Welcome to Mortgage Guide
Mortgage Banking Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Reverse Mortgage Basics
from:Many consumers can benefit from an introduction to the reverse mortgage. This advance is a type of loan that allows a homeowner to borrow from their home’s value. The reverse mortgage has many interesting aspects to it for some homeowners to consider.
The borrower does not have to pay back any of the money that he uses in the course of the reverse mortgage. The package is designed for retired homeowners who need money but do not want to sell their current residence. Instead of selling, the customer simply borrows money against the value of the home.
The debt is to be repaid when the home is sold or in the event of the borrower’s death. Many elderly clients can benefit from this type of advance because they do not have to worry about repaying the debt. The money owed is simply taken out of the sale price when the home is sold.
But what if the borrower dies? The individual that inherits the home also inherits the debt. This is typically little trouble considering that the value of the home should greatly exceed the cost of paying off the debt. The loan company will work with the person that inherits the property to work out a viable agreement.
There is little risk of owing more than the home is worth. The lender accounts for the initial mortgage amount and the lender figures in the interest rate. The length of the loan and the home’s appreciation are also factored into the agreement. The amount of the money lent will not exceed the value of the home through the term of the loan.
Basic Requirements
A person will be typically unable to get a reverse mortgage if there is a lien on the property. In some cases, the borrower can use money that he receives in the loan to pay off any liens against the house. The lender will require that the lien be paid in full before making an agreement or the consumer will be required to pay the lien using monies from the loan.
The amount of the loan depends on a few factors. The home should be appraised and any necessary repairs must be made. The property’s location is another important component in the lending process. Well sought-after properties will yield more worth.
The interest rate will have an effect on the monthly installment and the overall cost of the loan. The borrower’s age is also a consideration. The reverse mortgage is designed for senior citizens. The older the borrower is, the more money he can receive through the loan.
The consumer has a few choices when it comes to the distribution of funds. He can opt for a lump sum, monthly installments or a line of credit through the reverse mortgage.
Mortgage Banking News
Worried worker: Spend savings on mortgage?
Dear Dr. Don,I am a 34-year-old New Yorker who works in the banking industry. I own a small studio apartment that I bought when I was 27. I have $134,000 left on the mortgage at 5.625 percent interest. ...
Read more...International City Mortgage Celebrates 25th Anniversary
International City Mortgage, a privately held residential mortgage banking direct lender, celebrates its 25th anniversary, citing focus on purchase transactions and a smart growth plan as major contributors to its longevity.ORANGE, CA (PRWEB) May 23, 2012 International City Mortgage (ICM) today announced that it is celebrating its 25th anniversary as a residential mortgage lender.Founded in 1987 ...
Read more...S&T Bank Appoints Stephanie Gaydis to Assistant Vice President Mortgage Banking Business Development Officer
INDIANA, Pa., May 21, 2012 /PRNewswire/ -- S&T Bank (NASDAQ: STBA), a full-service financial institution with branch locations in 10 Pennsylvania counties, is pleased to announce the recent appointment ...
Read more...Bankrate: Mortgage Rates Hold at Record Lows
NEW YORK, May 24, 2012 /PRNewswire/ -- Mortgage rates were little changed, remaining at record low levels. The average rate on the benchmark 30-year fixed mortgage rate was unchanged at the record low ...
Read more...Bank of the West Sees Rise in Mortgage Applications from HARP 2.0
SAN FRANCISCO, May 14, 2012 /PRNewswire/ -- Bank of the West has seen a rise in mortgage loan applications since April as homeowners seek to take advantage of low interest rates under the government's ...
Read more...