Juhani Tontti asked:




The reverse mortgage loan is a long term solution. Many seniors seem to think, that when they postpone the financial decisions, the time will handle the issue. Unfortunately,. The time just worsens the things and the only wise thing is to make the decision now. And, the reverse mortgage loan is just one option.

1. It Is Important To Act Quickly.

The limit is 3 months. If a senior is 3 months, or more, behind with his mortgage payments, it is important to act quickly. The first thing is to contact the lender and to tell him honestly, what is your situation and whether he has some tips, what to do. You can also ask, whether the reverse mortgage loan would be useful in your situation.

Most obviously a senior needs more disposable money to be able to handle all the monthly costs. When he has an old mortgage left, which he has to pay monthly, the reverse mortgage loan can handle two things. A senior can pay away the old mortgage with the reverse loan, which gives him more disposable money. Exactly, what he needs. The reverse loan has no monthly payments.

2. The Importance Of The Good Credit Score.

The credit score is like a good health. When it is okay, you will not even notice it, but when you have lost it, it causes many troubles. The bad credit score makes the borrowing more expensive or even impossible. If a senior meets the foreclosure, his credit score will drop by 250 – 300 points for 10 years. And he will lose the home.

3. How The Reverse Home Mortgage Will Help A Senior?

The best feature of this loan type is, that the lender will pay to the senior. A senior has to have a home, where he has an equity left, which is his permanent home. The age must be 62 or over.

By taking the reverse loan, he transfers a part of the home equity into cash money. This means extra disposable money every month. On the top of this, he can pay away the traditional mortgage with the reverse one, which further adds his disposable monthly cash. The new loan capital, interests and all costs will be paid, when the loan will be closed. This happens, when the borrower will move away, sell the home or die.

4. How The Loan Amount Is Calculated?

There is a maximum limit of $ 625.000. The age of the borrower, the interest rate level and the appraised value of the home are the 3 factors, which influence on the loan amount. The thumb rule is, that the older the borrower is, the higher the appraised home value and the lower the interest rates, the more a senior can borrow.

5. This Is A Must: A Senior Has To Meet The Counselor.

Before a senior can sign the reverse mortgage loan contract he has to meet the counselor, says the law. This is very good, because the counselors are free to guide also concerning other options and they are not salespeople. A senior makes it wise, if he will prepare well for this meeting, because it can be honestly useful.

Leslie

Michael Kraus asked:




For much of the past year, mortgage rates have been at or near record low points. Unfortunately, many homeowners have been unable to take advantage of these rates due to declining home equity. Many homes have lost significant amounts of value since the housing market peaked in 2006. As a result, many homeowners now owe more on their mortgage than their home is worth (this condition is known as being “underwater” or “upside-down” on one’s mortgage). Homeowners who lack equity in their homes are frequently unable to meet the loan-to-value (LTV) ratios required by lenders in order to refinance their mortgages. These borrowers may be missing out on thousands of dollars worth of savings.

In response to this situation, the government created the Home Affordable Refinance Program (HARP). HARP was designed to allow homeowners with little to no home equity to refinance into lower mortgage rates. HARP loans are available to borrowers with LTVs of as much as 125 percent, although the maximum LTV it varies by lender.

Some of the eligibility requirements for HARP are:

• The borrower’s mortgage must be owned by Fannie Mae or Freddie Mac
• The home must be the borrower’s primary residence
• The borrower must be current on their mortgage with no late payments in the last 12 month period
• The new loan must lower the borrower’s monthly payments

For a complete listing of the HARP eligibility requirements, check out the Making Home Affordable Webpage here.

The HARP loan program has been extended through June 11, 2011.

Tracy

dave s asked:


I am planning to buy a new house. What would be better, to take two loans (primary and secondary) on the new home, or to take one loan and home equity from my first home (which was paid in full) to put into the new house?

Norma