Tag Archive | “inversely proportional”

Reverse Loan Rates

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If you as a senior is willing to refinance your home with the reverse home loan than you should know about the two different interest rates on that loan. The only available loan variant at the current time is the HECM reverse home loan. You may already be aware that usually the HECM loans are supported by the Federal Housing Administration. This feature of HECM loan provides great protection to seniors. There are certain facts about reverse mortgage loans, which you should be aware of and some of these facts are given below.

First Reverse Loan Rate

First Reverse Loan Rate

These rates are also referred to as the Current or Initial Rate. The HECM loan requires its senior borrowers to the buy the mortgage coverage. This insurance has its cost that is eventually added to the senior’s account. A senior has to select between a monthly and annually interest rate adjustment period for his/her loan. This adjustment period is non-variable and borrower cannot request to change it later.

Expected Interest Rate

In the reverse mortgage loan, expected rates are used in the event when the maximum amount of the loan that is being borrowed is calculated. The expected rate is inversely proportional to the borrowing amount. In other words, lower expected means that there will be bigger borrowing amount available for the borrower. The expected are equally to the ten years US Treasury Rate that are added by the lenders margin.

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50 Year Mortgages

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These mortgages are the loans that are required to be repaid  by the borrower after a long  period i.e. 50 years. These loan contain lowest monthly payments as compared to other loans. This is due to the fact that these loans are called the long term loans. 50 year mortgages are the cash flow that never ends and it consist repaying for 50 years. Let’s take a look at the details of these 50 years  mortgages. How they work and either they are right for you or not:

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Basic Facts about 50 year Mortgages

Most of the longest mortgages set a fixed rate on repayment and they are designed to pay off within a long time period of 50 years. There are other long term mortgages that are of 15 or 30 years but these 50 years mortgages are relatively longer than there.

 

September 2011
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