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Are You Applying for a Reverse Mortgage? Here Are 3 Considerations You’ll Need to Make

December 23, 2014 by Kay Monigold

Are You Applying for a Reverse Mortgage? Here Are 3 Considerations You'll Need to MakeIf you’re a homeowner who is looking to tap in to the home equity that you’ve spent years building you may be interested in a “reverse mortgage” or “home equity conversion mortgage”. While these unique financial tools aren’t for everyone, if you qualify for a reverse mortgage you’ll find that this might be the perfect financial solution which allows you to pay off your existing mortgage, or for some other regular expenses that you have.

Let’s take a closer look at how reverse mortgages work, including how to qualify, what happens to your existing mortgage and what a reverse mortgage might cost.

Do You Meet the Requirements for a Reverse Mortgage?

In short, a reverse mortgage is a type of home loan in which the lender pays you monthly payments or a lump sum based on the equity that you’ve built up in your home. At some point in the future – when you move out of the home, or pass away – the reverse mortgage loan will become payable.

As mentioned above, reverse mortgages aren’t for everyone. You’ll need to be at least 62 years of age and be a homeowner who has enough equity built up in your home to qualify. You’ll also need to understand that your lender will scrutinize your current financial position to ensure that you can keep up with property taxes and other regular costs that you may incur.

What Happens to Your Existing Mortgage?

If you have a regular mortgage it’s still possible to qualify for a reverse mortgage, but you’ll need to use some of the proceeds to pay off your existing mortgage. For example, if you have $50,000 owing on your mortgage and you receive a reverse mortgage for $100,000, you can pay your initial mortgage off and still have $50,000 to use as you see fit.

Do You Know What a Reverse Mortgage Costs?

Keep in mind that like a traditional mortgage, a reverse mortgage has costs attached. You’ll need to pay mortgage insurance premiums, service fees, lender fees and other third-party fees that are typically referred to as “closing costs”.

Learn More About Your Reverse Mortgages Options

A reverse mortgage can be an excellent way to take advantage of the equity that is currently locked up in your home. To learn more about reverse mortgages, contact your local mortgage professional and they’ll be able to share their guidance and expertise.

Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips, Mortgages, Reverse Mortgages

What’s Ahead For Mortgage Rates This Week – December 22, 2014

December 22, 2014 by Kay Monigold

What's Ahead For Mortgage Rates This Week December 22 2014

Last week’s scheduled economic events were few but informative. Housing related reports included the National Association of Home Builders/Wells Fargo Housing Market Index for December, which stayed close to a nine-year high reading of 59 in September. December’s reading was 57 and fell two points shy of the expected reading of 59. November’s reading was 58. Readings above 50 indicate that more builders are positive about market conditions than those who are not.

Housing Starts for November were lower according to the Department of Commerce’s report released Tuesday. The reading for November was 1.028 million starts on a seasonally adjusted annual basis. Analysts expected a reading of 1.035 million housing starts based on October’s level of 1.045 million starts.

Fed Confident, but Watchful of Economic Conditions

The Fed’s Federal Open Market Committee (FOMC) released its statement at the conclusion of its final meeting in 2015. Fed Chair Janet Yellen also gave a press conference that primarily supported information contained in the statement. The Fed did not foresee rising the target federal funds rate until mid to late 2015, and said that no changes were likely to be made at the first two FOMC meetings of the year. The target federal funds rate remains steady at 0.00 to 0.250 percent. FOMC members noted improvement in labor markets, but said that housing continued to recover at a slow rate. The Fed repeated its customary statement that FOMC members would monitor ongoing economic conditions and developments as part of any decision to change monetary policy. Chair Janet Yellen affirmed the committee’s position in her press conference.

Mortgage Rates, Jobless Claims Fall

Mortgage rates fell according to Freddie Mac. The average rate for a 30-year fixed rate mortgage was 3.80 percent as compared to the prior week’s reading of 3.93 percent. The average rate for a 15-year fixed rate mortgage was 3.09 percent, which was 11 basis points below the prior week’s reading. 5/1 adjustable rate mortgages had an average rate of 2.95 percent; this was three basis points lower than the previous week. Discount points remained steady at 0.50 percent with the exception of average points charged for a 15-year mortgage, which increased to 0.60 percent.

Weekly jobless claims fell to 289,000 against expectations of 295,000 new jobless claims; expectations were based on the prior week’s reading of 295,000 new claims. Analysts cautioned that weekly jobless claims readings can be particularly volatile during the holiday and early winter season.

What’s Ahead

Economic news scheduled for next week includes the National Association of Realtors® report on November sales of existing homes and November sales of new homes, which is issued by the Department of Commerce. Consumer sentiment, consumer spending and core inflation reports will also be issued next week. No economic reports will be issued Thursday or Friday due to the Christmas holiday.

Filed Under: Market Outlook Tagged With: FOMC, Freddie Mac, Market Outlook

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Kay MonigoldKay Monigold
Owner/Mortgage Broker/Residential Mortgage Loan Originator
NMLS#1086176

Steven LoweSteven P Lowe, Sr
Residential Mortgage Loan Originator
NMLS #1085638

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