• Question
  • Amortization table - reverse mortgage

    Asked by someone from Seattle, WA on 4/27/2016

    I am still unsatisfied with all the information provided about reverse mortgages because there should be some kind of amortization tables for reverse mortgages to give us a better idea of what it is alike .. We may sell homes during the term of reverse mortgage so we would like to know how much left we can get ... This is called financial strategies or plannings.

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  • Categories: Reverse Mortgages, Refinancing

Answers

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  • Great point! While online calculators provide you with an estimate of total proceeds, the only way you can truly evaluate this strategy is to start with one or several free written proposals from a credible lender. A written proposal will answer all your questions about interest rates, closing costs, monthly draw down amounts and even provide an amortization schedule so you can see how your line of credit and accumulated balance grows over time!

    We can certainly help you with this so you can evaluate the amortization schedule. Please call us toll free at 888-411-RETIRE (7384)

  • Login to rate this answer:   Answered on 4/27/2016
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    someone from Seattle, WA

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  • I am also wondering which route is best for me toward reverse mortgage. I wonder whether I can refinance my mortgage with a cash out option which will mean a higher monthly mortgage , then I apply for reverse mortgage when I turn 62 which is about five years away . I am 58 now. I want to get cash now and let the reverse mortgage take care of my higher mortgage payment later. I know that I probably will not be able to draw any cash with the reverse mortgage unless my home value keep climbing higher by then. or should I sit tight with my present mortgage with lower mortgage payment until I turn 62 then apply for the reverse mortgage and draw cash there? The reason is that I feel that I better start raising cash now instead of later with reverse mortgage. I have my personal reasons here. One of the reasons is that I live in an earthquake prone area and my earthquake insurance covers only 85% of the replacement costs of my new home if it is damaged .It would be nice to have cash around to expedite things with my home repairs or construction .So this is just one idea on how complicated an individual's financial strategy can be per se. Everyone has different goals and strategies. that fit their needs best.. So I think that your reverse mortgage program and information needs to be more informational as to give us more options like cash out refinancing linking to reverse mortgages.. It is a numbers game , I know.. Interest rates is another factor to take under consideration and with what the Federal Reserve plan to do about rates... as how much higher it may be five years down the road.. So I figure if I do a cash out refinancing at present low rates, I would probably be better off doing it now instead of waiting until I am eligible for my reverse mortgage and the interest rates probably will be several percentage points higher than now.. There is a lot of moving parts so you need to take those under consideration as you develop better information for people who are not old enough to be eligible for reverse mortgages now but can do something now to take advantage of today's low rates to take cash out and later apply for their reverse mortgages later on.

  • Login to rate this answer:   Answered on 4/27/2016
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  • You have valid concerns here with your strategy. While we cannot provide you with advice here, here are some important points to consider.

    There are seasoning requirements with a reverse mortgage, this means you cannot have taken any cash out of your home for at least 12 months prior to your reverse mortgage. Since you are 58 now and have 4 years before you qualify, you could theoretically access the cash you need now without triggering a seasoning issue later. Just be sure not do draw from your HELOC if you have one, within 12 months of applying.

    You will want to keep apprised of any changes to how much you may qualify for a reverse mortgage as you get closer, and the market value of your property as well. You currently have the option to pay down your mortgage balance to qualify, or bring cash to closing.

    Another important thing to consider is the FHA viability of your home type. Many condos do not currently qualify, as well as many mobile/manufactured homes, etc. Before you embark on this plan be sure your property type is adequate.
    The reverse mortgage product has been subject to many changes over the years, and hopefully it will be around when you need it. Taking advantage of low interest rates and your current income situation to do a cash out refinance now, with a plan to utilize a reverse mortgage later may not be a bad strategy. There could be a downside however. If the product changes in the future making it harder to qualify, you could get stuck with a mortgage payment you’re not comfortable with in the long run.

    I hope you find this helpful in your situation.

    If you still need further information about reverse mortgages, please don't hesitate to reach us at 888-411-RETIRE (7384)

  • Login to rate this answer:   Answered on 4/27/2016
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  • Right on, Tricia! There have been so many hugh changes to HUD's Reverse Mortgage program since the mortgage crisis ... I hope it's still there for me, and provides a reasonable solution, in 5 years, when I turn 62.

  • Login to rate this answer:   Answered on 4/28/2016
**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.