Author: Robin OBrien

It can be a tough, though excellent decision, to get a reverse mortgage loan however, it can be tougher in finding one that best suits your needs. Choosing the wrong product, can cost you thousands of dollars - money you could have spent on improving the quality of your life. To help your decision, here are some tips on what’s on offer and what each program offers.

There are three types of program available to seniors. We’ll start by taking a look at the most popular and then look at the more complex programs - sometimes called jumbo reverse mortgage loans.

HECM Reverse Mortgage Loan

This is by far the most popular program and account for over 90% of all loans. Its popularity is mainly because it is insured by the US government using the FHA insurance scheme. HECM stands for Home Equity Conversion Mortgages and is administered by the U.S. Department of Housing and Urban Development (HUD). This program is often called a HUD or FHA reverse mortgage.

Here are its key points:

The maximum amount that can be borrowed is based on the value of the equity in the home, its location, current interest rates and the age of the borrower(s). At present the maximum amount that can be borrowed varies from $200,160 to $362,790.

The property must be a single family dwelling or two-to-four unit. Some other types of dwelling are also eligible such as, townhouses, detached homes, units in condominiums and some manufactured homes.

FHA’s reverse mortgage program collects funds from insurance premiums charged to the homeowners. An upfront insurance premium of 2% is charges based on the maximum amount that can be borrowed, with an annual premium of 0.5% that is paid on a monthly basis for the life of the loan.

There are 5 payment plans to choose from, all of which can be changed whenever the borrower wishes - a small charge is made for doing so. The plans are:

Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence. Term - equal monthly payments for a fixed period of time. Line of Credit - unscheduled payments or in installments, at any time and any amounts until the line of credit is exhausted - this option is not available in Texas. Modified Tenure - combination of line of credit with monthly. Modified Term - combination of line of credit with monthly payments for a fixed period of time.

Home Keeper Reverse Mortgage Loan

This program is administered by Fannie Mae and is similar in many ways to a HECM. However, the key differences are that more property types are eligible, the maximum amount that can be borrowed is higher, singles can borrow more though couples less and a line of credit does not grow, unlike a HECM.

Any broker who sells the Home Keeper program must also offer the HECM program. Both require that the borrower receive information and counseling from an independent third party.

Jumbo Reverse Mortgage Loan

These are proprietary programs set up and run by private companies. The biggest attraction of these schemes is that there is no maximum amount that can be borrowed; the limit is set by the value of the home. Owners of high-value homes who want to unlock as much cash as possible would be best accommodated by a jumbo reverse mortgage. However, the cost of these is higher, so a potential borrower should fully understand the charges involved.

The following are some of the larger programs currently being offered to seniors.

Financial Freedom was the first proprietary Jumbo Reverse Mortgage program and is called the Cash Account Advantage.

Wells Fargo does not have its own program buy is a Financial Freedom licensed broker.

Generation Mortgage offers a product called, Generation Plus.

Bank of America offers The Independence Plan.

Countrywide offers a product called Simple Equity.

BNY Mortgage/Everbank currently has two versions: the Prime Advantage Fixed Rate Reverse Mortgage and the Prime Advantage Adjustable Rate Mortgage.

When dealing with a broker, make sure you aren’t ‘up sold’ a proprietary product when a HECM of Home Keeper reverse mortgage loan would suffice. If in doubt, seek further advice from another broker or your independent financial advisor.

Author: Jen
Locating a Home Mortgage

When it comes time for you to acquire a home mortgage for your first home or for a second home, or perhaps you are just looking to refinance. Whatever the case may be, it is important to shop around for a home mortgage.

When it comes to a home mortgage, mortgage companies are very competitive, they want and compete for your business, so let them.

There are many places these days to track down a home mortgage, the easiest being the internet.

If you are a person with a good salary and excellent credit looking for a standard home mortgage, you shouldn’t have much trouble tracking one down. It would be as easy as walking into your local bank branch and asking the branch manager to set up an appointment with someone in their mortgage department.

On the other hand, if you are a person whose credit is a little bit challenged, tracking down a home mortgage may prove to be a little bit more challenging.

This is where the internet comes into play. There is a wealth of information to be found and people to help you achieve your dream of obtaining a home mortgage.

The people that are capable of helping you if your credit is damaged or challenged are called mortgage brokers.

Mortgage brokers are not actual lenders. Their job is to shop around for a mortgage for you.

Mortgage brokers easily have access to hundreds of wholesale lenders who lend to people with credit issues and unique situations. So, if your situation is unique, or you have credit issues, a broker may be ideal for you.

If your situation is unique, or your credit is challenged, it is still important to shop around for a home mortgage. By shopping around you will be doing yourself a huge favor, and you could possibly save yourself a bundle of money in closing costs and interest fees’.

Allow for up to four brokers or loan officers to assess your situation, than wait for them to come back at you with an offer. The one that offers you the best deal within reason, should be the one you give most of your consideration to. Good luck.