![]() In most cases, term payments are significantly higher than tenure payments, because the lender does not know how long you'll be in the house, and must therefore be conservative with your loan amount. Matt and Cindy have two monthly payment options - "tenure" payments for life or "term" payments for a specific time period - in their case, the ten years in which they expect to occupy the home. They're 73 and 70 and expect to live in their home 10 more years. Their Social Security income is only about $3,000 a month, and some extra income would really improve their lifestyle. Their home, which they own free and clear, is worth $400,000. Matt and Cindy are house-rich and cash-poor. Now let's look at a situation where the homeowners are house-rich and cash-poor.ĮXAMPLE WHERE THE REVERSE MORTGAGE DECISION IS BASED ON REMAINING TIME IN HOME ** If unused, HECM credit lines grow at the loan's variable interest rate. *Elimore's property may be worth $300,000, but it's subject to a $80,000 loan. Unused, the line of credit will grow over time. She can get a line of credit and use the initial disbursement for her mortgage, repairs and trip, and tap the remaining unused line after 12 months.After 12 months, she can tap the remaining funds if other expenses or travel opportunities come up. She can borrow a lump sum at a variable rate, which pays off her mortgage and covers repairs and her vacation.She can take a lump sum payout at a fixed rate, which zeros her mortgage and leaves her funds for home repairs and travel.Several payment options can accomplish her goals: She lives very simply but would love to take a trip to visit some grandchildren she's never seen.Ī HECM frees Eleanor from mortgage payments, which should stretch her limited income further and improve her quality of life. The property also needs $10,000 of repairs, which she can't afford. Now let's look at an example where the reverse mortgage choice is not so clear.ĮXAMPLE WHERE THE REVERSE MORTGAGE DECISION IS COMPLEXĮleanor, a 75-year-old widow, is under financial pressure, because she still has an $80,000 mortgage on her $300,000 home. **If unused, HECM credit lines grow at the loan's variable interest rate. For example, finding a home at a lower purchase price or coming prepared with a larger down payment can help you lower your monthly payment.*Any property value greater than $625,500 is calculated at the HECM maximum value. If you're looking to keep your mortgage payment below a certain dollar amount, you can change the loan terms. You will also see a breakdown of your estimated monthly payment, including how much will go toward principal and interest. Here you can view your estimated monthly payment and loan payoff date. After you enter your information into the fields on the left, the calculator will automatically populate your payment information at right. Ask your real estate agent or check your local property assessor's website if you don't have this information. This part is optional but can give you a more accurate calculation. Add taxes, insurance and homeowners association fees.Your interest rate will depend on the type of loan you have, such as FHA or conventional, as well as the repayment length, the loan amount, the loan-to-value ratio and your creditworthiness. Research mortgage rates to get a better idea of the current rate environment. Generally, you’ll need at least 20 equity in your home for a refinance. ![]() In other words, it’s what you’ve paid off already for example, if your house is worth 200,000, and you’ve paid off 40,000 of your loan, you have 20 in equity. That said, a shorter repayment term will cost you less in interest charges over the life of the home loan. Home equity is the percentage of your home’s value that you own. A 30-year fixed-rate mortgage is a popular choice among homebuyers because it allows you to split a lower monthly payment over a longer period of time. Also offers loan performance graphs, biweekly savings comparisons and easy to print amortization schedules. Estimate your monthly payments with PMI, taxes, homeowner's insurance, HOA fees, current loan rates & more. Add the down payment you expect to make either as a dollar amount or percentage of the home price. Check out the web's best free mortgage calculator to save money on your home loan today. You can experiment with this number to see how much house you can afford.
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