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Recent News and Articles on the Keywords: reverse mortgage + reverse mortgages + refinance  Related to the article below (Last Update: 8/4/2008)

`Leveraged Bailout' Won't End Mortgage Madness: John F. Wasik Bloomberg - Originally chartered to insure and buy mortgages, the two companies may see their equity wiped out if they can't reverse their slide. ... Suit blames loan servicer for pending foreclosure Boston Globe, United States - Loan servicing firms accept payments and handle mortgage duties on behalf of lenders or the Wall Street investors who hold the loans. ... Boston Globe Inside Congress's housing repair kit Boston Globe, United States - Jul 31, 2008 Senior citizens will be allowed to tap into larger reverse mortgages. Currently, owners are permitted to receive monthly payments based on between $200000 ... Good News on Reverse Mortgages MainStreet all 7 news articles » ABC News Big housing measure OK'd, but some say it's not enough Seattle Times, United States - Jul 26, 2008 Expand access for families to Federal Housing Administration (FHA) mortgages and for seniors to FHA reverse mortgages. Provide $15 billion in tax benefits, ... CBS Rescue bill to aid homeowners and builders Providence Business News House approves mortgage rescue Columbus Dispatch The Associated Press - Chicago Tribune all 6,037 news articles »  FNM - FRE Pittsburgh Post Gazette Sweeping legislation offers some relief for home, mortgage markets Pittsburgh Post Gazette, PA - Jul 30, 2008 Tax and other breaks cut a wide swath extending to first-time home buyers, military personnel and to senior citizens planning on a reverse mortgage. ... U.S. News & World Report How the New Housing Legislation Affects You U.S. News & World Report, DC - Jul 25, 2008 Seniors: Although it has received little fanfare, a provision in the legislation that increases the limit on certain reverse mortgages stands to benefit ... Tails, Economy Loses Wall Street Journal - "We will need to reverse course -- the exact timing depends on how the economy evolves, but I anticipate the reversal will need to be started sooner rather ... Be aware of the hidden regulations behind reverse mortgages Fort Worth Star Telegram, TX - Jul 20, 2008 Reverse mortgages - a system where senior homeowners can exchange monthly mortgage payments for a lifetime flow of new tax-free income - are becoming more ... Finance Has Become the Business of America Barron's - Aug 1, 2008 When mortgage rates came down, homeowners exercised their option to prepay and refinance into a cheaper loan. The bond market rallies and your monthly nut ... Real estate notebook HeraldNet, WA - Aug 3, 2008 Cox has 25 years in the business, Schneider has more than 20 and Joy has worked in the mortgage business for eight years. A program on reverse mortgages and ...

Refinance or reverse mortgage?

I am checking out whether to refinance or take a reverse mortgage. I will be 79 in January and live on my Social Security income. If I take the reverse mortgage it will cost me over $10,000 in closing costs plus the payoff balance on my existing mortgage, which is about $22,100. Which way do you thing would be best for me?
-- Joyce Juncture

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You might have a problem qualifying to refinance your mortgage based on your income. Beyond having good credit, the lender needs to see an income stream large enough to cover the payments on the loan.

A reverse mortgage gets past that issue because there are no contractual payments on the reverse mortgage. The interest expense on the money borrowed goes against the equity you have in your home. For that reason you also don't get to borrow as much because the lender needs to allocate a portion of your home's equity to estimated interest expense.

In general terms, the loan is called when you move out of the house, sell the house or upon your death. Any remaining equity not required for interest expense or principal repayment is yours -- or your heirs'. A Bankrate feature, "Reverse mortgages are useful, but take care," has more on reverse mortgages.

As you found out, closing costs on a reverse mortgage are very expensive when compared to closing costs on a traditional first mortgage loan. One way to try to hold these costs down is to shop the three main reverse mortgage loan programs and compare costs. If you do this in a concentrated time period of a few weeks it won't negatively impact your credit score because it's obvious that you're doing a little comparison shopping.

You can do some clever things with a home equity line of credit, or HELOC, but face qualifying on the basis of your income for that type of loan, too. An earlier Dr. Don column, "Reverse mortgages," speaks to this approach as an alternative to a reverse mortgage.

From what you've told me, and you didn't tell me how much equity you have in your home, I think a reverse mortgage makes more sense for you than refinancing or a HELOC, but I'll borrow a line from my earlier column and tell you that my best advice is that you don't look at this loan in isolation from your household budget, any other investments and your expected financial needs.