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Reverse Mortgage Borrower Assessment Explained

By On August 3, 2011

The implementation of a financial assessment tool is now imminent for reverse mortgage applications.

After Wells Fargo recently exited the business, citing borrower tax defaults as a major reason, the issue has been front and center for industry execs.

There is talk about a uniform 50% debt to income ratio being applied to all new reverse mortgage applications. Debt to income ratios would be assessed after the benefit of the reverse mortgage proceeds were taken into account. Your monthly scenario could look somthing like the following.

Before the reverse mortgage:

$1000  mortgage payment (including taxes and insurance)

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Reverse Mortgage, Now Is The Time

By On June 28, 2011

With all of the changes in the reverse mortgage industry lately, it can be stunning when researching lenders and products. It is important to know that even with the decisions of Wells Fargo and Bank of America to exit the reverse mortgage business, there remains a core group of lenders that use 100% of their resources to deliver reverse mortgages to borrowers over age 62, nationwide.

These lenders are an elite group of banks that specialize in reverse mortgage lending and have vast experience with these loans. While other banks are pulling out, these lenders keep growing and expanding and making reverse mortgages more affordable than ever.

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Reverse Mortgage Purchase Popularity Gains

By On March 8, 2011

It has been quite some time since the FHA (HUD) started insuring reverse mortgage purchase loans, however the program never really took off. Much to my surprise, even some of the more sophisticated buyers were not using reverse mortgages to buy homes. I have always promoted reverse mortgage home purchase scenarios to borrowers but to no avail. Few of them could see the absolute sense this type of transaction makes.

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Reverse Mortgages for Free and Clear Homes

By On October 26, 2010

Reverse Mortgage with Credit Line Feature

With all of the changes in reverse mortgages these days, it pays to review your options again, if you are in the process of applying for one. The most popular program today is the fixed interest rate, lump sum pay-out program due to the amount of funds available to the borrower usually being greater with this option. It’s no secret that most home owners will want to get the most money available these days and probably because they need to pay off an existing mortgage but what if your home is free and clear of any mortgages? The other option is an adjustable interest rate reverse mortgage or the lower paying HECM Saver. Again, most borrowers might want to gravitate to the peace of mind that comes with a fixed interest rate but what if the rate on your loan was tied to the amount of funds available for future payments to you? In this case, you might get an unexpected bonus if and when interest rates rise. That is exactly what happens when you choose the adjustable interest rate option on your reverse mortgage.

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4.99% with 1.25% MIP or 5.56% with .50 MIP?

By On September 30, 2010

It’s really a personal decision as to whether or not to chose the newer MIP of 1.25% vs. .50%. If you have the choice, the newer loan with the higher MIP will yield more money, as stated in another post but what will be the difference in the ongoing costs? They will be higher but how much? Simple math will fix this and make your decision much easier.

Current loan note rate 5.56%

Plus current MIP .50%

Total Annual Rate 6.06%

New loan note rate 4.99%

Plus new MIP 1.25%

Total Annual Loan Rate 6.24%

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