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Archive for June, 2008
When you think of reverse mortgage, what are the things that come to your mind? What are the major questions? Imagine yourself sitting in front of a computer, what sort of reverse mortgage search would you put on your favorite search engine? Well, here we try to answer some of these questions. Following are a list of a few reverse mortgage search which are very popular.
The first reverse mortgage search has to be the search for a lender or a broker. While the lender is the organization which will extend the reverse mortgage loan to you, the broker is a person who can help you get in touch with a lender who is willing to give you the loan against your home equity. Finding the right lender and the right reverse mortgage program is the most important step as it will determine the amount of loan obtained the interest rate and the other associated costs.
The second reverse mortgage search would be for better interest rates. Reverse mortgage is a very competitive industry and there are a lot of lenders who are willing to give out loans at lower interest rates just to beat the competition. So it is very important that you search and do proper research, get information about various lenders and their interest rates before deciding to go for one of them.
Reverse mortgage costs can run into thousands of dollars. The originating and the closing costs, the appraisal and the title search costs, the mortgage insurance premiums all together can be quite a hefty amount. The fees charged vary from lender to lender and from program to program. Hence another important reverse mortgage search has to be the search for programs or lenders who are charging the lowest fees or are willing to waive off certain fees under specific conditions.
If you are a lender, then you will have to look for senior citizens who will be willing to take reverse mortgage loans from you. A good way to do it is to approach the lead generating agencies that specialize in identifying and providing the details of prospective borrowers, off course for a certain fee. Thus for a lender, search for a lead generating agency can be an important reverse mortgage search.
Lastly, if you are someone who wants to make a career in the reverse mortgage industry, then reverse mortgage search for jobs would be of most importance to you. This growing industry is proving to be a hot bed for young professionals who are willing to work and make great careers in this industry.
Thus we see that reverse mortgage search is important for everyone in the industry, be it a lender or a borrower or someone who is seeking to make a career in this industry.
Every financial program or instrument has certain pros and cons associated with it. Also, the pros and cons will vary from person to person and is not the same throughout. That is why it is said that one needs to weigh them and see how each program suits the individual needs.
One of the pros for reverse mortgage is that it provides a cash flow opportunity for senior citizens by using illiquid assets like property which they could not have used in any other way. This additional cash can be used in any way they deem fit, can be invested in some interest earning instrument or spent as required. Thus, this additional cash flow helps them maintain their lifestyle that they might want to lead. This amount can even help them meet unexpected expenditures or even afford a few luxuries that they always dreamt of having.
The greatest of the pros has to be that they get to stay at their home. This can prove to be a huge benefit, both financially as well as emotionally as it has been seen that senior citizens do not like leaving their home that easily. Alternative to reverse mortgage include renting out the property or selling it, both of which necessitate the owners to vacate the property.
Another one of the pros is that the liability of the debt can never exceed the value of the property when it is sold. That means that in case of a drop in property value, the difference between the loan amount and the property sale value is borne by the lender. Thus, under no circumstance will the burden be passed on to the heirs of the homeowners.
Now coming to the cons, the most important one would be that the owners would lose their home equity to the lender who has given them the reverse mortgage loan. This can be a major setback to people who were hoping to leave something for their children or heir as after their death, the property can be sold of by the lender to recover the debt amount. Also, the children or the heir should be supportive of this fact and be willing to sacrifice the property in order for their parents to have a better lifestyle.
Another one of the cons is that the interest rates levied on the reverse mortgage loans are much higher than normal mortgage loans. So the debt is considerably higher in case of reverse mortgage loans as the interest accrued is much higher.
Thus we discussed the reverse mortgage pros and cons. However, as we can see, it is ultimately the choice of the individual whether to go for a reverse mortgage.
Reverse mortgage may be a great opportunity for senior citizens to be able to afford a good lifestyle. Unfortunately, not everything about reverse mortgages is good. One should be aware of the pitfalls associated with reverse mortgages.
The first of the many reverse mortgage pitfalls would be the fact that the age of the youngest borrower is considered while calculating the amount of the loan. It has been found that the older the homeowner is, the better a deal in reverse mortgage he/she can get. So if a couple is availing a reverse mortgage, the age of the younger member will be considered, thus it is definitely going to be a worse of deal that it would have been if the older member had borrowed as an individual.
The second of the reverse mortgage pitfalls is the high interest rates that are levied on the loan amount. It has been found that the rates are usually steep. Also, service fees which are charged have also been found to be quite high. The fees can run into thousands of dollars, even for a small amount of loan. Couple these with the taxes that you have to pay, the insurance costs for the property as well as the costs incurred to maintain and upkeep the property. It has been found that at the end, the cumulative expenses for the property comes up to be equivalent to the monthly loan advance that you will get by reverse mortgage. In some cases, it might be higher. So please do your calculations properly before taking up a reverse mortgage.
Another one of the possible reverse mortgage pitfalls could be that in many cases the lender takes certain equity in the property value. This point may be very important if the property value increases drastically over a period of time. If the lender has taking a part of the equity, then part of these property value gains from the sale will go to the lender which rightfully should be going to your heir after repayment of all outstanding reverse mortgage loans.
Last but not the least of the reverse mortgage pitfalls would be the reduction of home equity. As the homeowner debt increases, his/her home equity keeps decreasing till the time it becomes zero. So homeowners, in this case, will not be able to pass on to their heirs the property that they owned.
Thus we see that reverse mortgage pitfalls need to be noted and other options to be weighed before taking a decision. Alternatives like selling off the property, keeping the money in an interest bearing instrument and living in senior citizen quarters may be a better option for some.
Senior citizen and reverse mortgage go hand in hand. Reverse mortgage is a financial instrument specifically developed for the senior citizen. The eligibility for reverse mortgage is 62 years which means that only senior citizens can avail of this scheme. No wonder that reverse mortgage has caught on so well as more and more senior citizens are opting for it.
Let us first understand what reverse mortgage is and why senior citizen and reverse mortgage are such a perfect complement. Reverse mortgage is a way of using the illiquid assets of a senior citizen, namely home equity, to get a loan. In this, the senior citizen gets either a lump sum or a monthly instalments or extension of credit line during their life time or their stay in that property. Thus, this is an opportunity for them to lead a better lifestyle due to the additional cash flow. Also, they get to stay in their property as long as they like which is a huge emotional benefit for senior citizens who usually do not like to move to a new place. Reverse mortgage enables them to be able to afford things that they always wanted, fund vacations, make expensive purchases etc. Another good thing is that even if the loan amount exceeds the sale price of the property, the liability of the loss for the lenders cannot be passed on to their heirs.
On the flip side, their home equity keeps decreasing as the loan outstanding against them keeps increasing. Thus, they might not be in a position to pass on their property to their heir as they would have ideally liked to.
Reverse mortgage loan advances are not taxable, hence this is deal for senior citizens as it does not increase the tax burden on them. Reverse mortgage also does not affect social security benefits and Medicare benefits. However, supplementary benefits like Medicaid may get stopped if the monthly income after taking the loan advances into account goes beyond the maximum limit of eligibility for these benefits.
Also, the reverse mortgage loan becomes due on death of the borrowers or when he/she sells or moves out of the property. However, hospital stay is not counted in this and the borrower can stay in a hospital facility for up to 12 months before the loan becomes due for repayment.
One thing to note while taking reverse mortgage loans is the associated costs which are charged by lenders. Originating costs, closure costs, mortgage insurance costs and other service costs are some of these. Senior citizens should take note of these costs as they can be quite hefty at times.
Bank of America reverse mortgage programs are one of the most widely known programs in the United States. Bank of America reverse mortgage is known as Senior Equity Reverse Mortgage. In 2007, Bank of America bought over the business of Reverse Mortgage of America to establish itself as a prominent player in this market. Bank of America reverse mortgage program ranks among the top three providers, the other two being Wells Fargo and Financial Freedom. 2007 saw a huge increase in reverse mortgage demand as the baby boomers start to retire and thus the acquisition was seen as a very good move by Bank of America to strengthen its reverse mortgage business.
Want to know more about the Bank of America reverse mortgage program? Do you need the details of the program, its eligibility criteria, its loan limit etc.? Well the best place to get all the information is to visit the website of Bank of America http://reversemortgage.bankofamerica.com/. This is a website dedicated to provide information about Bank of America reverse mortgage programs. The website is divided into sections where you can get guidance on the schemes and get details of the program. There is also a section to provide counseling to senior citizens to determine if reverse mortgage is the right financial decision for them.
The guidance section is a detailed guide to understand how the reverse mortgage works, its implications, the benefits from reverse mortgage loans as well as a few of the caveats. This is provided in the form of a detailed tutorial which is self explanatory and easy to understand.
The Bank of America reverse mortgage website also houses information about the various products which is on offer. There are mainly two products on offer, one is called the Home Equity Conversion Mortgage while the other is called Senior Equity Reverse Mortgage platinum. The added benefit of going for a Senior Equity Reverse Mortgage platinum product is that you can use the loan advances to buy a new home which is not allowed under the other scheme. If you are not sure whether you are eligible for these products or how much loan can you get, then there are calculators provided to help you do just that. You can even take appointments online to meet a Bank of America reverse mortgage loan counselor.
The Bank of America reverse mortgage is not available in all states. So it is advisable to call the Bank and find out if the program is available in your state. Bank of America reverse mortgage business is all set to increase even more with the bank increasing its presence in different parts of the country.
We are seeing increasing number of people who are choosing to make their career in the mortgage or the reverse mortgage industry. This industry is growing very fast and is gaining acceptance of its clientele. Thus, this industry is proving to be a great way to build your career. No wonder that reverse mortgage jobs are some of the most sought after these days.
But lets us first understand the types of reverse mortgage jobs which are existing. The first of the reverse mortgage jobs would be that of a reverse mortgage broker whose purpose is to get a senior citizen and a lending company together and get a deal going and in turn earn commission on each such deal. This is a very lucrative profession as the more deals you make, the more money you make. You can work as a reverse mortgage broker from your home as well as it does not need an office space as such. There are however many big brokers who hire people to help their brokerage agency. No wonder that brokering is one of the most in demand reverse mortgage jobs now.
Another one of the reverse mortgage jobs would be to work with the various lending companies. Your primary work would be to scrutinize applications, process them and interact with the borrowers, mostly senior citizens and looks at ways to fulfil their financial expectations. You might have to deal with brokers and other agents as well as part of your job.
Third of the reverse mortgage jobs is to work in third party organization which do appraisal of property and provide other such services to the lenders and borrowers. As we know, the reverse mortgage loan amount is dependent on the value of the property which will be pledged. The job of the independent appraiser is to ascertain the value of the property based on which the loan amount will be fixed. With more and more people going for reverse mortgage, appraisal of projects is turning out to be a good business opportunity. Also, people trust independent third party appraisers because they are fair in their appraisal. So a lot of third party service providers have sprung up who are in this business.
Lead generation agencies are another source of reverse mortgage jobs. There are many lead generation agencies whose job it is to find out prospective clients for reverse mortgage, collect their contact details and pass it on to the lending companies for a charge.
Thus we see that reverse mortgage jobs are many. There are a lot of options available. Now it is up to you to decide what type of job you would want.
The popularity of reverse mortgage is mainly due to its utility to senior citizens as a supplement to social security benefits. It helps them to afford a lifestyle that they could not otherwise live. However, a lot of fees and other associated costs are involved and as with any other financial transaction, scams and fraud cases are increasingly becoming very common. Reverse mortgage class action lawsuits are primarily meant to protect the senior citizens from such spurious operators and lenders. The recent past has seen a lot of reverse mortgage class action lawsuits taking place.
But first, what is a class action lawsuit? What is the purpose of a class action lawsuit? Class action lawsuit is a form of civil suit. A class action lawsuit is brought on by one or more people to represent their grievances as well that of many other people who are suffering from similar problems.
Reverse mortgage class action lawsuits start with one person observing some anomaly in the fees being charged to him by the lender. This person then tries to contact the lender and get a clarification on the same and get it corrected. In many cases, excessive fees are charged by the lenders for things which are unrelated to the loans and these are included as part of the loan so that they also get compounded at the same rate of interest. Lenders are making huge amount of money by these methods while providing very little or no service for the fees charged to the borrowers. This person then can find out through friends and relatives if others in similar cases are also being overcharged. If so, this person can then contact a civil action lawyer to help form a case against the lender. If the judge feels that the claims are legitimate and the borrowers were indeed overcharged, he/she will ask the lender to refund the money back to the borrowers.
Reverse mortgage class action lawsuits are not an easy affair to organize. It involves a lot of individuals and one has to get their individual statements. Thus, it requires quite a bit of work to organize these people and their statements. If you do not understand the proceedings, you can seek counsel from a legal worker or can even search the internet which has a huge repository of information.
The reverse mortgage class action lawsuits are usually a very long drawn affair which may go on for years. If you get receive a notice to join a class action lawsuit for having being victimized, all you have to do is to agree to the lawsuit and give a statement if it is deemed necessary. At the end, the lawsuit may go in favor of the lenders in which case, you win nothing at all. Otherwise, the court will order the repayment of all the wrongly charged fees.
Thus we see that reverse mortgage class action lawsuits are to protect the interests of the senior citizens and hence should be supported if you feel that you have been victimized.
Reverse mortgage has turned out to be a very useful tool for senior citizens to get a regular payment against their property. But the most important question that they have in mind is the amount that they can get. One option could be to approach a counselor. The other option which is much more convenient and faster would be to use a reverse mortgage calculator.
In order to get an estimate of the reverse mortgage, one has to feed certain details to the reverse mortgage calculator. The figures to be entered to the calculator is the fair value of the property, any outstanding lien against the aforesaid property, the age of individuals who would be part of the deed and the location of the property where the reverse mortgage is being carried out. Some reverse mortgage calculator also consider factors like estimates for repairs of property, monthly payments of mortgage installments, any upfront cash requirements and desired credit level in to consideration while doing the calculation. The reverse mortgage calculator gives quite an accurate result and it is fairly close to the figure that you will actually get.
However, there are certain things that one should keep in mind while using the reverse mortgage calculators. Firstly, in order to calculate the value of the reverse mortgage, all calculators use interest rates. Unfortunately, not all calculators are always updated with the current interest rate prevailing in the market. This can lead to erroneous results. Also, some of these calculators take age as an input rather than the exact date of birth, which can lead to further mistakes in the estimate. Also, local cost variables are not considered by most of these calculators and are a standard disclaimer given with the calculator. Thus, it is best that the result of a reverse mortgage calculator is treated as an estimate.
Also, the policies about how much are the value to loan conversion ratio are different for different sources. So, a reverse mortgage calculator may not take into consideration all these factors. Thus in order to get an exact figure, it is best to approach an approved agent and get the figures after speaking to a loan officer. Please note that reverse mortgage estimates are always free of cost, so if anyone charges you for them, you can report the violation to the relevant authorities.
Many reverse mortgage calculators are available over the internet. Reverse Mortgage Nation is a good place to get an online calculator. It also has an exhaustive listing of loan officers on the website. AARP website (www.rmaarp.com) also provides a calculator. Other websites offering these services are www.financialfreedom.com and www.revmort.com.
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