Kiplinger's recommends: www.goldengateway.com to do the math and I recommend also the AARP site: www.aarp.org/revmort/ for an estimate of benefits based on age.
The older you are, the more the monthly payments you receive but the less time you may have to amortize closing costs over your remaining life.
Upfront costs could be from 4%-6% but over the life of the loan could be as much as 10% so it is wise to run the numbers with a financial planner and consider other solutions that may be less expensive.
Interest rates may be variable and in this environment may end up going up and costing you more and depleting your remaining equity faster than you had thought. A fixed rate would be preferred, especially when interest rates are low.
Federal (FHA) loans provide limitations on variable interest rate changes where a private loan may not have these safeguards:
(1) Rate changes cannot occur more than once per year
(2) Change is only based on the 1-year Treasury bond rate change
(3) Maximum change of 2% in any year and maximum of 5% point change over the lifetime of the loan
The most complete list of HECM lenders, per the AARP report, can be found at:
www.hud.gov/offices/hsg/sfh/hecm/hecmhome.cfm
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.