi-tied advisers, meaning they have access to a limited number of companies. Mortgage advisers in estate agents are usually able to offer advice from these partners and panels, providing more choice than a bank or building society, but not always giving you access to all available options as they are limited to offering mortgages from these select companies. However this is not always the case and some estate agents will be able to offer access to the whole of the market. Estate agent mortgage advisers will often charge a fee for their services, this may range from £95 to £500 but is entirely dependent on their company policy and other factors.

Independent mortgage advisers may operate differently to the aforementioned businesses. By being independent these advisers have access to the entire mortgage market, and can offer you the widest possible choice for your situation and requirements. They are not tied or bound to one or a number of mortgage brokers, and can access deals and offers from any mortgage company. This helps to offer you the widest choice and the best deal for your mortgage.

Independent mortgage advisers will rarely charge a fee to the applicant. Their mortgage advice fee is paid by the mortgage lender you decide to use, unless you choose to pay the adviser yourself and claim the commission from the lender later. Usually the first meeting you have with an independent mortgage adviser is free of charge, where they work out the best mortgage deals for your requirements and fully explain their fee structure before progressing to arrange a mortgage for you.

Philip Loughran writes on a number of subjects from travel to law, automotive to education. For mortgage advisers in Portsmouth and independent mortgage advice Portsmouth he recommends Choice Financial Solutions.

On Line Mortgage Quotes

The mortgage industry is a very competitive one, so if you are on the market for a mortgage, or refinancing your existing one, you may want to consider getting a few quotes on line.

By obtaining a few quotes on line, you are in no way committing yourself to anything.

Due to the competitive nature of the mortgage industry, it really wouldn't hurt to post an on line application at a secure sight, and allow for four or five loan officers or brokers to compete for your business.

Obtaining an on line quote is very simple, not to mention, very safe. When going through this simple process, you are asked for very limited information. At least enough for a loan officer to get a general idea of what you are looking for.

One of the many benefits of obtaining on line mortgage quotes is the fact that you barely have to do anything except point and click. Once this is accomplished, you will receive anywhere between three and five phone calls, usually within forty-eight hours from loan officers who are interested in doing business with you.

Another benefit of having four or five loan officers assess your situation is that you will have the option of choosing the best rate and loan program to meet your needs and your budget.

When shopping for on line mortgage quotes, most loan officers understand that you are shopping around and speaking with other mortgage companies.

The last thing a loan officer wants is for you to take your business to their competitor. This puts them in a situation to find you the best rate and program available.

Shopping for an on line mortgage quote is definitely worth a try, and costs absolutely nothing. Remember you are not committed to anything, so why not give it a shot? Good luck.

Central Mortgage Company Loan Modification Case Study

Central Mortgage Company seems to be one of the banks who are more cooperative in modifying investment property loans. Compared to other bigger banks, where the loan modification applications are mis-handled easily due to the complex of bank's internal procedures and policies, Central Mortgage's system is more streamlined and efficient.

However, in order to take advantage of their better system, your mortgage modification applications still need to be in the right hands. If you find the phone representative does not offer much help in advancing your application, prepare to escalate the issues to receive right attention. An indication of the process going nowhere is when your files have been transferred here and there without no one having a grip on what is going on.

Central mortgage requires the borrower to fill out the bank's own financial worksheet. They do not consider self-made forms even if you have included all the necessary financial information such as asset, liability, and monthly expenses for them to evaluate your case.

The company usually requires forbearance period before making the final decision on the modification. Toward the end of trial period, if the borrower has followed the forbearance arrangement, the bank should automatically send the loan modification approval documents to the borrower. All the borrower needs to do at that point is to sign, get the documents notarized, and mail them back.

The process is very smooth once the application is in the forbearance stage. Unlike many other banks, from where the borrower may continue to receive late notices in mail or phone calls during the trial period, Central Mortgage's system is up to date so that the inconsistent communications do not confuse the borrower.

RealInvestorTips.com specializes in investment property mortgage loan modification (Chase / Wanu, Wells Fargo / Wachovia, Citi, Bank of America / Countrywide, American Home Mortgage, and more), short sale for investors and rental management. The website also provides extensive resources on various owner financing tools like Lease To Own / Lease Purchase Option, Land Contracts / Real Estate Contract, and latest real estate trends.

The Benefits Of A HUD Reverse Mortgage

Even though you might be acquiring a HUD reverse mortgage, the real loaning is executed by a private bank. The lender is certified by the Government to offer this type of loans. Even so, be sure you get a HUD reverse home mortgage.

There are many benefits to acting so. First off, you will get the best deal possible as the lender's financial obligation is fixed. There is a maximum amount of money they can loose. Anything in top of that is covered by the insurance that you pay as part of the reverse mortgage.

Second, in order for a reverse mortgage lender to become HUD licensed, it must abide by hard prerequisites dictated by HUD. HUD has strict rules that all lenders must comply with if they want to offer this type of loans. Also, they must go through ongoing auditing to make sure that they are acting in a legal and ethical way.

Among the guidelines set by FHA, there is one demanding that potential borrowers receive a free counseling session. In this session, you can have any questions answered by a third party. You can use this session to ask any questions. Make a list of all the questions you have before going to the session. That will guarantee tat you don't forget any questions.

FHA has also set limits on how much money can be borrowed by using a reverse mortgage. The amount varies depending on the area of the country where you live. You can check with your reverse mortgage broker to find out more about these limits. In most cases, it's just over $300,000.

If you want to learn more about how a reverse mortgage works, you can go to seniors reverse mortgage. In this website, you can find many informative articles about how reverse mortgages work and how to know if a reverse mortgage is the best choice for your personal situation.

5 Tips Why Reverse Mortgages Fit To The Senior Groups

Actually the idea of the group reverse mortgage is the same as the group flats, which especially the young people favour. Belonging to the group allows a person to live in a bigger house and enjoying better life quality, than the life in a one person, small flat would offer. Sounds promising, or what?

1. The Target Of The Reverse Mortgages.

The original target of US Federal Government, when it decided about the reverse loans was to arrange a source of extra income for those senior citizens, which were cash poor, but equity rich. Actually the target was to improve the life quality of the seniors by offering a way to receive more money.

The group reverse mortgages improve the Government idea by offering each senior in the group better living standards, because the group can buy bigger and higher quality house or flat compared to one senior. I wonder, why the limit in this case is down to three persons?

2. Why The Group Is Better?


One of the main problems of some seniors is, that they suffer loneliness. Another problem is, that their standard of living is low and they live in the too small homes. When seniors build a group of two or three, they will solve many problems with one hit. They get company, they get better social life, they get better homes and they can share many things.

3. What Are The Qualifications For Three Seniors?

If we forget the human relations and think seniors only as the borrowers, the qualifications are easy to fulfil. Each must be at least 62 year old and owner of the home, i.e. the title must contain three names. All seniors must use the home as their primary residence. And there must be home equity left.

4. You Have To Meet The Counselor.

Because the reverse loan rules can vary state by state, it is useful to meet the counselor to get the correct guidance. This meeting must be prepared with the long question list. The counselor is an expert, who can also tell about the alternatives, because he does not try to sell anything.

5. Benefits To The Group Of Three.

As you may recall, the reverse mortgages will not be paid back untill the last borrower will move away, sell the home or pass away. There is no monthly payments whatsoever, but the loan capital, interests and all the costs will be apid back, when the running time is out and the home will be sold. The borrowers have to take a so called mortgage insurance.

The idea is, that if the home selling price will not cover all the costs in closing, the missing part will be taken from the mortgage insurance. If you have a group of seniors and you are thinking about the reverse mortgages, think about the many benefits it will bring to you. It is slightly more costly than the usual mortgage, but on the other hand it will solve many problems, i.e. brings some extra cash for your senior group.

3 Tips To Get A Reverse Mortgage Tax Deduction

The reverse mortgages are for those seniors 62 or over, who have fixed incomes and who own their homes, where they live permanently. The reverse loan makes it possible to tab a part of the home equity either as a lump sum, as periodic payments or as a credit line.

As the reader may know, the reverse mortgages have zero payments during the running time without a special agreement. If no costs or fees are paid during the running time, a reverse mortgage tax deduction is not possible. In this sense the reverse loan and the traditional mortgage behave differently.

1. The Reverse Mortgage Tax Deduction Is Possible, If Some Fees Or Interests Are Paid.

This is natural, because how a taxpayer could deduct something, which he has not yet paid. Usually the benefit of a reverse loan is that no costs, capital nor interests are paid during the loan running time. All are paid, when the running time is out, a senior moves away or pass away. Then the capital , costs and the interests are paid using the selling price of the home, or if it does not cover everything, the mortgage insurance, which is obligatory. Now a senior or the heirs can use the reverse mortgage tax deduction.


2. There Is One Exeption.

No rules without exceptions. A wise senior, who takes a reverse loan thinks a situation, when he wants to prepay the loan. If this is not in the agreement, it is not possible but if it is, a senior can pay the capital, fees and the interests away, or just part of them, and get the reverse mortgage tax deduction. How wise! This is a very useful option, because you never know, how and when the financial situation will change to the positive direction.

3. What, If A Borrower Will Pass Away During The Running Time?

If this happens, a borrower cannot deduct the paid interests or fees. That is the duty of the relatives or heirs. However, the sum can be quite big one, especially if there has been a long running time. As a summary we can say, that the reverse loan is different compared to the usual mortgage. The great principal is, that every single sum must be paid before it can be deducted. This general rule decreases the chances to a minimum. However, a wise senior will take this as a part of the reverse loan agreement.

Reverse Mortgage Rules

Reverse mortgage provides an excellent financial option for seniors that need some extra income during their retirement years.

These loans are taken out against the equity that seniors have in their home, offering cash without having to worry about any payments.

One of the main benefits of going with a reverse mortgage is that seniors are able to get cash that can be used to go on a vacation, pay for everyday living expenses, or even purchasing a nice vacation home.

The payments can be made in a lump sum, as a monthly payment, or a credit line may be extended. Of course, before deciding that this is a viable option for your needs, it is important to learn more about the reverse mortgage rules that exist today.
Reverse Mortgage Rules For Qualification

First, this option comes with several reverse mortgage rules for qualification. Before you can take out a reverse mortgage against the equity in your home, you do have to meet qualifications set by the government.

To be eligible for this option, you will need to be at least 62 years old. You also need to live in the home you’re using for the reverse mortgage at least six months out of the year. Some equity in your home is needed as well to be able to take out this type of a mortgage.
No Reverse Mortgage Rules For Credit Qualifications

For many types of mortgages, your credit plays a big part in whether you’re able to get the loan you need. However, there are no reverse mortgage rules regarding credit qualifications when you take out a reverse mortgage.

Whether you have perfect credit or bad credit, you still have the ability to qualify for this type of loan. The reason that credit will not matter is because the loan is guaranteed by the value that you have in your home.
New Reverse Mortgage Rules On Home Value

The amount that seniors can get with a reverse mortgage will depend upon the value of the home they have. However, if the home is valued at quick sale price, it can definitely lower the amount that seniors can borrow.

With new reverse mortgage rules, the amount that can be borrowed actually depends on the appraised value of the home. This is important because it allows seniors to borrow more money, since appraised value is much higher than the real market value in most cases.

Since the crash of the housing market, home values have plummeted, but this doesn’t have to affect the amount you are able to borrow when you go with this type of a mortgage.
Reverse Mortgage For Purchasing a New Home

One of the options seniors have when they take out a reverse mortgage is using that money to purchase a new home. Sometimes seniors decide they want to live in a smaller home, they want to live closer to relatives, or they want to purchase a vacation home that they can enjoy.

This is possible and the reverse mortgage rules are very flexible in this case. In many case, these mortgages help to eliminate the need for a down payment on a new home and they are not required to sell the present home.

With these new reverse mortgage rules, it offers the ability to enjoy a new home while allowing both homes to increase in value, offering a great profit.

Whether you want to purchase a new home or you simply need some money for living expenses during retirement, reverse mortgages are an excellent option to consider. With the new reverse mortgage rules, you have even more options and flexibility. Keep in mind that you will need to pay taxes, your insurance, and home repairs while you have this loan.

Since the economic downturn has occurred, many seniors have faced some tough financial situations. However, a reverse mortgage can provide the financial help needed to provide them with a better standard of living.

If this is an option you want to consider for your own financial needs, make sure you meet with a quality counselor and discuss all your options so you can make the best possible decision for your needs.

Reverse Mortgage vs. Forward Mortgage

In the past several years, reverse mortgage loan has become one the most useful product in terms of providing financial security to the senior US citizens. What is a reverse mortgage? As it name tells, it is merely the “reverse” of regular mortgage loans. Simply put, in a regular mortgage you make monthly payments to the lender but in a reverse mortgage the lender pays you without you having to pay it back for as long as you live in your home. The loan is reimbursed when you die, sell your home, or permanently move out of your home.

“Why shouldn’t a senior just pull out on a regular mortgage loan rather than a reverse mortgage?” being a senior, you may be struck with this notion many times, but it would be a good thing if you realize the potentials of using a reverse mortgage loan over a forward mortgage.


Both the reverse and forward mortgages allow you to maintain the home ownership while you pay back the loan with interest. The only difference lies in the method of repayment. Here we’ve emphasized a few differences between reverse mortgage and a regular one:

* You have to make monthly installments while paying back a regular mortgage, this way you reduce debt and build up your home equity—whereas with a reverse mortgage you don’t have to make any sort of monthly payments, and the entire loan amount along with the interest has to be paid back when the homeowner dies, sells the home, or moves from it permanently.

* You need a solid credit score and income requirements to qualify for a forward mortgage, but no such requirements are needed in case of a reverse mortgage.Reverse mortgages basically help those who are house-rich but cash-poor.

* There are strict income check rules before you actually meet the criteria of a regular mortgage, but you need no cash for a reverse mortgage. Even if there is no money to pay the loan when the homeowner dies, the bank will simply seize the home. But there is an exception to this case as well, if the heirs of the deceased decide to pay the loan amount; the home stays within the family.

* Reverse mortgages are only available to senior citizens of 62 or above, while in forward mortgage there is no such age condition but it requires a firm income statement and job consistency. The conventional mortgage loan takes up the income while the reverse mortgage loan considers the value of the home.

These points will help you determine the best kind of loan suited to your needs. However, if you are a senior US resident, there may be many suitable options available to you if you opt for a reverse mortgage. It’s always better to check up with professional reverse mortgage lenders, who can guide you properly in making the right decision.

4 Facts Of How Does A Reverse Mortgage Work

Many people, who wonder how does a reverse mortgage work do not understand the word reverse. So, when with the usual mortgage a borrower pays to the lender monthly, the reverse mortgage lender pays to the borrower. And the key thing is, that there is no monthly back payments. That is how does a reverse mortgage work!

1. Can You Qualify?

Yes, if you fulfil the qualifications. First, you must be an American, age 62 or over and own a home, where you have equity left. And you can also use the reverse mortgage to buy a new home and to use cash or the equity of your old home as a down payment. These are the basic rules how does a reverse mortgage work.

2. The Idea Is That You Get Cash, So You Decide, How The Lender Will Pay You.

The reverse mortgage is meant to help you in your daily life. This means that you have the freedom to decide, how the lender will pay you. And that of course depends on, what are your needs.



The alternatives are as a lump sum, as a monthly payments, as a credit line or as a combination of all these. That is how does a reverse mortgage work.

3. How Much You Can Borrow?

There are these factors, which influence on that. Your age, the appraised value of your home and the interest rate. We can say, that the older you are, the more expensive is your home and the lower the interest rate, the more you will get. However, the situations vary state by state.

4. There Is A Compulsory Mortgage Insurance.

The idea of this insurance is, that the lender nor you will not meet any troubles with the back payment. If it happens, that the selling price of your home cannot cover the loan capital, interest and the costs, the difference will be paid from the insurance.

On those cases, when the selling price is bigger, the difference will be paid to your heirs. That is how does a reverse mortgage work. By the way, the reverse mortgage will be paid back, and all the costs, when you move permanently away.

Not sooner. There is still one important element and that is the compulsory counseling. It means that before you get approval for your application, you have to meet the counselor. In the real life, this is a very useful meeting, because these counselors are high quality experts and you can get very useful advices.

As you see, the reverse mortgage loan can help your daily life in many ways by releasing cash money from the equity of your home. All this money belongs to you, because you have saved it during many years and now you want to use it for the necessary needs.

Reverse Mortgage - FAQ About HUD Reverse Mortgages

A senior uses the reverse mortgage to supplement the social security, to pay the suddenly increased medical bills, to pay the home repair or to buy a home for a child. The reverse mortgage has the equity of the home as the only guarantee and a senior has not to present the credit score or the income information.

1. How Much Can I Borrow?

The reverse mortgage program has strict rules about the amount of the loan. The absolute maximum is $ 625.000. The factors, which will determine the loan amount are the age of the borrower, the appraised value of the home and the interest rate level.

We can say, that the older the borrower is, the higher the appraised value of the home and the lower the interest rate level, the more a borrower can get. The whole loan sum will be taken against the equity of the home.

2. Am I Eligible?

The Federal Government planned this loan type for seniors, who are at least 62, who own their homes, where they have equity left and who live in that home permanently. The lender will not ask any credit nor income information.

3. How Does The Lender Pay Me?

The borrower, a senior, can decide, how the lender will pay to him. The alternatives are the monthly installments, the lump amount, the credit line or a combination of some or all of these. A senior can use the money as he will, there is no reporting. Of course the need of a senior determines, how the payments will be done.

4. When I Will Pay Back?

The idea of the reverse mortgage is to arrange more disposable cash to a senior without monthly back payments. All costs, capital and interests will be paid back, when the loan will be closed. This happens, when a senior will move away, sell the home or die.

Then the home will be sold and the reverse loan and all the costs will be paid to the lender. A senior has to take a mortgage insurance, which will be used, if the home selling price does not cover all the costs. The borrower can never owe more than the value of the home.

5. Is My Home The Right Type?

The reverse mortgage program accepts almost all home types. A senior must have a single family home, a 1 - 4 unit home, which includes at least one unit for the borrower, a condominium, which is approved by HUD or a manufactured home, which meets FHA requirement.

It was possible to tell only the main features of the reverse mortgage in this short article. To get more detailed information about the program, please contact the federal reverse loan counselor, who can tell you, whether the loan fits to your financial needs.

Juhani Tontti, B.Sc., Marketing. A senior can get great benefits from the reverse mortgage loan. The reverse mortgages include pros and cons, which a senior has to know. Visit: reverse loan

How to Avoid the Reverse Mortgage Con

The reverse mortgage has gotten a lot of attention lately, but it appears that many seniors just don't trust them. Part of the reason this is true is because there have been stories of a reverse mortgage scam floating about. But are they true, and is it even possible to be scammed?

What constitutes a scam?

It is possible for someone to be unhappy, but not scammed. So when considering a reverse mortgage scam, what would have to happen to make it a bad thing?

Doing a short term reverse mortgage

Except under very specific circumstances, the loan should be used for a long term loan. The fees can be expensive and just don't make sense on a loan you don't plan on keeping.

The scam here is if a mortgage lender is trying to get you to do a reverse mortgage and you don't need one, or won't benefit long term from it. Usually, this is just to generate their paycheck, and that is not a good reason to do the loan.

The exception is if you are trying to avoid foreclosure or other financial hardships. In these cases, a short term reverse mortgage may save you from losing your home or help to do necessary repairs. This is not the norm though, and it should be used cautiously if these are the reasons.

Using proceeds for other investments

It is against the rules for an investment professional to get you a reverse mortgage and then sell you an investment based on the proceeds from the loan. The proceeds from a reverse mortgage should almost never be annuitized, since this defeats the purpose of making your equity "liquid".

Investment professionals are making a double paycheck if they do this, and that is why it is not allowed. It is actually OK if the Investment Company and Lender are two different companies, but it is still discouraged.

Giving money to family

This is a touchy area, but what I am talking about is lending money to family that want to invest it in speculative investments. For example, lending money to a grandchild to flip homes or start a business. This will create hard feelings most of the time. More likely than not, you will find that you will never be repaid.

If you want to gift money to your heirs, it is OK. But try to avoid lending money that you need, for someone else to invest. What most consider acceptable is to pay for a college education or help with a down payment on a home.

The reverse mortgage itself is not a scam, but how the money is used can be. Keep in mind that the equity in your home is there to help you through retirement and lending it or giving it away will just leave you short if you don't get it back.

The best way to avoid a reverse mortgage scam is to make sure the money (and loan) benefits you, not the people asking you to do it. There is nothing wrong with the lender making a buck, or you being generous and gifting the money. But the bottom line is it should benefit you the most. After all, it is the last "savings" that most people have. It should be guarded vigilantly.

After many years of originating loans for seniors, I have come across a reverse mortgage scam once or twice. It is never the fault of the reverse mortgage, but more the person doing the loan, or family members that want some of the money. See more examples of things to look out for on our site.

Medicaid Eligibility And A Senior With Reverse Mortgage Loan

The Medicaid eligibility rules are clear. They allow $ 2.000, a car and a house, period. If a senior receives a lump-sum from the reverse mortgage, he or she may become uneligible to the Medicaid to pay the nursing home care.

This is a problem about which the press does not speak so much. The reverse mortgage does not have influence on the Medicare or Supplemental Security Income. The Medicaid eligibility rules are actually quite complicated. The monthly payments, which a senior receives from the reverse loan can make him uneligible to Medicaid.

1. If The Nursing Home Waits After 5 Years, Meet An Expert.

If you consider to take a reverse mortgage and you see, that after 5 years you will need nursing home care, you better be wise with your moves.An expert must understand and know exactly, what practices are used in these cases and in this state concerning Medicaid and SSI .



2. Your Local Municipal Housing Authority.

If a reverse mortgage seems dangerous thinking the Medicaid eligibility, it is also wise to seek for alternatives. The local municipal housing authority can help you, maybe the deferred payment mortgage is an option. You can also visit the National Council on Aging website to find guidance.

It is very, very important to be in a constant contact with the experts to get the correct information how to handle the reverse mortgage application. Many people, especially those seniors, who are close to 62, do not think the Nursing home future and thus cannot take that thing into their plans. But an expert can, talk with him!

3. The Money Transfer.

If a senior transfers the money to another place, so that he is not anymore the asset owner, Congress has established a period of ineligibility for Medicaid. It is important to follow the Congress rules to be able to avoid penalties.

4. No Problem, If A Senior Can Manage Without Medicaid.

The secret is to be able to forecast the future income and living costs. The income part is relatively easy, because they are flat, but what happens, if a senior get some oblogatory, extra and regular bills, like the increased medical bills?

One solution could be to take a reverse loan against the home equity, but to leave a major part of the equity untouched. If in the future a senior will need more disposable cash, he can refinance the reverse program and to take more loan. The reserve equity and the risen house prices make this possible.

How Can a Senior Qualify For a Reverse Home Mortgage?

Different reverse home mortgage lenders have different rules, but generally a senior must have equity left in his home, and own capital, against which the reverse home mortgage loan will be taken. This equity works as a guarantee.

1. The Target Of The Reverse Home Mortgage Is To Help Seniors.

This principles can be seen in all terms concerning the reverse home mortgage loans. They are very easy to get and very flexible loan types. They offer financial help for immediate needs of the disposable money, for bigger needs, like the home repairs or help for occasional needs in the form of the credit lines. A senior can select, how he wants a lender to pay him.

2. The Reverse Home Mortgage Loan Will Be Taken Against The Equity Of The Home.

There is a clear philosophy. When seniors have saved money during the years, when they worked hard and paid their mortgages, now is the time, when they can use part of these equities for their new financial needs. So the money goes in a reverse way.

This philosophy has also other benefits. When the reverse loans are taken against the home equities, seniors do not need a good credit information nor monthly incomes. This is great, because now those seniors, who have very limited incomes can get a loan and to increase their monthly incomes.

3. Your Credit Information Has No Meaning.

People have bad credit scores for many reasons but for seniors they have even worse influences. The reverse mortgage loans are excellent for senior people, who have bad credit information and additionally difficulties with their monthly expenses.

The bad credit information is especially bad for a senior. But a bad credit information is one thing and the home equity is another thing. If a senior has a home equity left, he is lucky, because that and only that he can use to get a reverse mortgage loan.

4. Your Income Information Has No Meaning.

Can you imagine, that you can get a loan without any regular monthly income and even if your credit record shows very bad figures? This is one of the great benefits, which the reverse home mortgage loan has. The reason is, that the whole loan is taken against the equity of the home and you can never owe more than the value of the home. So the incomes have no meaning.

As you can see from the above qualifications, the reverse mortgage loans are almost for every senior. The key point is, that a senior owns a home, where he has equity left. That is the own capital against which the reverse mortgage loan is taken.

It is also extremely important that a senior meets the reverse mortgage counselor, who is an expert to guide him about his special needs. That is the most important meeting, because the loan comes almost automatically. The counselor meeting requires, that you will prepare yourself correctly and make lots of questions.

Dangers of Reverse Mortgages – Top 3 Things to be Aware of

As the baby-boomers prepare for retirement reverse mortgages are going to be the next mortgage boom according to most analyst. The baby boom began in 1946 and continued through 1964. During those 19 years, 76 million people were born. As this segment of America begins to retire a large portion of them will need to rely on their homes equity to make "ends meet." How they access that equity will be the mortgage industries primary focus in the years to come.

The traditional "forward" mortgage has the homeowner borrow the money by way of a traditional mortgage or home equity line and make payments on that amount. The homeowner takes the money, places it in a safe interest bearing account and uses the money to augment their income. The interest that is earned on the money is used to supplements the monthly payment that the homeowner has to make. The problem is that the interest shrinks as the money is used and the mortgage payments stay the same.

Reverse mortgages have actually been around since 1989, but their popularity is skyrocketing as a result of the wave of baby-boomers that are retiring. These mortgage products are safe and beneficial when applied to the right homeowner and circumstances. Lendfast.com recommends that borrowers use FHA-insured Home Equity Conversion Mortgage (HECM) when considering these mortgage products. Getting a reverse mortgage from the private sector may include more headaches and costs. However, as with financial product, there are some dangers that you need to be aware of; here are the top three reverse mortgage pitfalls to lookout for.

1) Repayment and Forfeiture – Most, if not all reverse mortgages will not require you to make payments or repay the loan for as long as you live. Once you pass on your heirs will have the opportunity to remortgage the debt or sell the house and repay the loan. If the home has equity above the amount owed to the bank your heirs will receive those proceeds. If the home is "upside down" your heirs have no obligation to repay the debt, but they will forfeit the home unless they pay the amount owed.


However FHA rules state: "When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender." The danger here is "no longer use it for your primary residence. This means if you have to go to a hospice, nursing home or intend to live in another home and use the house as a second home the bank will call the debt due. This is definitely something you want to consider before taking out a reverse mortgage.

2) Cost and Interest Rates – At the inception of reverse mortgages they were almost exclusively offered with adjustable interest rates. Adjustable rates are still standard practice and you are almost certain to be offered this option to begin with. Don't! There are fixed rate programs available now and at today's rates adjustable rates are only going to go up in the future. It's easy to be lured into an adjustable rate because lower interest rates in a reverse mortgage have higher monthly payments. If the interest rate increases your payment decreases, as does the time frame you have to draw on the mortgage. Just remember, adjustable interest rates are a gamble and Las Vegas wasn't built on winners.

A considerable downside to reverse mortgages is the high up front costs. This cost can be compensated by a lower interest rate over time, but some seniors choose other options to draw on their home equity. Reverse mortgage closing costs should be about the same as most loans except the 2% mortgage insurance premium that FHA charges to insure the loan. FHA insures the lender will be paid regardless of the home's value when and if the lender has to take over the property.

At Lendfast.com we have noticed that many homeowners are paying higher closing costs for reverse mortgages than traditional forward mortgages. We believe this is because most homeowners are unfamiliar with reverse mortgages and tend to not shop around as with traditional mortgages. This is why we recommend the FHA insured type of reverse mortgages because they have closing cost limits that lenders must abide by. Always get two quotes or use the "lenders compete" method to apply for a reverse mortgage. You should also read How Does a Reverse Mortgage Work an article that explains reverse mortgages better.

3) Upkeep, Taxes and Insurance – On traditional mortgages your escrow payments are added to your payment but they are subtracted from your monthly check on a reverse mortgage. Most of the time you will be shown the monthly amount you will receive each month BEFORE the escrows are taken out. This means that you could sign up expecting to get $900 per month and only receive around $700. Make sure you are given the monthly payment LESS your escrow payment. Like most mortgages you will usually be given the option to escrow or not to escrow, however the bank has a vested interest in your home. Meaning if you do not maintain your insurance and taxes as they deem responsible they can call the loan or force an escrow account on you.

When you consider that the bank is basically buying your home you can understand why they would want you to keep their property in good shape. The problem is that this loan is being made to senior citizens. As they age they may become unable to do the necessary maintenance that the bank requires."Good shape" can mean thousands of dollars out of pocket for the homeowner when you consider what a new roof or a fresh coat of paint costs these days. Ask the loan officer what the lenders policy is on maintenance and repair. You may want to take enough money up front to have future repairs taken care of so that your monthly payment stays the same.

Mortgage Refinance Information

You may have bought your home with a finance company mortgage, or took out a second mortgage to pay for central heating or furniture. Your payments are probably very high because some finance companies charge interest rates of up to 50 per cent. It is advisable that you look carefully at the small print to find the true rate--most mortgage refinancing loans are over a fairly short term, about 15 years at most.

Smaller finance companies and credit brokers have been known to charge as much as 68 percent for interest. You may also find that you were charged a fee for the mortgage when you took it out (which could be 10 per cent of your loan) and that you are also paying interest on this fee. A finance company mortgage can land you in serious trouble, because the monthly costs are often higher than you think at the beginning. In addition, once you start missing your payments, arrears build up very quickly. If you try to pay back the whole loan, you may find that you owe far more than you originally borrowed.

Centralized lenders are finance companies which specialize in mortgages. They sell their loans through agents and they often lend to people who cannot get a loan from other lenders. Their interest rates are often higher. Giving mortgages is not the main business of insurance companies. Many of them will not grant first mortgages at all, or will consider them for only very expensive properties. They lend on endowment and pension mortgages. It is important to work out how much the mortgage will cost and whether you can afford the extra payments, so taking the affordability factor into account is very important.

Reverse Mortgage 101

Today's financial market is one of the most difficult markets to navigate since the depression. Many questions about where to turn for advice and how to find the best financial products without sacrificing security abound. Reverse mortgages hold promise as a safe and secure tool, but many seniors have questions about what mortgages and the myths surrounding them. Questions include: How do they work? What do you give up if anything? And, how does the retention of home ownership work?

To start, let's cover the basics and history of a reverse mortgage. The term came from early products in the 1980's where the lender made payments to the borrower rather than the borrower making payments to the lender. As a result the product was named the "reverse mortgage". These reverse mortgages often had significant downsides. Once the borrowers passed away the home became the property of the bank who lent the money, and at times terms applied where the borrower could be displaced from the home if they lived too long. Interest rates were typically adjustable with no fixed rate options available. Closing costs were often very high as well. In the 1990's FHA, seeing great potential for the product, got involved and new rules were implemented allowing the borrower to pass on the home equity to their heirs, a guarantee to never be displaced from the home regardless of how long they lived, protection from home value volatility and much more. As a result, today's reverse mortgages are a great option with very few drawbacks.

So how does the reverse mortgage work? A reverse mortgage is similar to a standard mortgage in that it is a loan that is secured by real property, namely the home. The big difference is that there are no mortgage payment requirements on the mortgage. How is this accomplished? The reverse mortgage requires that you have equity in your home and that you are at least 62 years old. As a result a calculation is made to determine the amount of equity that can be lent by looking at the age of the borrower, the interest rate charged and the location of the home. This tells FHA and the lender how much they can safely lend without ever collecting a mortgage payment. As a result the lender can lend with minimal risk, but must wait to make their interest until the homeowner either chooses to move or passes away. Foreclosing is rarely an issue- only in cases where the homeowner does not follow the terms of the loan such as not living in the home, not keeping the condition of the home to reasonable standards or not paying the property taxes and homeowners insurance. This makes a loan that is very appealing to the lender who simply wants to earn interest on a low risk loan.


So where does FHA come into play? FHA had an impact on the reverse mortgage industry when it started insuring the lenders against losses in exchange for certain benefits to the homeowner. This helped reduce interest rates and eliminated most of the big drawbacks of doing a reverse mortgage. If the lender issues an FHA reverse mortgage they are insured against losses should the balance of the mortgage be higher than the value of the home when the homeowner's passes away. Further, the same FHA insurance leaves the borrower the ability to leave the home equity to their heirs- and in most cases there is equity left for the heirs. Today's FHA insured reverse mortgages are referred to as HECM loans, or home equity conversion mortgage.

The benefits of today's reverse mortgages include the ability to live in the home payment free, to receive money from the reverse mortgage to do home improvements, pay off debts or other mortgages, get protection from housing volatility, and get funds that are not taxable (full article). Money received from a reverse mortgage is not taxed because it is not income, it is in fact loan proceeds just as getting cash from a mortgage refinance. The money does not affect Medicare or Social Security income as a result, but can have an impact on Medicaid for those receiving that assistance. Current reverse mortgage have many option types available, including fixed rate options, equity lines where you use money only as needed much like using a credit card- but without any payment requirements, and options for having monthly payments sent to you, or having a lump sum of cash given to you at the loan settlement.

Because of the issues from reverse mortgages of the past, many myths about reverse mortgages abound, and are often spread by financial consultants, radio personalities, close friends and relatives and even mortgage professionals who are not experts on reverse mortgages. We have included a full section on reverse mortgage myths to help clarify these myths and what the real facts are.

The myths include, but are not limited to the following beliefs:
- The bank will own the home when I pass away or move.
- My kids will not inherit the home equity.
- I cannot purchase a home with a reverse mortgage
- Reverse Mortgages are all adjustable rates.
- My kids will have to pay the lender if the mortgage balance is higher than the home value when I pass away.
- I cannot do a reverse mortgage if I currently have a mortgage on my home.
- Closing costs are extremely high
- I will be forced to move from my home if I live too long.

There are many benefits to reverse mortgages, and a few drawbacks. We encourage you to get complete information from a reverse mortgage professional prior to making a decision on getting a reverse mortgage. For more information feel free to visit my site.

Is a Reverse Mortgage Really Such a Good Thing?

With all of the hoopla going around about the reverse mortgage for senior program in the U.S., you would think it is the next great salvation for senior citizens on fixed income. Before we jump to that conclusion, let's investigate some of the pro's and con's of reverse mortgages.

Advantages and Benefits

The very best thing that happens as a result of getting a Reverse Mortgage for Seniors is the improvement that it might make in your monthly cash flow. When you get a reverse mortgage, the current mortgage on your home, if there is one, is completely paid off and thus your obligation to make monthly payments goes away and, instead, you will receive a monthly check from the reverse mortgage lender for asa long as you live in the house! For most seniors, that alone will make a huge improvement to their monthly cash flow budget. Let's say, for example, you have a $500 mortgage payment each month. With the reverse mortgage, that would go away and you could have a $400 check added to your income each month. That net difference of $900 per month can mean a lot to the typical senior citizen's budget!

Since most Reverse Mortgages are insured by the Federal government through HUD, the monthly checks to you are guaranteed even if you lender were to go out of business or if you were to outlive the term of your mortgage.

Other seniors may be getting a reverse mortgage to handle an unexpected financial obligation, like a huge medical bill or nursing home payment. In that case, they would still eliminate their existing mortgage (and payment), but would receive the reverse mortgage proceeds in a lump sum payment or a line of credit instead of monthly payments. When you apply for a reverse mortgage, these disbursement methods are optional to you and you may even mix them to get a small lump sum to cover a bill and take the remainder in the form of monthly payments.

Disadvantages

As the old saying goes, "There are no free lunches!" The downside of a reverse mortgage is that you are living off of the equity in your home. When you move out of your home or pass on, the reverse mortgage will have to be paid off, so this means the home will likely have to be sold. The amount that you plan on leaving to your heirs will necessarily be reduced.

There are significant costs (appraisal fees, loan origination fees, surveys, etc, etc.) associated with obtaining a reverse mortgage. Because of this, a reverse mortgage is not something which should be entered into casually. You should plan on living in the home for at least five years to make the additional reverse mortgage costs worthwhile.

With a reverse mortgage, there is a requirement to purchase Reverse Mortgage insurance from HUD each year. This is to protect you from problems with the lender's liquidity and to cover your payments should you outlive the mortgage.

To protect you from being scammed or 'ripped off' by unscrupulous crooks, the government also requires you to obtain credit counseling before embarking on a reverse mortgage. Usually this takes the form of an AARP counseling session that is free of charge and helps educate you on reverse mortgages as well as helps you determine whether or not a reverse mortgage is right for your particular financial situation.

The Need for Homework

The Reverse Mortgage for Seniors program may be a windfall to you or it could be completely wrong for you to consider. Be sure to do your homework, take your time, and get good advice from an independent source that will not get any money from your decision to get a reverse mortgage. Remember the Rule of the Barbershop - "Don't ask the barber if you need a haircut; you are sure to get clipped!"