14
Mar
By First Rate Financial Group
Mortgage

A Reverse Mortgage And A Home Equity Conversion: What To Know

A Reverse Mortgage And A Home Equity Conversion: What To Know If you are getting ready to retire, you need to make sure you have income to support yourself during your golden years. One popular option is a reverse mortgage, and you can use it to supplement the benefits you receive through Social Security. On the other hand, you may have also heard about a home equity conversion mortgage. What are the differences between them, and which one is right for you?

A Reverse Mortgage

A reverse mortgage is a popular option because you can tap into the equity you have in your home to receive funds from a specific lender. In some cases, they will provide you with a single lump sum, but in other cases, they may provide you with monthly installments. You are not required to make any monthly mortgage payments, and you simply have to pay the money back when you sell your home. Your name will remain on the title of your home even as you tap into the equity to support your retirement. There are multiple types of reverse mortgages, and a home equity conversion mortgage is one popular option.

A Home Equity Conversion Mortgage

A home equity conversion mortgage is one specific type of reverse mortgage that is insured by the Federal Housing Administration. It provides you and your heirs with certain protection, and it is only available to borrowers who are 62 years of age or older. If you take out this type of reverse mortgage, you must use the funds to pay off any remaining balance you have on the original mortgage. Then, any funds that are left over will be provided to the homeowner. There are a number of factors that will dictate the amount of money you can receive. They include the age of the youngest borrower, the expected interest rate, and the national lending limit insured by the FHA.

Is This Option Right For You?

If you own your home outright, a reverse mortgage could be a great way for you to support yourself during retirement while also protecting any inheritance you passed down to your heirs. Consider reaching out to a professional who can help you decide if this is the right option to meet your needs.

13
Mar
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – March 13, 2023

What's Ahead For Mortgage Rates This Week - March 13, 2023

Last week’s economic reporting included Fed chair Jerome Powell’s testimony to the House of Representatives, data on job growth, and weekly readings on mortgage rates and jobless claims.

Fed: Chairman Powell says no decision on March rate hike

Federal Reserve Chair Jerome Powell said that no decision has been made about raising the Fed’s target interest rate range in March. Mr. Powell said, “We have not made any decision about the March meeting. We’re not going to do that until we see the additional data.” Mr. Powell said that the Fed is not on a “pre-set path. We will be guided by the incoming data and the evolving outlook.” Mr. Powell cited the upcoming jobs report and inflation data as examples of information used in decisions to raise or lower the Fed’s interest rate range. The Fed will announce its decision regarding its target interest rate range in its usual post-meeting statement on March 22.

Mr. Powell also said that the Fed may accelerate its pace of raising interest rates by 0.50 percent in its continued efforts to control inflation.

Freddie Mac reports higher mortgage rates

Average mortgage rates rose last week according to Freddie Mac’s Primary Mortgage Market Survey.  The average rate for 30-year fixed-rate mortgages rose by eight basis points to 6.75 percent; the average rate for 15-year fixed-rate mortgages rose by six basis points to 5.95 percent.

Jobless claims rose to 211,000 claims filed from the prior week’s reading of 190,000 initial claims filed. analysts expected 195,000 first-time claims filed. The national unemployment rate rose to 3.6 percent in February as compared to January’s 3.4 percent unemployment rate.

What’s Ahead

This week’s economic reporting includes readings on U.S. housing markets, inflation, retail sales, and consumer sentiment. Weekly readings on mortgage rates and jobless claims will also be published. 

10
Mar
By First Rate Financial Group
Mortgage

Why Should You Consider Getting An Adjustable Rate Mortgage?

Why Should You Consider Getting An Adjustable Rate Mortgage?If you are planning on buying a house in the near future, you have probably seen that there are multiple options available. You might even be considering an adjustable-rate mortgage, usually shortened to ARM. While many people opt for a fixed-rate mortgage, there are a few reasons to consider an ARM as well. What are some of the top advantages to keep in mind?

A Lower Initial Payment

One of the biggest reasons why many home buyers consider an adjustable-rate mortgage is that you get a lower initial payment. Often, the ARM’s interest rate is lower than the fixed-rate interest rate at the time of signing. This means that you might have more flexibility at the beginning of the amortization schedule, freeing up more cash. You can use that cash to handle renovations and repairs if your house requires them.

You Can Pay Down Your Principle Faster

Because the interest rate is lower at the beginning of the payment cycle, you might be able to use that extra cash to pay down the principle faster. This could allow you to pay off the house earlier, or it might mean that you end up paying less interest over the life of the loan because you can shrink the principle faster.

You Can Always Refinance Later

While many home buyers are concerned that an adjustable-rate mortgage might increase after the fixed period ends, you do not necessarily have to stick with the ARM forever. For example, you might decide that you want to refinance the house down the road to a lower interest rate, creating opportunities to save money. You might even end up selling the house and moving before the fixed period ends, giving you an opportunity to reset your loan.

Consider Getting an Adjustable-Rate Mortgage

These are a few of the top reasons why you might want to consider an adjustable-rate mortgage. Like anything else, ARMs have their benefits and drawbacks, and the right option for one person might not be the right option for you. You should think carefully about your specific situation, consider all of the options available, and select the best choice for your needs. Do not hesitate to reach out to an expert who can help you.