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MBA Urges Regulators To Avoid Invoking Suitability Standards
The Mortgage Bankers Association (MBA) recently made a preemptive strike against what it obviously perceives as the next threat against the mortgage industry - "suitability standards." Read more...

 

Facts About Reverse Mortgage Interest Rates

When it comes to reverse mortgages, they tend to be more costly than traditional loans due to the fact that they are rising-debt loans, and when thinking of getting a reverse mortgage you have to try to get a good deal.

With a reverse mortgage loan, the reverse mortgage interest rates are added to the principal loan balance each month. So the total amount of interest gathered by the reverse mortgage interest rates will increase significantly with time as the interest compounds. You also need to keep in mind that reverse mortgages use up all or some of the equity in a home, which leaves fewer assets for the homeowners and their heirs. You also need to keep in mind that lenders charge origination fees and closing costs as well, some of them also charge servicing fees.

Another important aspect to consider is that reverse mortgage interest rates are not deductible on income tax returns until the loan is paid off in part or whole. And of course since the homeowner retains title for his or her home, they are the ones responsible for taxes, insurance, fuel, maintenance and other housing expenses.

If you do decide to get a reverse mortgage, then you need to get a good deal on it, and the only way you can do this is by shopping around and comparing terms. When you're shopping around for a reverse mortgage you need to pay attention to the APR, or annual percentage rate, which represent the yearly cost of credit; also you have to pay attention to the reverse mortgage interest rates that are offered.

Some reverse mortgage plans will provide for fixed reverse mortgage interest rates, other will involve adjustable rates that will change over the loan term based on market conditions, number of points and other closing costs.

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