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azloafer, the payments made to you in the reverse mortgage have an imputed interest rate. As a result, the maximum paid to you cannot go on the rest of your life regardless of age. To do so would jeopardize the "lender" in providing funds in excess of property value.
Their has to be a "cap" on the amount they will ultimately provide.
New to CA - you are wrong - maybe you should check into how a Reverse Mortgage works like azloafer. He makes valid points and it will go on for as long as the owner decides to live in his house. Acutally one of the payment options allows for the amount of money to the owner to grow. If the money is placed in a Reverse Mortgage Line Of Credit the growth of the money in the line of credit increases by .5% more than the interest rate being charged on the money used. For example if the interest rate today is 4.5% (which it is) then the amount in the LOC will grow at 5%. Can you get 5% at your bank? Learn the facts.
The lender does earn interest on the money and the government guarantees the lender will not lose money even if the amount owed exceeds the value of the property. The governement protects themselves by charging a Mortgage Insurance Premium as part of the closing costs. I would like to hear from people who have a Home Equity Conversion Mortgage (the most common RM and the only one guaranteed by the Goverment). I have talked to hundreds of people with them and they are all positive experiences.
yea, what if we do?? Then rates will go up. So????
what if rates go down???
what if rates stay relatively stable???
If rates go up, rates go up on adjustable mortgages and the cost of money goes up for the lenders....how is that usurious????????
Why is it when a lender is charging an interest rate of 8% that people think the lender is making 8%?? Do you think money is free to lenders?
What praytell are you talking about? I never said anything about illegal rates or lenders not making money. What universe were you in when you posted this. Clearly what you say is true however there is a definite impact on the borrower and the eventual amount of money left for the estate etc. Do you not think there is a consequence for any action? Rates up or down have consequences for both borrowers or lenders not a so what. Or do you prefer non educated borrowers who don't understand the metrics of their environment? Happy New Year I hope you made it to work ok and aren't still sleeping it off.
From the mouth of the Reverse Mortgage Industry. As was said before think about the impact of double digit inflation before you sign on the dotted line.
From the mouth of the Reverse Mortgage Industry. As was said before think about the impact of double digit inflation before you sign on the dotted line.
If you knew anything about the RM candidates, you would realize that rate is not the major concern. The big factor in for RM candidates and their heirs is quality of life.
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Deja Vu
