Most reverse mortgage borrowers pay off any prior debt with an initial lump sum advance from their reverse mortgage.
The amount of money you would receive depends most on the specific mortgage plan or program you select. The experts at Kaye Financial will research every available program with various lenders to ensure the best plan with the best rate for your specific situation. Some reverse mortgages cost a lot more than others, and this reduces the amount of cash you would receive. Within each loan program, the cash amounts you can expect depend on:
Your age – the older you are the more cash you can get, and
The value of your home – the more your home is worth, the more cash you get and
The current interest rate. The average interest rate for the past 15 years on the HECM monthly adjustable is 5.72% and
Closing costs – there are no out of pocket expenses, so your closing costs can be taken right out of your net proceeds.
When the loan is over, you or your heirs must repay all of your cash advances plus interest, which is usually satisfied by the sale of the home. Because a reverse mortgage is a non-recourse loan, you or your heirs are never going to owe more than your home is worth.
Get the FREE DVD that shows how a Michigan Reverse Mortgage works.
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