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Old 06-18-2012, 07:50 AM
 
4,269 posts, read 11,144,488 times
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Quote:
Originally Posted by redwolf fan View Post
The " bad " I keep hearing about are the very steep fees associated with a reverse mortgage.

They were pointed out by posters here ( not by people at McDonalds)
There can be some 'pretty steep fees' on a traditional mortgage as well.
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Old 06-25-2012, 01:48 PM
 
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Quote:
Originally Posted by howard555 View Post
A video on AARP gave an example. A couple's house was appraised for about $83,000.
The got a loan of about $45,000 and $9,000 went to fees. That's right at 20% in fees.
Yes, the fees are high. You're getting a loan you never have to make payments on. It's worth it, for some people. Not for others.
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Old 06-25-2012, 01:51 PM
 
478 posts, read 1,611,771 times
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Quote:
Originally Posted by Huckleberry3911948 View Post
here is why.
u can always borrow against the home and then sell later, or u can then later pay off or let it ride--- lots of options.
this is not true of borrowing against the home in case of reverse mortgage. u can no longer convey the property because it is no longer truly yours in a reverse mortgage.
also reverse mortgage puts a limit on what u can or cannot do with the house structurally after u sign. the chance of adding a room or altering existing space and then renting rooms out is gone after u sign reverse mortgage.
reverse mortgage is a one way trip. google it.
Wrong.

You retain title to the home just as you do with a regular mortgage. You are not restricted as long as:

1. You pay property taxes and insurance.
2. You don't do anything that degrades the marketability of the property or causes it to fall outside of FHA guidelines (most of this is common sense stuff, i.e., don't remove central heating, or tear off the roof without replacing it, etc.)
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Old 06-25-2012, 01:55 PM
 
478 posts, read 1,611,771 times
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Quote:
Originally Posted by TimtheGuy View Post
No problem Huckle. There are tons of misconceptions with reverse mortgages, the biggest being that you are signing your home over to the bank. It is why I am always so compelled to comment about them.

For many/most seniors it is not the best thing to do financially. However, it is a great 'last resort' option for those who want to stay in their home, but don't have the means to do so.

Many seniors are cash poor and equity rich. What good is all that home equtiy doing when they can't afford groceries, repairs, taxes, insurance, medications, etc? Many seniors can't qualify for a regular mortgage and even if they can, they are then stuck making monthly payments. The only ones who really "loose out" with a reverse are the kids who may inherit less.
It's a good option for a lot, but not all. Here are common scenarios where it makes sense:

1. If you're about to lose your home but have equity.
2. You have very little income, no assets, and cannot/will not leave your home, but DO have ample equity.
3. Your children are well off and don't need/don't care to inherit your house, or, are unwilling or unable to help you NOW with paying your bills.
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Old 11-12-2012, 02:06 PM
 
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Default Where can I find the low margin ADJ HECM SAVER?

[quote=anicon;24585396]

inspite of what your loan officer will tell you, interest rates and margins can be negotated with the lender. i've seen fixed rate hecms from 4.25%-5.56%. I've also seen margins on the adjustable rate hecm's from .5-3.5.

I am seeking a RM (HECM Saver-ADJ) and can't seem to find any lenders with margins lower than 2.25%. Anicon, where might I look to find the low margins you have encountered (i.e., margins on adjustable rate hecm's from .5-3.5%)?

Also, it seems there is no "Lending Tree" or "Bankrates.com" equivalent for RM's to really shop these numbers. I have to go thru the whole scenario individually with every street corner RM broker to get any figures. Thx, Phil
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Old 11-21-2012, 07:18 PM
 
75 posts, read 80,124 times
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to the best of my knowledge, most lenders are currently at 2.25 margins on libors. but hey you never know, you might get lucky and do better. the really low margins i saw were a few years ago thru bank of america. they don't do reverses anymore.

you might still get the lender to lower or waive origination fees on that program, especially if you have a competing offer. i've also seen pretty big differences in 3rd party closing costs, so get 2-3 offers at the same home value and compare.

hope that helps.
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Old 11-25-2012, 05:42 AM
 
201 posts, read 391,005 times
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Tell me if I am wrong:

If you are 62 years old and borrow about half of the value of your home in a reverse mortgage if you die in ten years your home is nearly worthless to your children because of the upfront fees and the 7% interest you are charged every year that will cause you to have basically no equity after ten year. (The compound interest of seven percent nearly doubles the prinicipal loan in ten years.)
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Old 12-01-2012, 01:18 PM
 
75 posts, read 80,124 times
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according to government calculations you're wrong. and where you're getting 7% interest from I have no idea.

the big unknown in your scenario is what the house will be worth 10 years from now. it could be double, it could be half, it could be the same.

according to my calculations (300K home value, 62 y/o borrower, fixed 4.99% int):
borrower will walk away w/ approx 170k in cash. for reverse mortgages hud projects home value will increase on average of 4% a year. therefore according to a typical reverse mtg amt schedule this home would have no equity remaing in loan year 22, which is when the borrower would be 82. i "think" this is about the estimated life expectancy of the borrower.

HOWEVER- if you don't take into account future home appreciation- you are almost correct. according to the amt sched i just ran the loan balance in this scenario would double in approximately 12 1/2 years.

these loans were't designed for a 62 year old to take a full draw.

interestingly enough. if you take the same set of factors, but instead of the 62 y/o taking the 170k in cash, they left the entire amount in the growing reverse mortgage credit line, you'll have about double what the home was originally worth avalable in the credit line in about 22 years. which could be more then what the home is worth at that time.

if you would have taken an adj rate reverse 6-7 years ago and left all the money in the credit line, you'd be a very happy camper right now
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Old 04-15-2013, 10:26 PM
 
3,240 posts, read 6,923,059 times
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Quote:
Originally Posted by anicon View Post
to the best of my knowledge, most lenders are currently at 2.25 margins on libors. but hey you never know, you might get lucky and do better. the really low margins i saw were a few years ago thru bank of america. they don't do reverses anymore.

you might still get the lender to lower or waive origination fees on that program, especially if you have a competing offer. i've also seen pretty big differences in 3rd party closing costs, so get 2-3 offers at the same home value and compare.

hope that helps.
That is a good thing. Imagine being over 62 and having questions about a complex mortgage product. So, you log into an idiot-attracting site like Lending Tree.

You know what happens next??

Lending Tree sells the lead information fifteen times. Not 3 or 4, they sell it and re-sell it, and sell it again a month, 2 months, six months later as Aged Leads.

And you get barraged by hundreds of calls from marginally intelligent people who call and call and call, and maybe you have ONE good conversation, but in the scrum of messages and calls and numbers and template emails, you can't remember one from another.

And you regret ever logging onto that IDIOT-friendly website.

HECM loans are complex. They are best explained by someone fluent and patient, who can simplify complex terms. People who buy lending tree leads are the bottom of the barrel of sophistication in banking. So there's your "best rate" opportunity, as far as you know.

Advice to OP: Find a face-to-face Lender and see if they listen as much as they talk.
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Old 04-15-2013, 10:32 PM
 
Location: earth?
7,288 posts, read 9,966,130 times
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Quote:
Originally Posted by Huckleberry3911948 View Post
here is why.
u can always borrow against the home and then sell later, or u can then later pay off or let it ride--- lots of options.
this is not true of borrowing against the home in case of reverse mortgage. u can no longer convey the property because it is no longer truly yours in a reverse mortgage.
also reverse mortgage puts a limit on what u can or cannot do with the house structurally after u sign. the chance of adding a room or altering existing space and then renting rooms out is gone after u sign reverse mortgage.
reverse mortgage is a one way trip. google it.
I disagree with your assessment.

A reverse mortgage is a mortgage. You still hold title to the house and as title holder can do whatever you have always been able to do.

A reverse mortgage has fees (like other mortgages) and when you move or die, the house must be sold within a reasonable time and the loan must be paid off.

Where did you get the erroneous hype? Links, please.
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