• Question
  • Is a reverse mortgage the least expensive option and if so, which option should I choose - lump sum

    Asked by a 83 year old man from Tulsa, OK on 1/16/2013

    Is a reverse mortgage the least expensive option and if so, which option should I choose - lump sum / monthly payout or line of credit

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  • Categories: Loan Amount and Type, Reverse Mortgages

Answers

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  • Editorial 

    Editorial 
    NewRetirement

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  • Reverse Mortgages are absolutely NOT the least expensive option for eliminating mortgage payments or releasing some of your home equity to use on retirement expenses.

    Downsizing to a less expensive residence or cash out mortgage refinancing are more cost effective options.

    However, many people wish to stay in their current home and a Reverse Mortgage enables you to do that.

    As you know, there are many different kinds of Reverse Mortgages. There are:
    -- The traditional HECM Reverse Mortgage (higher interest rates, but also enable borrowers to access higher loan amounts) and HECM Saver Reverse Mortgages (lower fees and interest, but not as much money can be accessed by borrowers)
    -- Reverse Mortgages with fixed or variable interest rates. (Fixed interest rates are generally lower, but a Reverse Mortgage with a fixed rate requires that you take all of your available loan amount up front -- and since you pay interest on the amount of money you use -- this can be expensive.)
    -- Different ways your Reverse Mortgage can be paid out -- lump sum, home equity line of credit, annuitized monthly payments. (When you secure a Reverse Mortgage you pay interest on the amount withdrawn. So if you take all of the money in a lump sum, you are paying interest on all of the money. If you take it as a home equity line of credit, then you only pay interest on the money you withdraw from that account.)

    In many cases, if you want to minimize the costs associated with your Reverse Mortgage loan, then you would probably want to pursue a HECM Saver with a variable interest rate taken in a home equity line of credit. However, your loan amount and other factors will heavily impact the costs.

    If you would like to discuss this with a Prescreened Reverse Mortgage lender, you can find one on link below. These lenders can help you analyze your exact loan amounts, interest rates and more for all of the different kinds of loans.
    https://www.newretirement.com/reverse-mortgage-marketplace.aspx

    We wish you all the best!
    http://www.NewRetirement.com


  • Login to rate this answer:   Answered on 1/16/2013
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  • I can pay 100% of your fees if you selected the 4.99% Standard fixed interest rate program, making the Reverse Mortgage a cost effective solution. So I'll quote that program.

    If your home in Tulsa, OK. appraised for $200,000.00, you'd receive $137,800.00 in cash. You'd pay for the appraisal upfront, and I'd reimburse you for it, and pay all your other fees, when your loan funds.

    If a Credit Line or Monthly Check make more sense for your situation, I can't pay all your fees, but those distribution methods can leave more retained equity in your home, if utilized properly, and may be a better solution, especially if you're considering leaving as much equity as possible to your Heirs.

  • Login to rate this answer:   Answered on 1/25/2013
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  • A reverse mortgage is a loan for seniors age 62 and older. HECM reverse mortgage loans are insured by the Federal Housing Administration (FHA)1 and allow homeowners to convert their home equity into cash with no monthly mortgage payments. When a financial emergency rises, don't panic! Instead, know your options for short term loans for bad credit in USA.

  • Login to rate this answer:   Answered on 5/3/2018
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  • A reverse mortgage is a loan for seniors age 62 and older. HECM reverse mortgage loans are insured by the Federal Housing Administration (FHA)1 and allow homeowners to convert their home equity into cash with no monthly mortgage payments. Get short term loans bad credit online with no credit check from direct lenders. When a financial emergency rises, don't panic! Instead, know your options for short term loans for bad credit in USA.

  • Login to rate this answer:   Answered on 5/3/2018
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.