Reverse-Mortgage-Truth.com

The longer a senior has owned their home, the more reverse mortgages options they will enjoy. For seniors in Southern California who have owned their home for at least 10 years, having enough home equity is usually not a problem due to the high appreciation in this region. Even though home prices now appear to be headed down, most long-term residents still have a significant amount of home equity. And once the reverse mortgages Southern California are obtained, the homeowners need not worry about further home price depreciation. It will not affect the loan or amount of money available, as the lender (or FHA) assumes the risk of further drops in value. For this reason, the time to apply for a reverse mortgage is now, to avoid any risk of being disqualified due to further home equity declines.

Financial Freedom announced today that they are suspending their Cash Account Advantage program. This jumbo reverse mortgage was one of the first of it's kind in the industry and has helped thousands of seniors who have homes with high values. Like all jumbo reverse mortgages, it's loan amounts are not limited by the county FHA lending limits.

Fortunately, there are still several reverse mortgage lenders offering jumbo reverse mortgages. Contact your lender for a reverse mortgage quote.

The option ARM mortgage has many names, including “pay-option mortgage”, “negative amortization loan”, “pick-a-payment”, or “deferred-interest loan”, to name a few. Similar to the reverse mortgage, it allows a homeowner to pull out a lump sum of equity, while only taking on a relatively small mortgage payment. A few differences are that the homeowner can be of any age, but the money must be taken as a lump sum (no credit lines). Although the interest rate is generally between 6% and 12%, the borrower only makes monthly payments for between 2% and 5% annually of the loan balance. This gets paid monthly (take 2% to 5% and divide by 12). For example, if the payment is 5% and the interest rate is 8% (a common scenario), then the interest that is not being paid is 3%. (8% minus 5%). Similar to a reverse mortgage, the lender allows that 3% of unpaid interest to be repaid at a later date by adding it to the principal balance of the loan. Thus, the loan balance grows over time, even though payments are being made. But there is a limit on how much the loan balance is allowed to grow. Depending upon the lender, once it reaches around 110% to 115% of the original loan balance, a full mortgage payment must be made.

Part 4 will follow in a couple days.

Wow, have interest rates gone up this week! The fixed rate HECM is up 0.3% and the LIBOR-based products are up 0.33%.

Jumbos:
Cash Account Advantage jumbo reverse mortgage: 6.52% (Index is 6 month LIBOR at 3.02% [rounded] plus margin of 3.5%)
Independence Plan 210 jumbo reverse mortgage: 5.12125% (Index is 6 month LIBOR at 3.02125 plus a margin of 2.10%)
Independence Plan 360 jumbo reverse mortgage: 6.62125% (Index is the 6 month LIBOR at 3.02125 plus a margin of 3.6%)

Conforming FHA:
HECM Reverse Mortgage rate: 3.17% (Index is the 1 Year CMT at 1.67% plus a margin of 1.5%)
Fixed rate Reverse Mortgage - HECM: 6.30% to 6.81% (depending on the lender)

Rates are not APR’s and include no closing costs. Click here for a reverse mortgage quote.