Reverse Mortgage Information

Reverse mortgages allow older homeowners to get cash out of their homes without having to make payments. Reverse mortgages are often used by people who would like to stay in their own homes but need some extra money to pay for things like medical bills. They can also use the money to travel, to take a long and well-deserved vacation, or for home repairs and remodeling.

A new pricing option for reverse mortgages has just been announced, making thousands more dollars available to reverse mortgage borrowers at a lower cost, allowing the senior homeowners to get more money fund a even more comfortable retirement.

The new pricing option will remove the servicing fee and origination fee, which means home owners will be able get more money ranging between $3,500 and $10,000.

HECM (Home Equity Conversion Mortgage) is a FHA-insured financial product that allows home-owning seniors 62 or older to borrow against their home equity without having to make regular monthly re-payments of principal and interest. Other options are also available to applicants- the money can be withdrawn as lines of credit and variable rates. For those who choose a fixed-rate HECM, there will not be any monthly servicing fee or origination fee.

Craig Corn, vice president of MetLife Bank who is in charge of the bank’s reverse mortgage line of business, said that the new pricing option will let senior home owners to draw the proceeds of the loan in an up-front lump sum to fund their retirement while unlocking even more of their home equity. The additional proceeds can help them meet their financial needs, pay off existing debts, cover unexpected expenses, or do likewise things.

While savings can vary by individual cases, typically senior borrowers can get more money in their pockets with the introduction of this new rule.

There will still be other closing costs involved, including FHA mortgage insurance premium, costs from third parties, like mortgage taxes, recording fees, appraisals, etc.