Mortgage - Few Facts You Should Know

Reverse mortgage can be a great opportunity for many Americans who are looking for an opportunity to turn their existing home value into monthly income. Reverse mortgages enable seniors age 62 or older to convert a portion of their home equity into tax free cash that can be used for any purpose, such as retirement needs, paying medical bills or achieving other goals.

“The idea of using home equity to finance retirement is becoming increasingly main stream, even among the current generation of seniors who have traditionally been debt averse,” said Peter Bell, President of the National Reverse Mortgage Lenders Association. “The home increasingly plays a role as a retirement asset.”

With Americans age 62-years-old or older holding an estimated $4.3 trillion in home equity, there is plenty of opportunity for seniors to capitalize on this new way of utlizing the value of their home.

According to the National Reverse Mortgage Lenders Association, the reverse mortgage industry has seen tremendous growth in the last five years. However, only a little more than 300,000 reverse mortgages have been originated in its short history. This represents less than one percent of the $4.3 trillion market.

In the first quarter of 2007 alone, there was a $19 billion increase in senior home equity. As the baby boomers approach retirement age, a larger portion of aggregate U.S. home value will be held by seniors.

"The current estimated level of $5 trillion in senior home value could potentially double to exceed $10 trillion in the next ten years,” said Liz Scholz, Managing Director with the Hollister Group in Washington D.C. While reverse mortages have many advantages, you should discuss the details of reverse mortgage with your financial advisor to ensure that a reverse mortgage is the best opportunity for you.

There are times when a reverse mortgage may not be the best choice for you to make. The NRMLA represents the reverse mortgage industry, serving as an educational resource, policy advocate and public affairs center for lenders and related professionals. For more information, visit http://www.nrmLaonLine.org.

By Daniel S. Short
Simply Seniors News staff
http://www.SimplySeniorsNews.com

Lock and Load With the Best Mortgage Refinance Rates

Cashing in on the decline of interest rates can give you the best mortgage refinance deals, but can this happen all the time?

Lock and luck

The interest rates of mortgages saw a decline in four successive weeks in August of 2007. If you were waiting to lock in your interest rate for your mortgage refinance loan, this was the best time to do it. Bear in mind that the market will always be fickle and there is no singular best mortgage refinance interest rate.

If you are home buyer and already purchased a house, you’re just in time to cash in for the lock. You would have gotten savings with the best mortgage refinance interest rate for as much as 5.81%, which is lower by .53% than last year’s average high of 6.34%. The borrowers were in luck to lock their interest rates at that very opportune time and if that fates smile down on you, you just might be next. You could lock in a low interest rate during the first 30-45 day period of your mortgage refinance loan, only to find out there is a much lower rate the next month. Currently, the trend is showing a decline but market analysts are predicting a rise after 12 months.

What good is locking in?

A rate lock guarantees the borrower that his or her mortgage will have a definite interest rate, set points, and other preset fees. If you were unable to purchase your new home during the period, you are going to pay the higher rate when the interest rises. Borrowers are then advised not to lock in immediately after a week of the loan if they haven’t found a property yet. They must know that the 30-45 days provided for allows for additional processing, contingencies, and some settlements, so take your time before you lock in.

Fortunately, there are lenders who automatically extend the lock. But some charge a fee to extend the period and the rate lock costs are not uniform. The fees are either charged up front, or added to the loan rate; the longer the lock period, higher fees will be applied.

To protect your interests, have the locking agreement in writing. A verbal one may not hold water and you cannot present any proof when the time comes. For the lock contract, have all the specifics outlined. The first lock date, the lock period, lock cost and fees, and the post lock details should also be specific in the document. Most documents include interest rate and points at best. Mortgage refinance companies will also allow you to put a lock to your application when the things are looking bleak.

Looking for the best mortgage refinance deals?

The main reason why you are looking for the best mortgage refinance deal is to save money. So look around to see what the lending companies have to offer. Work out the math before signing the loan application because some unscrupulous lenders may spring some nasty surprises despite their advertisements of low interest rates.

Picture this, if your present debts are wiping you out at 20% each year, the best mortgage refinance package will cost you little at 6% if you just know how to maneuver your way through the jargon and the figures. Get a money counselor to walk you through the maze. Who says you need to make a go at it alone?

Want to get the best mortgage refinance quotes online? Visit whataboutloans.com today and find a cache of information about South Florida refinance and refinance mortgage Colorado.

What is an Adjustable Rate Mortgage?

An adjustable rate mortgage (also known as ARM) differs from a fixed rate mortgage in two very important ways, and we will explore those in this article.

Adjustable rate mortgages differ from fixed rate mortgages in that the interest rate as well as the monthly payment will move up and down as market interest rates fluctuate. The rate that triggers all of this movement is usually the Fed Prime Rate.

Most adjustable rate mortgages have an initial fixed-rate period during which the rate does not change; this is followed by a much longer period during which the rate changes at preset intervals.

Home shoppers should understand that, in most cases, adjustable rates start low. In fact, they are often much lower than what is offered through fixed rate programs. This only makes sense because the lenders who offer adjustable rate loans have to have something to entice you into taking the ARM or you would simply go with the fixed rate. This is normal and home shoppers should not be too leery of this tactic, what they should be careful about, however, are the future adjustments to the loan.

For many ARM loans, the initial fixed-rate period can be anywhere from six months long to ten years long. The most common, however, is the one-year ARM, which will have the first adjustment after one year. Another popular ARM is called the 5/1 ARM, which has an initial fixed-rate period of five years, and then the interest rate is adjusted yearly after that. Mortgages that combine a lengthy fixed period with an lengthier adjustable period are known as hybrids. Other hybrid ARM's are the 3/1, the 7/1, and the 10/1.

Home shoppers must understand that once the fixed-rate time period is over (no matter how long or short it may be) the interest rate on the loan will change. This means that the monthly payments will change as well. In some cases, and depending on the type of loan, the change in monthly payment can be very substantial.

Home loan borrowers do have some protection from extreme changes. Adjustable rate mortgages do come with caps. These caps limit the amount by which ARM rates and payments can adjust. This may not be true if you are in sub-prime loan position. Sub-prime lenders can add many different types of fees and can vary their interest rates more than traditional loans are allowed.

There are various types of ARM's available to consumers. Some ARM's allow for a conversion that lets consumers switch from the ARM to a fixed rate for a fee. There are others types of ARM loans that allow borrowers to make interest-only payments for a certain length of time. This helps to keep the first payments low.

Because there are so many types of ARM's you should spend some time looking into them in order to find the one that best fits your needs. You can also speak with knowledgeable real estate agents and lenders to get answers to those questions you may have about adjustable rate mortgages.

Peter Kenny is a writer for The Thrifty Scot, please visit us at Secured Personal Loan and Cheap Mortgages Visit http://www.thriftyscot.co.uk