Comments on: Wall Street Journal Covers Upcoming Changes To Reverse Mortgages http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/ Reverse Mortgage News and Information Thu, 24 May 2012 20:46:00 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: William J. Green http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/comment-page-1/#comment-11149 William J. Green Thu, 30 Oct 2008 20:23:58 +0000 http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/#comment-11149 Peter: Thanks, and fair enough. Then why don't they make exceedingly clear that a 30-year fixed-rate $250,000 FHA forward loan at 7% with approximately $25,000 of closing costs will also cost about 10% of the loan amount, and about 152% over the life of the loan. Peter:

Thanks, and fair enough. Then why don’t they make exceedingly clear that a 30-year fixed-rate $250,000 FHA forward loan at 7% with approximately $25,000 of closing costs will also cost about 10% of the loan amount, and about 152% over the life of the loan.

]]> By: Peter Bell http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/comment-page-1/#comment-11148 Peter Bell Thu, 30 Oct 2008 19:17:49 +0000 http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/#comment-11148 To help everyone better understand AARP's assertion about reverse mortgage costs, they are not stating that the upfront costs alone can be 10% of the value of a home. What they have been sayng is that if you add up all of the fees, including the 1.) origination fee and 2.) other closing costs, 3.) upfront 2% mortgage insurance premium, 4.) monthly servicing fees over the life of the loan, plus 5.) the ongoing 1/2% MIP, the total can be as much as 10% of the home's value. To help everyone better understand AARP’s assertion about reverse mortgage costs, they are not stating that the upfront costs alone can be 10% of the value of a home. What they have been sayng is that if you add up all of the fees, including the 1.) origination fee and 2.) other closing costs, 3.) upfront 2% mortgage insurance premium, 4.) monthly servicing fees over the life of the loan, plus 5.) the ongoing 1/2% MIP, the total can be as much as 10% of the home’s value.

]]> By: Eric http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/comment-page-1/#comment-11146 Eric Thu, 30 Oct 2008 18:02:09 +0000 http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/#comment-11146 I am continually amazed by inaccurate information that comes out of the mouths of individuals who profess to be knowable, intelligent, and experts. People that are in high positions who others listen to for advise on financial matters. Where does David Certner get that the cost of a reverse mortgage is 10% of the value of the home? It is not even close! Will someone please sit down with these people and do an actual scenario in front of them and show them the REAL costs. And ask them what other options they are talking about and do the math on those options. I am continually amazed by inaccurate information that comes out of the mouths of individuals who profess to be knowable, intelligent, and experts. People that are in high positions who others listen to for advise on financial matters. Where does David Certner get that the cost of a reverse mortgage is 10% of the value of the home? It is not even close! Will someone please sit down with these people and do an actual scenario in front of them and show them the REAL costs. And ask them what other options they are talking about and do the math on those options.

]]> By: William J. Green http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/comment-page-1/#comment-11144 William J. Green Thu, 30 Oct 2008 17:34:57 +0000 http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/#comment-11144 Lincoln: Perhaps Governor Palin is willing and able . . . I'm sure a moose gun can also bring down a gorilla. Lincoln:

Perhaps Governor Palin is willing and able . . . I’m sure a moose gun can also bring down a gorilla.

]]> By: Lincoln Pinnocle http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/comment-page-1/#comment-11142 Lincoln Pinnocle Thu, 30 Oct 2008 17:15:42 +0000 http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/#comment-11142 800 pound gorilla is too busy pounding their chest. To bad we can't just shot it. 800 pound gorilla is too busy pounding their chest. To bad we can’t just shot it.

]]> By: Lincoln Pinnocle http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/comment-page-1/#comment-11141 Lincoln Pinnocle Thu, 30 Oct 2008 17:15:15 +0000 http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/#comment-11141 800 pound gorilla is too busy pounding their chest. To bad we can't just shoot it. 800 pound gorilla is too busy pounding their chest. To bad we can’t just shoot it.

]]> By: William J. Green http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/comment-page-1/#comment-11139 William J. Green Thu, 30 Oct 2008 17:04:26 +0000 http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/#comment-11139 If AARP was truly looking out for seniors in the area of budgeting and finance, they would more proactively advise seniors to take advantage of the features and benefits of a reverse mortgage BEFORE seniors are desperate and no other source of financing is available to them because of too-high LTV (now the reverse many not be available either), poor credit, low income, late mortgage payments, etc. And, if AARP did its homework, they would link the results of their own survey which states ~78% of seniors WANT to stay in their current home -- preferably until their home-going -- to some internal number crunching and discover that reverse closing costs are normally fully amortized within the first 5 - 8 years of their loan as compared to a NO-CLOSING COST HELOC (how many of them are still available to seniors?) at a somewhat higher interest rate than a reverse, and that every year thereafter, because of the lower interest rate, their principal balance with a reverse will be lower than that of a HELOC IF they just make the same payments on a reverse as they would with a HELOC fully amortized over 30 years; knowing of course they can skip any payments they choose without penalty or repercussion. And what of fixed-rate FHA loans? The FHA fixed interest rate is currently about 3% higher than a monthly-adjusting reverse, and their closing costs are just as high, if not higher (easily 20K or more for many seniors borrowing $250,000) than that of a reverse mortgage's closing costs. AND, fixed monthly payments of principal and interest MUST be made every month. Why doesn't AARP point this out? If AARP was truly looking out for seniors in the area of budgeting and finance, they would more proactively advise seniors to take advantage of the features and benefits of a reverse mortgage BEFORE seniors are desperate and no other source of financing is available to them because of too-high LTV (now the reverse many not be available either), poor credit, low income, late mortgage payments, etc. And, if AARP did its homework, they would link the results of their own survey which states ~78% of seniors WANT to stay in their current home — preferably until their home-going — to some internal number crunching and discover that reverse closing costs are normally fully amortized within the first 5 – 8 years of their loan as compared to a NO-CLOSING COST HELOC (how many of them are still available to seniors?) at a somewhat higher interest rate than a reverse, and that every year thereafter, because of the lower interest rate, their principal balance with a reverse will be lower than that of a HELOC IF they just make the same payments on a reverse as they would with a HELOC fully amortized over 30 years; knowing of course they can skip any payments they choose without penalty or repercussion.

And what of fixed-rate FHA loans? The FHA fixed interest rate is currently about 3% higher than a monthly-adjusting reverse, and their closing costs are just as high, if not higher (easily 20K or more for many seniors borrowing $250,000) than that of a reverse mortgage’s closing costs. AND, fixed monthly payments of principal and interest MUST be made every month.

Why doesn’t AARP point this out?

]]> By: RickM http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/comment-page-1/#comment-11138 RickM Thu, 30 Oct 2008 16:38:38 +0000 http://reversemortgagedaily.com/2008/10/29/wall-street-journal-covers-upcoming-changes-to-reverse-mortgages/#comment-11138 John, thanks for posting this and you nailed it, they really should change thier approach to this. On page 23 of their publication, "Home Made Money", they list the alternatives and moving into a less expensive home is one of them but there's no mention of taking the hit on the more expensive one first. John, thanks for posting this and you nailed it, they really should change thier approach to this. On page 23 of their publication, “Home Made Money”, they list the alternatives and moving into a less expensive home is one of them but there’s no mention of taking the hit on the more expensive one first.

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