Frequently Asked Questions
How to get preapproved for a mortgage?
- A: Pre-Approval. When you are pre-approved for a mortgage, it means a lender has looked closely at your credit reports, your employment history, and your income ï¾ and has then determined which loan programs you qualify for, the maximum amount you can borrow and the interest rates you will be offered.
How many times salary can be borrowed for a mortgage?
- A: Traditionally, mortgage lenders applied a multiple of your income to decide how much you can borrow. So if you earn ï¾£30,000 per year and the lender will lend four times this, they may be willing to lend ï¾£120,000.
Are reverse mortgages a good idea?
- A: They are marketed as a solution to seniors' money problems or a way to more fully enjoy retirement. But reverse mortgages can be hard to understand, and the fees and interest can use up a substantial portion of a homeowner's equity.
What are the pros of a reverse mortgage?
- A: The Pros of a Reverse Mortgage. A reverse mortgage can be a valuable retirement planning tool that can greatly increase retirees income streams by using their largest assets: their homes. A reverse mortgage allows homeowners to borrow against their home's equity, while still maintaining ownership of the home.
What miscellaneous fees does a senior have to pay for a reverse mortgage?
- A: There are quite a few miscellaneous fees that have to be paid on reverse mortgages for seniors including mortgage insurance premiums (MIP), origination fees, third-party charges, and servicing fees. Each of the rates for the respective fees is drawn based on a lot of factors including the lenders discretion, their practices, and in-house policies.
How can one pay back a reverse mortgage loan?
- A: Unlike a regular loan, reverse mortgage for seniors cannot be paid off on a monthly schedule as the repayment is due in full at the end of the loan term. Usually, at this point, the applicant or their heirs have the option of selling the house and repaying the loan. In case the amount due supersedes the home equity value, then except for HECM monta
What is the average rate of interest on a reverse mortgage?
- A: The average rate of interest on reverse mortgages for seniors depends on a lot of factors including the type of plan that you go with. Essentially, the United States Department of Housing and Urban Development (HUD) publishes statistics each month on all HECM originations and based on this the lenders set their average interest rates. Based on hist
How much can one borrow with a reverse mortgage?
- A: The amount sanction on reverse mortgages for seniors is set by the lender based on a percentage of the home equity. Usually, the qualifying applicants get unto 60% of their home value as the sanctioned amount. However, this amount can vary based on factors such as age, the value of the appraised home, current interest rates in the market, the lende
What is the monthly mortgage payment?
- A: As you develop a budget for your new home, make sure you can afford this monthly mortgage payment and be sure to include insurance and taxes in your monthly payment calculations. And dont forget about short-term financial goals say, saving up for a vacation or buying a new computer and long-term retirement goals to consider. Your monthly mortgage p
How does reverse mortgage work for seniors?
- A: A reverse mortgage is a loan for seniors age 62 and older. HECM reverse mortgage loans are insured by the Federal Housing Administration (FHA) and allow homeowners to convert their home equity into cash with no monthly mortgage payments. A reverse mortgage loan uses a home's equity as collateral.