Ask the Reverse Mortgage Specialist.

1-23-09 Possible Loan limit increase

2009-01-25T10:03:00.000-08:00

There has been some talk of the HECM loan limit of $417000 being raised to $625000 as a part of the new stimulus package.

With the elimination of most if not all reverse mortgage jumbo loan programs, This could be a great benefit to senior looking to replace some or all of income normally taken from their hard hit retirement accounts.

Let your representatives in washington know that this rule change could help the American senior homeowner.

FHA Modernization Act

2008-10-02T08:02:00.000-07:00

Good news for those of you that were waiting for the higher HECM loan limits.

FHA Commissioner Brian Montgomery announced that the new HECM nationwide loan limit (maximum claim amount) will be $417,000. The target effective date is November 1, 2008

More news to come when the official start date is set.

Eben

Reverse mortgage legislation

2007-12-06T11:08:00.001-08:00

The FHA Modermazation Act (s.2330) is currently placed on hold.

It is now unlikely that any progress will be made till the spring of 2008.

Eben www.mireverse.com

My Technorati Profile.

2007-12-05T17:01:00.000-08:00

Technorati Profile

HECM 100 vs HECM 150

2007-12-05T16:34:00.001-08:00

There has been some talk lately about the potential benefits of the hecm 150 over the hecm 100 .

The interest charged is 50 basis points higher than the hecm 100. this has the net effect of a lower service set aside and faster creditline growth rates. The benefit of which is more available cash to the borrower and faster credt line growth rates.

Anyone that is looking to hedge a homes future value (see video) or maximize tenure payments or current cash to close. Should look into this program.

If your bank recommends the 150 over the 100 be sure to ask if you are eligible for any lender credit at settlement.

That's all for today.

Eben

HECM Rates hit new low

2007-12-04T14:25:00.001-08:00

HECM 100 rates are at 4.25%

12-4-2007

Long time no blog

2007-12-04T12:08:00.001-08:00

Hello glad to be blogging again.

What is a Reverse Mortgage Service Set-Aside?

2006-08-02T09:38:00.000-07:00

All Reverse Mortgages have a monthly service fee charged to the borrower. The fee varies in cost between $35.00 and $20.00 depending on the Reverse Mortgage being originated.

The Home Equity Conversion Mortgage (HECM) sets a certain amount of money aside at closing to pay for the anticipated future monthly service fee. This is known as the Service Set-Aside.

This is not a cost to the borrower until the fee is charged at a future date. The unused portion of the Service Set-Aside will be returned to the borrower when the loan is repaid.

The Service Set-Aside equals the Present Value of the anticipated future stream of monthly service fees to be earned by the lender.

Example: A borrower is age 62, and and will have a reverse mortgage for 38 years or 456 months,(reverse mortgage calculations always assume the borrower will live to be 100) The interest rate used for the present value calculation is 6.72% the same rate as charged on the reverse mortgage. The service fee is $35.00 dollars monthly.

Using a financial calculator enter 456 as number of payments , .0672 as the i% and 35 as the payment. Then hit the PV key to get your present value. This will equal the Service Set-Aside amount; in this case $5760.00.

Eben Johnson Reverse Mortgage Specialist.
www.mireverse.com

Your Age and Reverse Mortgage Proceeds

2006-07-31T09:53:00.000-07:00

The proceeds of a Reverse Mortgage are positively correlated with the age of the borrower. Borrowers aged 62 (lowest allowed) are eligible to receive a smaller net principal limit than a borrower aged 95.

The younger a borrower is the longer the reverse mortgage lender will have to wait for the loan to be repaid. Since the loan interest is generally paid from the equity in the home at death of the borrower, the amount of equity at the beginning of the reverse mortgage must pay for the projected interest and principal borrowed.

Eben Johnson Reverse Mortgage Specialist
www.mireverse.com

Lake Property Taxes and Reverse Mortgage

2006-07-26T12:15:00.000-07:00

Lake front property taxes are rising faster than many retirees have planned for. A Reverse Mortgage can provide the extra cash to pay for these property taxes.

In many cases the real estates continued appreciation will offset the cost of the reverse mortgage financing.

Eben Johnson http://www.mireverse.com/

2006-07-24T11:53:00.000-07:00

You may use a Reverse Mortgage in your long term financial planning if you are younger than 62 years old.

Lets assume the following

You are 47 years of age.
You want to buy a $100,000.00 house.
You don't want to wait 30 years before your house payments are gone.
You can earn 6.75% on your investments.
A 30 year mortgage at 6.75% has a payment of $648.59 .
A 15 year interest only balloon mortgage at 6.75 % has a payment of $562.50 .

In 15 years your $100,000.00 house appreciating at 5% annually will be worth $207,789.82

At age 62 you take out a Reverse Mortgage to pay off your balloon mortgage and live in it with no payments due till you permanently leave the residence.

If you put the difference in the 30 fixed payment and the interest only payment ($86.09) in an investment yielding 6.75% every month at age 62 you would have accumulated $26,702.07 for retirement.

So their you have it, a Reverse Mortgage strategy to have no house payments in 15 years and $26,702.07 for retirement.

Eben Johnson www.mireverse.com

Cash Account Reverse Mortgage

2006-07-20T08:22:00.000-07:00

If you have looked at a Reverse Mortgage in the past, you need to look again. The new Financial Freedom Cash Account Advantage now allows a greater percentage of your homes equity to be accessed.

Also, if the interest rate changes before you decided to take out a Cash Account Advantage Reverse Mortgage the amount you can borrow will not change. This is in stark contrast to the HECM and HomeKeeper Reverse Mortgages.

Eben Johnson http://www.mireverse.com/

A Reverse Mortgage Can Hedge Your Property's Future Value. Call 1-920-379-1128

2006-07-19T12:49:00.000-07:00

Learn how to use a Reverse Mortgage to hedge your property's future value. The HECM line of credit available balance may grow larger than your propert future value. If this happens you could withdrawn the available balance, with no payments due as long as you live in your home. Your home is the only recourse on the credit line. Example: Your future credit line available balance is $300,000 and your home future value is only $200,000. You could withdraw $300,000 with your home as the only collateral.

See more Reverse Mortgage Video

Use a Reverse Mortgage to Pay for Your Home's Property Taxes Call 1-920-379-1128

2006-07-19T12:48:00.000-07:00

Learn how to use the HECM Reverse Mortgage Credit Line growth to pay for your property taxes. Example: lets assume your credit line has a principal limit of $100,000 and the growth rate on the credit line is 7.27% after one year the credit line available balance would be $107,270. You could then "Harvest " the $7270 to pay for your property taxes and your credit line of $100,000 would still be available for future use.

Property Tax Relief with Reverse Mortgage

2006-07-12T13:36:00.000-07:00

Reverse Mortgages can be used to pay your property taxes. A HECM credit line grows in value each and every year, When the credit line grows you can "Harvest" the growth to pay for your taxes. In this way your credit line original balance can be saved for emergency use.

Example: The credit line for a hypothetical property is $100,000.00 the credit line growth rate on the HECM Monthly Arm is currently 7.27% so one year from now the available funds in the credit line would grow to $107,270.00 .

You could the spend the $7270.00 and your credit line would remain at $100,000.00

That's all for now
Eben Johnson www.mireverse.com

Stop Forclosure, Bankruptcy with Reverse Mtg.

2006-07-10T08:07:00.000-07:00

You can apply for a Reverse Mortgage as long as you are not currently in bankruptcy proceedings or planning to file bankruptcy. A Reverse Mortgage could save you from bankruptcy, please check it out before you file.

If you are facing foreclosure you may be able to stop it with a reverse mortgage refinance

Eben Johnson
http://www.mireverse.com/

Total Annual Loan Cost TALC.

2006-07-06T09:01:00.000-07:00

The longer a Senior borrower plans to stay at home the lower the Total Annual Loan Cost (TALC) of the Reverse Mortgage is .

The upfront cost of the Reverse Mortgage are "spread out" over a longer time period thus lowering the cost in any given year.

Eben Johnson Wisconsin Reverse Mortgage Loan Officer

Trusts and Reverse Mortgages

2006-06-30T06:58:00.000-07:00

Reverse Mortgages and Revocable Trusts: four guidelines

The Trust must be revocable
All assets of the trust must go to the borrower until deceased
The trustee must have the power to encumber the property
The trust must be written in the state where the property is located.

If the these four guideline are meet your Reverse Mortgage should go through underwriting.

Eben Johnson www.mireverse.com

Reverse Mortgage Marketplace

2006-06-29T07:33:00.000-07:00

Seniors eligible for a Reverse Mortgage number around 20,000,000 in America today. By 2016 that number is expected to be 40,000,000. The HECM loan is the most popular choice for reverse mortgage borrowers. If you are eligible or know someone eligible please post your Reverse mortgage questions here.

Eben Johnson
www.mireverse.com

Reverse Mortgage Appraisal

2006-06-28T08:35:00.000-07:00

Appraisals for reverse mortgages must include an estimate for the cost of the home as new.

This is needed to evaluate the borrowers home owner insrance policy coverage.

Eben

www.mireverse.com

FHA Spot Condo Affidavit form 333-3W

2006-06-26T07:41:00.000-07:00

Condos are eligible for FHA spot approval on Reverse Mortgage Loans.
A FHA Spot Condo Affidavit form 333-3W must be filled out by the Home Owners Association.
For the HECM Reverse mortgage no more the 10-20% of the total units can be encumbered by FHA insured mortgages, this includes Reverse Mortgages.

Eben Johnson Wisconsin Reverse Mortgage Loan Officer

Home Repairs an Reverse Mortgage

2006-06-23T07:49:00.000-07:00

Home with repairs to be done after closing the reverse mortgage now have nine months to be completed.

This has been increased from six months. This will allow more time for the senior borrower to arrange for work to be done. (example exterior painting in winter)

That's all for now
Eben Johnson
http://www.mireverse.com/

Advanced Reverse Mortgage Strategy:

2006-06-22T08:31:00.000-07:00

You can lock in guaranteed growth on the HECM Credit line even if your house value falls.

The available credit line can exceed the actual homes value. Which could be borrowed with only the house as the only collateral.

Are you a financial Planner? Please Comment on this post.

Eben Johnson
Reverse Mortgage Loan Officer
www.mireverse.com

New Construction and Reverse Mortgage

2006-06-20T08:20:00.000-07:00

Reverse Mortgage FHA HECM loans are now allowed on Homes Less Than One Year Old!

There are no special procedures to follow and the loans will go right through underwriting like any other loan.

That's all for now
Eben
www.mireverse.com

Public Television special Reverse Mortgages Explained

2006-06-09T06:59:00.000-07:00

Talk to a Wisconsin Reverse Mortgage Loan Officer. FREE DVD
How can a reverse mortgage lower estate taxes?

The full value of a home owned outright is subject to estate tax, but a reverse mortgage against the property reduces its value thus lowering any applicable estate tax.

A reverse mortgage is a lien against the property that must be repaid when the borrower permanently leaves the property. At death, the full value of the property would not be included in estate valuation for tax purposes.

The debt would effectively reduce the property value and lower estate taxation.

Eben

Reverse Mortgage Variations

2006-06-08T07:21:00.000-07:00

Reverse mortgages come in three standard types. The most popular by annual origination volume is the Home equity conversion mortgage AKA HECM. This type gives the senior borrower the highest net principal limit (CASH) in most circumstances.

The Second type of reverse mortgage is the Fannie Mae Homekeeper. It has lower upfront costs than the HECM, but the net principal limit is significantly lower than the HECM.

The third is the Cash Account or what I call the reverse mortgage jumbo loan . If the home is valued at a significantly higher value than your local FHA lending limit, the Cash Account may give the highest net principal limit available at closing. The Cash account is known for its low to no closing costs. :) !

Eben
www.mireverse.com

HECM Benefits: Inflation Hedge

2006-06-07T07:14:00.000-07:00

A reverse mortgage credit line growth can be used as a hedge against inflation. The credit line grows at a rate .5% higher than the current interest charged on the line.

Since the interest on the credit line is a function of T-bill rates which have an implied inflation premium, When the rate of inflation incrses the credit line should grow at an even faster rate.

Simply put when inflation is corroding your spending power the credit line will give you more available cash to supplement your income.

That's all for now.
Eben http://www.mireverse.com/

Streamline Refinance for existing HECM

2006-06-02T08:01:00.000-07:00

If you currently have a reverse mortgage you may be eligible to refinance to a higher net principal limit. This is know as a Streamline reverse mortgage refi. You are not charged again for the upfront MIP charge on the original balance. Only on the differance between the original lending limit and the new lending limit.

That's all for now.
Eben
http://www.wisconsin-reverse-mortgage.com/

2006-06-01T07:06:00.000-07:00

You can still obtain a reverse mortgage even if you have entered into a Life Estate.

The reverse mortgage would be paid back when you permanently left the home.

That's all for now.
Eben
www.mireverse.com

FHA Trmite inspections

2006-05-25T10:49:00.000-07:00

Good news.

Termite inspections are no longer automatically required in order to get your reverse mortgage funded.

They are still required if the FHA appraiser inspects the home and calls for the termite inspection to be performed.

that's all for now.

Eben
http://www.mireverse.com/

Reverse Mortgage Initial Interest Rate

2006-05-25T10:46:00.000-07:00

Reverse mortgage interest rates are changed every Tuesday. This change happens for all reverse mortgage rates nationwide.

that's all for now.

Eben

P.S. Please remember our soldiers this memorial day weekend!

2006-05-25T09:28:00.000-07:00

Hello, Its Me Eben Johnson the author of this blog. Please don't hesitate to ask me any question about reverse mortgages. by clicking the "Blog this!" button.

I also have a free reverse mortgage dvd available on my website http://www.mireverse.com/
Ok, thats it for now.

Eben