What Are The Reverse Mortgage Rates in 2019?

What Are The Reverse Mortgage Rates in 2019?

In addition to understanding the fees you will pay, determining your potential reverse mortgage interest rate is one of the most important factors in deciding whether a reverse mortgage is right for you. When it comes to interest rates, reverse mortgages come in two varieties, fixed-interest reverse mortgages and adjustable-rate reverse mortgages. Both HECMs and proprietary reverse mortgages have fixed-rate and adjustable-rate variations.

Florida Reverse Mortgages: What You Need to Know

Florida Reverse Mortgages: What You Need to Know

As the third largest state in the U.S., it’s no surprise that Florida is a huge market for reverse mortgages. In addition, around one quarter of Florida’s population (over 5 million people) is above the age of 60, meaning that many individuals, including retirees, are looking for a way to utilize their home equity to boost their monthly income. In general, getting a reverse mortgage in Florida isn’t too different than getting one in another state, however, there are still a few things that you should know.

Reverse Mortgages in Texas: What You Need to Know

Reverse Mortgages in Texas: What You Need to Know

While Texas is the second largest state in the U.S., it’s actually a newcomer to the reverse mortgage game. In fact, due to homestead laws enshrined in the Texas state constitution, reverse mortgages weren’t even legal in Texas until around 20 years ago. However, in 1997, Texans voted to change the constitution to allow for reverse mortgages.

Reverse Mortgage Options: The Types of Reverse Mortgages On The Market Today

Reverse Mortgage Options: The Types of Reverse Mortgages On The Market Today

When it comes to getting a reverse mortgage, borrowers have a variety of options at their disposal. These include single-purpose reverse mortgages, proprietary reverse mortgages, and HECMs. FHA-insured HECMs are the most common type of reverse mortgage, and, while they’re offered by private lenders, they still must follow a variety of rules set by the FHA.

What are Single-Purpose Reverse Mortgages?

What are Single-Purpose Reverse Mortgages?

The most common kind of reverse mortgage on the market is the HECM, or Home Equity Conversion Mortgage, which is tightly regulated and insured by the FHA. However, there are other kinds of reverse mortgages out there, including both proprietary reverse mortgages and single-purpose reverse mortgages. Unlike HECMs, single-purpose reverse mortgages are not insured by the FHA, and, unlike both HECMs and proprietary reverse mortgages, they cannot be used for any purpose the borrower wants. Instead, funds from single-purpose reverse mortgages need to be used for one, specific, lender-approved expense. In most cases, this is paying off property taxes or making necessary home renovations.

What are Proprietary Reverse Mortgages?

What are Proprietary Reverse Mortgages?

The vast majority of reverse mortgages are classified as Home Equity Conversion Mortgages (HECMs) and are insured by the Federal Housing Administration (FHA). However, a small portion of reverse mortgages on the market are offered by private lenders, and are not insured or closely regulated by the FHA. In general, proprietary reverse mortgage loans can offer significantly more flexibility to borrowers, but also don’t have many of the protections that naturally come with HECMs. Despite that, certain federal laws do apply to proprietary reverse mortgages, including the fact that borrowers must be at least 62 years old to qualify.

Can a Reverse Mortgage be Refinanced?

Can a Reverse Mortgage be Refinanced?

Reverse mortgages can be a fantastic way for borrowers 62 years and older to supplement their retirement income by tapping some of the equity in their home. Reverse mortgages come in two major variants, HECMs, which are insured and tightly regulated by the Federal Housing Administration (FHA), and proprietary reverse mortgages, which are less regulated and do not require FHA mortgage insurance. Both HECMs and proprietary reverse mortgages can be refinanced, though it only makes sense to do so in certain, specific situations. In some cases, reverse mortgage refinancing can increase a borrower’s monthly disbursements, while in other situations it’s done to add a spouse to a reverse mortgage.

What are the Pitfalls of Reverse Mortgages?

What are the Pitfalls of Reverse Mortgages?

Reverse mortgages are a powerful tool that can help homeowners 62 and older access the equity in their homes. Reverse mortgages can help seniors significantly increase their retirement income, allowing them greater peace of mind and a higher quality of life during their golden years. And, in some cases, they can actually eliminate monthly mortgage payments, which can make a huge difference, especially for seniors who are living on a fixed income.

How Does a Reverse Mortgage Work When You Die?

How Does a Reverse Mortgage Work When You Die?

No one likes to think about death, but we all know it’s a stark and unavoidable reality. In fact, most smart borrowers actually calculate their estimated survival age when deciding if a reverse mortgage is a good choice for them. Lenders, of course, do this, too, to determine the amount of money they will make from their borrowers in aggregate. But when you pass away, what happens to your reverse mortgage? Let’s take a look.

What is an HECM?

What is an HECM?

The most common form of reverse mortgage in the United States is the Home Equity Conversion Mortgage, or HECM. All HECMs are insured by the Federal Housing Administration, or FHA, which means that, if a lender loses money as a result of a loan default, the government will repay part or all of their losses. Note that, just like other government-insured loans, reverse mortgages are issued by banks and private lenders, not the FHA. HECMs have a variety of rules, most of which are designed to protect borrowers. However, they do have a variety of restrictions, which may turn off some individuals.

Reverse Mortgages and Non-Borrowing Spouses: What You Need to Know

Reverse Mortgages and Non-Borrowing Spouses: What You Need to Know

HECMs, or Home Equity Conversion Mortgages, are the most popular kind of reverse mortgage in the U.S. If both you and your spouse are at least 62 years old, it’s generally a smart idea for both of you to become borrowers. This is because one co-borrower will not be negatively affected if the other co-borrower passes away or moves out (for example, one borrower may need to live in a nursing home.) In fact, the remaining borrower will still be able to receive reverse mortgage funds. However, if you want to take out a reverse mortgage, and your spouse is not yet 62, they cannot become a co-borrower. So, what happens if you die or move away? Keep reading to find out.

Reverse Mortgage Equity Requirements Explained

Reverse Mortgage Equity Requirements Explained

There is no specific, set-in-stone equity requirement for a reverse mortgage. However, in most cases, borrowers should have at least 50% home equity if they want to apply. Like we’ve mentioned in other articles, the FHA-insured HECM (Home Equity Conversion Mortgage) is the most common type of reverse mortgage in the U.S. HECM rules simply state that a borrower must either fully own their property, or must have a “considerable amount” of equity in the property in order to qualify.

How Do Reverse Mortgage Foreclosures Work?

How Do Reverse Mortgage Foreclosures Work?

Unfortunately for borrowers and their families, lenders are well within their rights to foreclose on a property with a reverse mortgage if the borrower has violated one or more of the clauses in the mortgage agreement. The most common reason why a reverse mortgage lender would foreclose on a property is if the borrower has failed to pay their property taxes, homeowner’s insurance, homeowner’s association fees, or other essential fees.

What are the Disadvantages of a Reverse Mortgage?

What are the Disadvantages of a Reverse Mortgage?

While reverse mortgages can be a great option for many older homeowners, they still have their fair share of disadvantages. Even if you’re 100% set on getting a reverse mortgage, you should still know exactly what you’re getting yourself into. In this article, we’ve detailed some of the less rosy aspects of a reverse mortgages in order to make sure you’re fully prepared.

What are the Reverse Mortgage Occupancy Requirements?

What are the Reverse Mortgage Occupancy Requirements?

If you want to get a reverse mortgage, you’ll need to maintain your home as a primary residence as long as you want to keep the reverse mortgage in place. Specifically, most reverse mortgage terms stipulate that a borrower must spend the majority of the year in their home (i.e. 6 months or more). In addition, borrowers cannot spend more than 1 2 months away from the home at any one time. For example, if a borrower needed to temporarily move into a rehab facility to deal with an injury or illness, they could not stay there for more than a year if they wanted to maintain the reverse mortgage.

Jumbo Reverse Mortgages: What You Need to Know

Jumbo Reverse Mortgages: What You Need to Know

Right now, the lending limit for reverse mortgages insured by the FHA, also known as Home Equity Conversion Mortgages (HECMs), is $679,650. So, if you have a home that’s worth significantly more than that, and you want to tap into your equity, an HECM may not really serve your purposes. Fortunately, there are proprietary reverse mortgage products, known as jumbo reverse mortgages, that can definitely satisfy your needs. In most cases, jumbo reverse mortgages are reserved for those who own homes valued at more than $1 million, but recent changes have made these products available to homeowners with homes valued at as little as $850,000.

Reverse Mortgage Changes in 2018: What You Need to Know

Reverse Mortgage Changes in 2018: What You Need to Know

2018 has been a year of big changes for reverse mortgages. Ever since HUD changed the reverse mortgage rules in Oct. 2017, the industry has shifted drastically. At first, it had the effect of reducing reverse mortgage volume, since HUD significantly tightened loan requirements for borrowers. Volume was also reduced because the rules decreased reverse mortgage payouts and increased upfront payouts for borrowers.

What are the New Reverse Mortgage Rules?

What are the New Reverse Mortgage Rules?

In mid-2017, the U.S. Department of Housing and Urban Development, or HUD, announced new rules that limit the amount of of money reverse mortgage borrowers can get from their homes, as well as increasing the upfront costs for reverse mortgages. The rules took effect on Oct. 2nd, 2017, and while they aren't retroactive, they do affect all reverse mortgages issued after that date.

What Does the AARP Say About Reverse Mortgages?

What Does the AARP Say About Reverse Mortgages?

The AARP, or American Association of Retired Persons, is the largest interest-group for retired people in the U.S. The AARP offers financial advice, including mentioning specific products that seniors should try (and those they should avoid) and helps seniors avoid financial scams as they get older As you might imagine, the AARP has a lot to say about reverse mortgages— both good and bad.

Is a Reverse Mortgage Right for Me?

Is a Reverse Mortgage Right for Me?

We have covered a great deal of information related to reverse mortgages on this site, but it still can be difficult to determine if a reverse mortgage is the right option for you. Money worries, fears about how long you’ll be able to remain in your home, and the desire to leave something for your children and grandchildren can all complicate the situation and make deciding tough. To help you make an informed decision, we’ll cover some of the most important factors to think about before deciding to go for (or to avoid) getting a reverse mortgage.