Mortgage Rates Ticking Up?

Over the last two weeks we have seen mortgage rates tick upward almost .1%. While this may not seem like a big deal; it is if you have a loan with the value of $300,000 or more. Many home owners are trying to time the exact bottom before refinancing but this is not the best idea. If you feel you are talented enough to time the bottom of any financial market, it is likely you would be extremely rich from these abilities. While most of us cannot do this, it is smart to refinance when rates are low and you have the ability to get a rate that is pleasing to you.

Overall, you may save some money if you pick the exact bottom on overall rates, but your risk is enormous if you miss with your prediction. If the government feels that the housing market is on solid footing and we have seen a bottom, it is likely that rates could shoot all the way back up to 6% within a matter of months. While this is not likely to happen anytime soon, no one knows for sure with this market. As soon as the government stops buying up all the mortgage backed securities, it is likely we will see a steady increase in mortgage rates.

With this knowledge, it is advisable to start planning for that refinance now. It very likely that you will have an interesting time with the appraisal step so you might as well do it now and get it over with before the housing market takes any more crazy moves.

Subprime Blogger offers information on mortgage rate trends and how they affect the economy and ultimately your life. Keep up with daily mortgage rates could save you thousands of dollars in the long run.

Advantages and Disadvantages Of A Reverse Mortgage

Betty and John, are in their mid-seventies and are currently weighing the advantages and disadvantages of a reverse mortgage as a way of freeing up some cash. The couple purchased their home 45 years ago for about $14,000 since then home values have skyrocketed and recent single family homes in their neighborhood have been selling for a minimum of $160,000.

Like Betty and John, if you’re considering a reverse mortgage it’s important to do some research prior to making a decision. You not only need to understand the basic principles of this kind of mortgage but you also need to look at all the advantages and disadvantages of a reverse mortgage.

Essentially a reverse mortgage is a loan that permits homeowners 62 years of age and older to borrow against the equity in their homes without having to sell it. Further, you don’t have to give up the title or take on a new monthly mortgage payment.

A reverse mortgage loan is tax-free and needs only to be repaid when the borrower (or in the case of Betty and John, when the surviving spouse) dies or sells the home. At which time, the reverse mortgage loan must be repaid in full, including all interest and other charges.

When examining the advantages and disadvantages of a reverse mortgage it’s also important to consider both the process and the related costs of obtaining a reverse mortgage. Unlike a conventional mortgage, with a reverse mortgage, the homeowner (the potential borrower) must meet with a reverse mortgage counselor. References for counselors can be obtained from banks offering reverse mortgages or the U.S. Department of Housing and Urban Development (HUD).

The purpose of these meetings which may take place in person or on the telephone is for the homeowner to learn about reverse mortgages and discuss alternative options. It also helps you decide which kind of reverse mortgage may be best. As well as exploring the advantages and disadvantages of a reverse mortgage, it’s wise that the potential borrower, also compare costs between various lenders and request a Total Annual Loan Cost estimate for each.

Further to discussing the advantages and disadvantages of a reverse mortgage with a counselor, you also need to understand that there are certain costs involved in the reverse mortgage process. Costs may include application fees, closing costs, insurance, appraisal fees, credit report fees, and quite possibly a monthly service fee. Remember too that since a reverse mortgage allows you to continue living in your home, you’re still responsible for property taxes, insurance and repairs. If these payments are not maintained, the loan could become due in full.

A reverse mortgage may also affect eligibility for federal or state assistance as well as Medicaid. That said, any reverse mortgage money that is received is tax-free and does not affect Social Security or Medicare benefits.

The condition of your home is also a large part of the approval process. It must be structurally sound and in good repair. If it’s determined that home repairs need to be done, the costs can also be financed through the reverse mortgage loan.

The total amount a homeowner can borrow all depends on the kind of reverse mortgage selected, how much equity is in the home, the loan's interest rate and most importantly, the age of the borrower. Typically the older a person is, the more they can expect to receive.

A borrower can receive reverse mortgage payments in one of the following ways: in a lump-sum payment; fixed monthly payments; a line of credit or a combination of any of the above. Most homeowners go for the line of credit option which allows them to draw on the loan whenever money is required.

Paul Jesse is a retired government employee, small business owner and the author of many articles on finance and internet marketing. Visit his website at: http://www.sheamarketing.com/financial.

Reverse Mortgages: All You Need To Know

A lender’s promise of fast cash and no monthly payments make reverse mortgages an attractive alternative for cash-strapped seniors who are house-rich but cash-poor. Offered to homeowners over the age of 62 (in Canada), reverse mortgages allow seniors to convert the equity of their home to finance living expenses, home improvements or other needs. It seems like a good idea, but it could cost a fortune.

While they offer distinctive advantages - such as allowing people to stay in their home, receive a monthly income and maintaining an enjoyable standard of living - reverse mortgages aren’t for everyone and they involve a number of risks that should be taken into consideration. A reverse mortgage is the opposite of a conventional mortgage. Instead of borrowing money from a lender to buy a home, the lender pays you based on your home equity. The home must be your principal place of residence. If the mortgagor (homeowner) dies, sells the home or otherwise changes principal residence the initial loan must be paid back together with accrued interest, usually through the sale of the property. Because the proceeds of a reverse mortgage are classified as a loan rather than income, they are non-taxable.

The mortgage principal amount is anywhere between ten to forty percent of the home appraised value and is in direct function of the borrower’s age, current interest rates and property value.

With eighty percent of the average Canadian seniors’ assets tied up in their home and little or no income, this can be a viable financing tool for some people. The downside of a reverse mortgage, however, is that it can quickly eat up the accumulated equity of the house. Let’s say you take a $50,000 reverse mortgage today at the rate of five percent. You will owe $50,000 seven years from now, double in fourteen years. For seniors who want to leave one-hundred percent of their estate with heirs or who hope to have a certain amount of equity leftover after re-paying the mortgage, this type of financing may not be ideal.

When considering whether or not to take out a reverse mortgage, it is important to understand the risks involved, the types of reverse mortgages available and the different terms offered by lenders. And it never hurts to seek the advice of a third party such as a lawyer prior to entering into an agreement.

Luigi Frascati is a Real Estate Agent based in Vancouver, British Columbia. He holds a Bachelor Degree in Economics and maintains a weblog entitled the Real Estate Chronicle at http://wwwrealestatechronicle.blogspot.com where you can find the full collection of his articles. Luigi is associated with the Sutton Group, the largest real estate organization in Canada, and is based with Sutton-Centre Realty in Burnaby, BC.

Reverse Mortgages - Are There Disadvantages?

If you are looking for a way that you can make your retirement a bit better, you may want to consider checking into the reverse mortgage options that you have. You will find that there are a variety of companies today that will offer you the opportunities to get a senior reverse mortgage, which can really make a difference in your life. However, you'll find that although there are a variety of advantages to doing so, there are also a few disadvantages as well. Although many times you hear all about the advantages, you may not be aware of all the disadvantages to going with a reverse mortgage. So, let's take a look at some of the disadvantages as well as some of the considerations you'll need to keep in mind if you are considering this options for your needs as a senior.

Disadvantages to Be Aware Of:

First of all, there are some disadvantages that you need to be aware of. Here are just a few of those disadvantages that you will need to keep in mind.

- Disadvantage #1 - Building Up Debt - One of the main disadvantages that you'll encounter is that you'll be building up debt over time while you live in your home. Usually with a regular mortgage you work on paying off the debt on your home over 30 years, but when you go with a reverse mortgage, as long as you are living in your home, you are going to find that you are building up debt instead of paying it off.

- Disadvantage #2 - Large Costs Up Front - Not only will you find that building up debt is a disadvantage, but you'll also find that another disadvantage is that there can be some rather large costs you have to pay up front when you go with this option. These costs really go up when you are only wanting to take out part of the money or you only want to live in your home for a couple more years. So, this can be a big disadvantage to be aware of before you make up your mind.

- Disadvantage #3 - Leaving Your Heirs a Smaller Inheritance - Going with Minnesota reverse mortgages also has the disadvantage of leaving your heirs a smaller inheritance as well. Although they are probably not really interested in the money you lave behind, you may be. You'll have less equity in your home if you go with the reverse mortgage, meaning that the home will be worth less, which can affect the heirs that you leave behind.

Considerations You Need to Think About:

Now that you understand that there are a variety of disadvantages to keep in mind, there are other considerations that you'll need to think about before you decide whether or not this is going to be the best senior housing option for you and your needs. Here are a few important considerations that you need to keep in mind.

- Your Current Needs Financially - First of all, you need to consider your current needs financially. Take a close look at your budget and figure out which options are going to best help you to deal with the financial needs that you have. Take a look at the bills you have. Do you have too many expenses and are you barely getting by? Perhaps you need to adjust your budget or you need to find a way to get extra money, such as through a reverse mortgage.

- Can You Adjust Your Budget? - Ask yourself whether or not you can cut down on some of your expenditures to adjust your budget. Of course there are some things that you may need to sacrifice; however, some things you cannot live without. Before you decide to go with a reverse mortgage, it's important to figure out how long the equity that you have will be able to help you support yourself on the budget that you have.

- Will You Move to Avoid a Reverse Mortgage? - Is moving an option for you if it helps you to avoid going with a reverse mortgage? If you want to move and it will keep you from going through this option, it may be the right choice. However, it's not always the best choice. You may want to stay in your home and often you'll find that a reverse mortgage can help you to do so.

- Benefits of a Reverse Home Mortgage - Last of all, you'll want to consider all the benefits that a reverse home mortgage can provide you with. You will have the advantage of having more cash to deal with and you'll be able to pay off some debt and live a better life. However, it's important that you balance out the benefits with the cons of the option as well. Take the time to figure out if the benefits outweigh the problems, and if they do, then this may be the right choice for you.

Where can you get this type of loan? Think about using a mortgage broker. A mortgage broker that is FHA approved will be able to offer you the FHA HECM product as well as conventional products. You will want to evaluate both before you make your choice.

Looking for a reverse mortgage in Minnesota?-check out http://www.MinnesotaReverseMortgage.net John Mazzara is involved with financial services in the Twin Cities, MN. Officing out of Edina, Minnesota-John is centrally located within the 7 county MN metropolitan area. John owns three separate businesses-a licensed real estate broker associate selling Minnesota real estate since 1986-affiliated with RE/MAX Associates Plus http://www.MinneapolisStPaulHomes.com , an independent CFP-certified financial planner since 1989 with an independent Minnesota financial planning firm-Financial Planning Associates and the owner of a Minnesota mortgage broker firm-Venture Development Inc-specializing in residential, commercial and investment mortgages for purchases of single family homes, investment properties and commercial property. Venture brokers FHA, VA, Conventional loans and lines of credit. If you are looking for someone to help you in the areas of real estate sales/purchase, mortgages, or and/or financial planning and insurance you should call John for a free 1 hour consultation to see if he can meet your needs. 952-929-2577. RE/MAX Associates Plus and Venture Development are located at 7300 France Ave S, Suite 410, Edina, MN 55435

Help Deciding If a Home Mortgage Refinance is Right For You

If you happen to be thinking of refinancing your home mortgage there are a few things you will want to take into consideration. Regardless if you follow the "2% rule" or not, there are a lot of good reasons to refinance your home loan. Here are some tips to assist you in deciding if a home mortgage refinance is right for you.

There are plenty of good reasons why a homeowner would choose to refinance their home mortgage. Most choose a refinance in hopes of getting a new, lower interest rate, lower monthly payment, to get a new mortgage lender or bank, or to cash out some of the equity in their home. These are all legitimate reasons which go against the "2% rule" of mortgage refinancing or modification.

The 2% rule of Home Mortgage Refinancing

The 2% rule of home refinance states that you should never refinance your home loan unless you will be able to get a 2% or more lower interest rate than you already have. This "rule" though is nonsense and only applies in certain situations. For example, a homeowner who wishes to get out of their ARM (Adjustable rate mortgage) and into a more stable fixed rate home loan. Generally a fixed rate mortgage comes with slightly higher interest rates than a ARM would, so in this case it would be smart to throw that 2% rule out the window.

It would make the most sense for you, as a homeowner, to evaluate your financial position and refinancing options that may be available, and which is most beneficial, for you. Refinancing a home loan costs money. There are closing costs and other associated fees whenever a new loan, regardless of the type, is taken out. Figure out the "break in" time which is when after the cost of a refinance, you will start seeing true savings from your new home loan.

Practice plenty of patience and do some basic research in order to ensure you are getting the best refinancing deal you can possibly get. The savings that can be had are incredible and can start with your next home loan payment.

Home refinancing can save you thousands or if it is done the wrong way cost you thousands. Greedy mortgage lenders will try to suck you dry if you let them. Learn how to properly refinance a home mortgage and walk away happy and with more money.