Reverse Mortgage Guide

Because those who get reverse mortgages do not have to repay such financing as long as they remain in their property, it may seem as though getting one interest rate or another may not make a great deal of difference.

However, Joffrey Long, President of Southwestern Mortgage, a provider of reverse mortgages throughout California and in parts of Nevada, points out that “during the past three years, there’s been a huge increase in the choices and benefits that reverse mortgages provide to borrowers.

“Many previously undecided homeowners,” says Long, “are making the move and enjoying the benefits of a reverse mortgage. The big change that’s helping them get started — the FRRM (Fixed Rate Reverse Mortgage)”

Long, President of the California Mortgage Association, says that “although homeowners don’t make payments on a reverse mortgage as long as they live in the home, the adjustable rate can still affect the amount they owe on the property over a longer period of time. A fixed rate enables them to know in advance how much their loan balance will be in the future.

“Pros and Cons? Borrowers might receive less money from a fixed rate reverse mortgage, depending on their age. This is because the amount of money a borrower receives from a reverse mortgage is based partly on the interest rate at closing — the lower the rate, the more they receive. Adjustable rate reverse mortgages have a slightly lower rate, meaning that the borrower could receive more money than with a fixed rate. As part of the decision making process, homeowners should look at the difference in the amounts available on both the fixed and adjustable rate reverse mortgages.”

This entry was posted on Monday, October 8th, 2007 at 5:26 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.