| REVERSE MORTGAGE |
Reverse Mortgage
Reverse mortgage information
Reverse Mortgage Myths
Myths about reverse mortgages
Free Analysis
Free reverse mortgage analysis
Reverse Mortgage FAQ
Frequently asked questions
Start a Reverse Mortgage
Getting started is easy
Reverse Mortgage Terms
Glossary of reverse mortgage terms
Reverse Mortgage Calculator
Online reverse mortgage calculator
|
| LIFE SETTLEMENT |
Life Settlement
Life Settlement Information
Life Settlement Benefits
Benefits of Life Settlements
Life Settlement Examples
Examples of recent settlement cases
Life Settlement FAQ
Frequently asked question
Free Life Settlement Quote
Free Life Settlement Quote
How to Qualify?
How to Qualitfy
Agents/Brokers
Offer your clients a life settlement
|
|
Low rates, high values make reverse mortgages attractive
People seeking to buy houses these days are happy, of course, about low mortgage rates. Rising house values, though, offset that to a large degree.
One consumer group, however, will find both conditions to their liking - senior homeowners who are in the market for a reverse mortgage.
The stars are aligned into a nearly perfect position for reverse mortgages, a financial product that has been offered nationally for a dozen years, except for Texas, where it became available less than two years ago.
Housing values are appreciating. The interest rates on reverse mortgage loans, moreover, are at record lows.
Rates on reverse mortgages backed by the Federal Housing Administration are tied to one-year U.S. Treasury bill rates, which have been falling along with other interest rates. More than 90 percent of reverse mortgages are FHA-backed.
The latest reverse mortgage loan rate is 3.31 percent, down from 5.25 percent a year ago.
"The rates have never been this low," said Scott Norman, president of the Texas Association of Reverse Mortgage Lenders.
The nearly two percentage-point difference could mean about $10,000 more on a lump-sum reverse mortgage loan on a $100,000 home, according to Norman - also a representative of California-based Financial Freedom, a leading provider of reverse mortgages.
Reverse mortgages in Texas can be made in either tax-free lump sums or monthly payments. Senior homeowners often use them to supplement their retirement incomes. They can be spent for any purpose.
Although a reverse mortgage loan converts part of the house equity into a lump sum or monthly income, the homeowners continue to hold title to their house until they sell or move away.
If the house value declines after the reverse mortgage loan is made, the fixed monthly payment amounts do not change.
When the loan becomes due, upon sale or moving away, the borrower or his/her estate can never owe more than the current value of the house, even if the value of the home has declined since the loan was made.
Reverse mortgages are growing in popularity in Texas, Norman said. After about 650 loans were funded in 2001, the pace in 2002 should see 900 reverse mortgages completed.
The popularity is not just because of more attractive terms due to house values and interest rates, Norman added.
"Nearly everybody has an aunt or a grandmother or a neighbor who has gotten a reverse mortgage or who is thinking about one," he said. "Bankers, financial planners, accountants and others also know more about them."
Texas' reverse mortgages lack just one option to make them as attractive as they are in the rest of the nation: getting a reverse mortgage line of credit.
That would reduce the amount of interest paid by senior homeowners, because they could borrow only what they need and repay some or all if possible later to maintain more of their equity.
Norman is working hard to add that option in Texas, where lines of credit remain banned by state law for both home equity and reverse mortgage loans.
The ban is due mainly to some irrational fear among state lawmakers that Texans will abuse lines of credit, even though that has not been a problem elsewhere.
Norman is seeking support for a joint resolution that would add lines of credit to reverse mortgages only "because it makes economic sense."
The proposal, to be introduced in the Legislature's 2003 session, also would allow seniors to convert home equity loans to reverse mortgage lines of credit. As things now stand, a Texas homeowner with a home equity loan is banned from having a reverse mortgage, too.
In the rest of the nation, nearly three-quarters of reverse mortgage loans are in the form of lines of credit.
Norman is showing the proposal to real estate, mortgage banking, consumer and senior groups to garner their support. The Texas chapter of the AARP already has given its blessing.
Norman said he believes the proposal stands a good chance to be added to a statewide constitutional amendment referendum in November 2003.
If that happens, it could mean the start of a glorious liberation for Texas homeowners. If reverse mortgages get lines of credit, then regular home equity loans probably will not be far behind.
That would save Texans millions of dollars a year in interest charges, especially those who need to tap their home equity to put their children through college.
Visit now for your Click here for your free reverse mortgage analysis
|
|
|
| Contact Us |
|
RTG Consultants, LLC
202 Lonesome Pine Dr.
Longwood, FL 32779
Phone: 888.9REVERSE
Phone:(888.973.8377)
Local: 407.774.0112
Fax: 206.333.0112
Email: Contact Form
www.rtgconsultants.com
|
 |
|
