Letter to America’s Seniors from the National Reverse Mortgage Lenders Assoc.

We often get asked many questions about how a reverse mortgage works and what are the pros and cons. Many questions are asked in a skeptical manner as if to say “what’s the catch?”. Richard Cordray of the National Reverse Mortgage Lenders Association has written a letter to those interested in learning more about reverse mortgages and tells how to get a publication that the NRMLA has written, too.

To America’s Seniors and Their Families:

Last week, the Consumer Financial Protection Bureau released a report highlighting the confusion many consumers have about reverse mortgages.

WASHINGTON, D.C. – July 9, 2012 – (RealEstateRama) — “Because reverse mortgages can help older homeowners ease the strain of retirement, this product can be beneficial if seniors choose it based on a solid understanding of how it works,” CFPB Director Richard Cordray said. He added, however, that many seniors “struggle greatly to understand this complicated product and the tradeoffs involved.”

Through our ongoing public education efforts, the National Reverse Mortgage Lenders Association is aggressively trying to help seniors avoid short-sighted or misinformed choices.  We share the CFPB’s concern that seniors and their adult children need a more in-depth understanding of reverse mortgages.

To address that issue, NRMLA has developed a series of tools to help seniors better understand the facts aboutreverse mortgages before they choose to use this complex financial product.

In order to provide straightforward and easy-to-understand information, NRMLA has worked with key stakeholders over the past year to develop a comprehensive public education effort called Borrow with Confidence.

The members of the National Reverse Mortgage Lenders Association agree that a reverse mortgage is not the right choice for everyone. It is a significant financial and emotional decision about a complex product.  Borrow with Confidence provides the facts so consumers have a clear understanding of the reverse mortgage process.

Consumers may find Borrow with Confidence at www.ReverseMortgage.org or they may request a booklet by calling (866) 264-4466.

It clearly explains the reverse mortgage product, application process, fees, qualification criteria, borrower responsibilities, the potential risks and offers advice for adult children of borrowers. There is also a glossary of terms, answers to frequently asked questions, and the truth about many common misperceptions about reverse mortgages.

Potential borrowers are encouraged to ask their own questions – either via the Website or a toll-free telephone number – about any aspect of reverse mortgages that they find confusing.

Additionally, Borrow with Confidence includes a 19-point pledge to borrowers that clearly explains borrowers’ rights and confirms the high level of integrity they should expect. NRMLA members are bound by a strict code of ethics, which, among other things, clearly forbids “false or misleading or deceptive or unfair communications or advertisements.”

The National Reverse Mortgage Lenders Association wants consumers to have the resources they need to make informed and deliberate decisions about their retirement security.  We want them to borrow with the confidence that they know the facts.  We want them to borrow with confidence because they know what to expect.

Clear and honest information can help seniors and their families make the best decisions for their own situations.  The National Reverse Mortgage Lenders Association will continue to work with the CFPB to achieve that goal.

Sincerely Yours,

Peter H. Bell
President & CEO

About Reverse Mortgages

Reverse Mortgages are available to seniors 62 years old and older with significant home equity. They are designed to enable elderly homeowners to borrow against the equity in their homes without having to make monthly payments as is required with a traditional “forward” mortgage or home equity loan. Under a reverse mortgage, funds are advanced to the borrower and interest accrues, but the outstanding balance is not due until the last borrower leaves the home, sells or passes away. Borrowers may draw down funds as a lump sum at loan origination, establish a line of credit or request fixed monthly payments for as long as they continue to live in the home.  To date, more than 750,000 senior households have utilized an FHA-insured reverse mortgage.

About the National Reverse Mortgage Lenders Association

The National Reverse Mortgage Lenders Association (NRMLA) is a membership organization comprised of more than 300 companies and more than 1,000 people participating in the reverse mortgage industry.  With a membership responsible for more than 90 percent of reverse mortgage transactions in the United States, NRMLA serves as the national voice for the industry.  It serves as an educational resource, policy advocate and public affairs center for lenders and related professionals. NRMLA was established in 1997 to enhance the professionalism of the reverse mortgagebusiness.  All NRMLA member companies commit themselves to our Code of Ethics & Professional Responsibility.

Read full article here.

Top Ten Refinancing Tips

With so many great mortgage refinancing options available at the moment, you should be considering refinancing your mortgage. There are a few things that you can do to help determine if this is a good course of action for your specific situation.

Below is a brief article that outlines some simple things you can check to see if this is right for you and what you can do to secure the best mortgage rate possible.

The Top Ten Refinancing Tips

Richard Barrington

Chances are that over the course of a typical mortgage, a home owner will have an opportunity for refinancing. Possible reasons to refinance a mortgage are compelling. They include:

  • Saving money by lowering the interest rate
  • Making monthly payments more manageable by stretching out the remaining loan term
  • Stabilizing the monthly payment by switching to a fixed-rate mortgage

With so many factors in favor of refinancing, it is a shame that anyone would fail to refinance a mortgage just because the process can seem complex at first.

10 Easy Ways to Streamline Refinancing a Mortgage

As with many things, refinancing can be broken down into a series of smaller steps, each of which is fairly simple on its own. For example, the following are ten tips that can help anyone refinance a mortgage successfully:

  1. Specify the reasons for refinancing. Is the purpose of this refinancing to lower the interest rate, reduce the monthly payment, or lock in a fixed monthly payment? The type and terms of the refinance mortgage needed will depend on which of these–or which combination of these–goals is in play.
  2. Define the refinance mortgage parameters. Based on the above goals, set targets for interest rates and monthly payments. Decide on the mortgage term and whether to apply for a fixed or adjustable-rate mortgage. A refinance mortgage calculator can help define these parameters.
  3. Check your credit rating. In particular, find out whether it has changed since you last applied for a mortgage. A low credit rating will affect the interest rate and the availability of a refinance mortgage.
  4. Determine changes in property value. A drastic drop in property value can make it difficult to refinance a mortgage unless that mortgage is old enough to have been paid down substantially.
  5. Research prepayment penalties on the existing mortgage. Some mortgages have penalties for early repayment, which includes refinancing. This is not necessarily a deal-killer, but it is important to know the amount of any penalty so it can be measured against the potential savings from refinancing. Also, the original lender might waive this fee if they handle the refinancing.
  6. Obtain refinance mortgage quotes from a variety of refinance mortgage lenders.Mortgage rates and lending standards vary from institution to another, so it is well worth researching multiple refinance mortgage lenders.
  7. Ask lenders for full disclosure of points, closing costs, and other fees. This will help with setting up apples-to-apples comparisons between refinance mortgage lenders. For example, the lender offering the lowest interest rate may also be charging the most in points. Try to request quotes with as nearly identical terms as possible for comparison purposes.
  8. Ask lenders how long they will commit to their rate quotes. Lenders can’t offer the same rate indefinitely, but they may commit to locking in a rate for a reasonable period of time to allow for the application process.
  9. Use a mortgage calculator to compare monthly payment savings with closing costs and other upfront fees. Besides comparing refinance mortgage quotes against each other, also compare them against your existing mortgage. It is likely that there will be a trade-off between paying upfront expenses to refinance a mortgage and achieving a savings in subsequent monthly payments. It is important to make sure the savings in monthly payments will, in time, adequately compensate for the upfront costs.
  10. Check for any prepayment penalties in the refinance mortgage. As mentioned in tip #5, prepayment penalties can dampen the benefits of refinancing. Since another refinancing opportunity may arise in the future, it would be helpful to avoid prepayment penalties in the refinance mortgage.

Again, each of the above is a simple step on its own, and taken together they will help clarify the process of refinancing a mortgage. Article source: http://www.guidetolenders.com/refinance_mortgage/articles/top-ten-refinancing-tips.jsp

These points are easy to do and can save you thousands (and sometimes ten of thousands) over the history of your mortgage. If you’d like to learn more about what type of refinance you can qualify for, contact one of our financing specialists for a free counseling session. We can answer any questions and help you decide what’s best for you. SLS Mortgage of Charlottesville (434) 260-7773

Fixed Mortgage Rates Continue To Fall

Mortgage rates continue to fall! This is a olden opportunity to secure a new home loan or refinance an existing mortgage. With record low interest rates, monthly mortgage payments are more affordable than ever.

The article below details the current mortgage rate trend and what these numbers mean for a current or future home owner.

Mortgage rates fell this week — again — as the biggest refinance boom since last decade continues. Freddie Mac reports that the average 30-year fixed rate mortgage rate nationwide fell four basis points to 3.62%, and that the average 15-year fixed rate mortgage rate fell to 2.89%.

Click here to get today’s mortgage rates.

Mortgage Rates On A 3-Year Slide

Freddie Mac’s survey is collected from more than 125 banks around the country with each bank reporting both its “going mortgage rate” as well as any accompanying discount points required to get that rate. The survey showed that banks offering the 3.62% mortgage rate are charging, on average, 0.8 discount points.

Discount points are a one-time closing cost. 1 discount point is equal to one percent of your loan size.

So, using this week’s survey as an example, if you are a borrower in Marin County, California; or Fairfax, Virginia, and you are borrowing up to the local conforming loan limit of $625,500, to account for your 0.7 discount points, you should expect to bring an additional $4,379 to closing, or to have that amount “rolled in” to your mortgaged amount for you.

If your loan size is smaller than $625,500, however, your discount points fee will be smaller. Homeowners borrowing at the Dallas, Texas local loan limit of $417,000, for example, would pay just $2,919.

Not everyone will want to pay discount points, however, and the good news is that you don’t have to. Mortgages without discount points are always available from banks — they’re just not offered at the 3.62% mortgage rate.

Get a mortgage rate quote with and without discount points to compare your costs and options.

Click here to get today’s mortgage rates.

 

15-Year Fixed Rate Mortgage Rate Falls To 2.89%

Freddie Mac’s weekly mortgage rate survey showed the following national numbers :

  • 30-year fixed rate mortgage : 3.62% with 0.8 discount points
  • 15-year fixed rate mortgage : 2.89% with 0.7 discount points
  • 5-year adjustable rate mortgage : 2.79% with 0.6 discount points

Note that the Freddie Mac mortgage rate survey does not differentiate between a purchase money mortgages and refinances. Some lenders offer slightly lower-than-average rates on a purchase transaction, and slightly higher-than-average for “special” refinance types including the HARP refinance program or loans for investors with more than 4 properties financed. Mortgage pricing policies vary from bank-to-bank.

….More at U.S. Mortgage Rates Fall To New Records

You can see from these numbers that there are many benefits to securing a home mortgage or a mortgage refinance with a broker instead of a bank. Brokers can get the lowest rates possible for the borrower. If you’d like to see what you’re able to qualify for, contact one of our mortgage professionals for a free consultation. SLS Mortgage of Charlottesville is here to answer any questions and help you select the best mortgage for your needs. Call us today (434) 260-7773

5 Steps To Qualify For A Mortgage If You’re Self Employed

We often get phone calls from people that are self employed with concerns about qualifying for a home mortgage. These are valid concerns since there are usually stricter guidelines to qualify for the self employed professionals.

The following article is a useful guide to help you determine what you will need to qualify for a home loan or mortgage refinance if you happen to be self employed.

5 Steps To Qualify For A Mortgage If You’re Self-Employed

Forbes

If you are among the thousands of Americans who turned the dark cloud of the recession into the silver lining of becoming self-employed, you may feel you are now in a position to refinance your mortgage or to buy a home. Even with good credit and sufficient assets, though, you’ll find that even the best mortgage lenders will require you to produce your tax returns and possibly a quarterly profit-and-loss statement in order to establish that you have sufficient income to make your mortgage payments.

SEE: 6 Questions To Ask Before You Refinance

Most mortgage applicants today are prepared to go through a few hoops to qualify for a mortgage, but if you’re self-employed you may need more than a quick comparison of the best mortgage rates to find the best mortgage for you. If you’re new to self-employment, you will need to wait until you have two years of tax returns filed before you can be approved for a new mortgage in order to include your self-employment income in your loan application.

Good Credit

All borrowers today need good credit, with a score of 620, 640 or above for a Federal Housing Administration (FHA) loan and a score of 740 or higher to be offered the best mortgage rates for a conventional loan. Some lenders consider self-employment income as a higher risk than regular paychecks, so a higher credit score can offset your potential risk factors and give a lender greater confidence when qualifying you for a loan. Check your credit report to see if you have negative information that can be corrected or improved before you apply. (For more tips, see Self Employed? 5 Steps To Scoring A Mortgage.)

Low Debt-to-Income Ratio

Lenders typically like to see an overall debt-to-income ratio of 41% or less, although borrowers with other compensating factors may still qualify for a mortgage with a ratio as high as 45%. You can use a mortgage calculator to estimate your housing costs along with your other debt. If you can pay off some bills to reduce your debt-to-income ratio that can be another compensating factor in your favor.

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5 Steps To Qualify For A Mortgage If You’re Self-Employed

We often get phone calls from people that are self employed with concerns about qualifying for a home mortgage. These are valid concerns since there are usually stricter guidelines to qualify for the self employed professionals.

The following article is a useful guide to help you determine what you will need to qualify for a home loan or mortgage refinance if you happen to be self employed.

5 Steps To Qualify For A Mortgage If You’re Self-Employed

Forbes

If you are among the thousands of Americans who turned the dark cloud of the recession into the silver lining of becoming self-employed, you may feel you are now in a position to refinance your mortgage or to buy a home. Even with good credit and sufficient assets, though, you’ll find that even the best mortgage lenders will require you to produce your tax returns and possibly a quarterly profit-and-loss statement in order to establish that you have sufficient income to make your mortgage payments.

SEE: 6 Questions To Ask Before You Refinance

Most mortgage applicants today are prepared to go through a few hoops to qualify for a mortgage, but if you’re self-employed you may need more than a quick comparison of the best mortgage rates to find the best mortgage for you. If you’re new to self-employment, you will need to wait until you have two years of tax returns filed before you can be approved for a new mortgage in order to include your self-employment income in your loan application.

Good Credit

All borrowers today need good credit, with a score of 620, 640 or above for a Federal Housing Administration (FHA) loan and a score of 740 or higher to be offered the best mortgage rates for a conventional loan. Some lenders consider self-employment income as a higher risk than regular paychecks, so a higher credit score can offset your potential risk factors and give a lender greater confidence when qualifying you for a loan. Check your credit report to see if you have negative information that can be corrected or improved before you apply. (For more tips, see Self Employed? 5 Steps To Scoring A Mortgage.)

Low Debt-to-Income Ratio

Lenders typically like to see an overall debt-to-income ratio of 41% or less, although borrowers with other compensating factors may still qualify for a mortgage with a ratio as high as 45%. You can use a mortgage calculator to estimate your housing costs along with your other debt. If you can pay off some bills to reduce your debt-to-income ratio that can be another compensating factor in your favor.

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What is a Reverse Mortgage?

A reverse mortgage can be a fantastic option for seniors to supplement their retirement income. We receive many questions about reverse mortgages and how they work.

Below is a great article explaining what a reverse mortgage is, how they work, and who can qualify. Read on…

What is a Reverse Mortgage?

Patch.com

What is a Reverse Mortgage?

Over the last couple of months, I have received a few letters from readers asking if they should get a reverse mortgage (loan) or a standard mortgage, and what type of advice I could give them on these types of loans.

A reverse mortgage is a loan that allows seniors over the age of 62 to get cash out of their primary residence without having monthly payments. The loan becomes due either when the property sells or when the borrower passes away. Instead of making monthly payments, with a reverse mortgage, the borrower receives either a lump sum or gets paid monthly payments. That is why they are called reverse mortgages.

Like many people, seniors have a lot of money tied up in their home. The only way to access the money is for them to get a regular home equity loan. The problem with a home equity loan for a senior is that these loans have monthly payments. For many seniors they either do not want or cannot afford another monthly payment.

For seniors with a fixed income, the option to receive monthly payments can be helpful.

Some seniors want to tap into the equity in their primary residence and are not in need of additional income. They may want to make a home improvement or maybe purchase a second vacation house. The money that can be taken out of the house does not have to be used for anything specific. It can be used for anything that you want to spend your money on.

Another great thing about these reverse mortgages is that you do not need to have good or any credit. All you need to be is over 62 and have equity in your primary residence. The amount of the loan will vary depending on how old you are, how much equity you have in your house, and what the current interest rates are.

Reverse mortgage loans are becoming more and more popular for a few reasons.  First off, with the aging population, people want to tap into their equity without having to sell their homes. Secondly, because interest rates are so low, the amount you can borrow is so much greater. Remember though, home values are down and the lenders will be looking at how much equity there is in the property before they do the loan.

One of the readers was concerned because they thought that after a while the bank could just come in and take the house if they stayed in the house too long.  That is not the case. You still own your house. The house is yours and your loan is not due until you move out of the house or you pass away. Once that happens, if there is additional equity after the loan is paid back, that money would go to you or your heirs. If you stayed in your house so long that you used up all the equity or even more, you or your heirs will not have to pay anything back.

All the cost, like escrow, title or appraisal fees, will apply with a reverse mortgage. Just like conventional loan, there are different options, so be careful and make sure that you talk to a few different lenders when you are considering this.  Because these loans are regulated by the Federal government, you must complete a counseling session in order to get these loans. These sessions do not take a lot of time and the counselors will explain all of the options to you. You will not be able to get a loan until you complete the counseling and receive your certificate of completion.

http://shermanoaks.patch.com/articles/what-is-a-reverse-mortgage

There are many benefits to getting a reverse mortgage. However, each situation is unique. To determine if a reverse mortgage is right for you, contact one of our mortgage counselors for a free consultation. We can assess your current situation and help you to decide what is right for you. Call SLS Mortgage of Charlottesville today: (434) 260-7773

Storms Knock out Power to 2M Across Eastern…

The violent storm that blew through our area on Friday night has caused considerable damage to local residents and property. Many trees were blown down and broken and fell on cars, houses, fences, and across roadways.

We have been slammed with the cleanup work but that’s what we’re her for. Check out this article about the storm damage below…

Storms Knock out Power to 2M Across Eastern…

ABC News

Violent storms swept through the eastern part of the United States Friday night, killing a northern Virginia woman when a tree fell onto her home, damaging subway cars in Washington, D.C., and knocking out power to more than 2 million people in the middle of a heat wave.

The storms that converged on Maryland, Virginia, West Virginia, Washington, D.C., Indiana and Ohio packed winds topping 70 mph in some places, uprooting trees and damaging numerous homes. They came after a day of sweltering heat across the region.

The nation’s capital reached 104 degrees just before 3 p.m., according to the National Weather Service, beating a record of 101 set in 1934.

Fairfax County police spokeswoman Mary Ann Jennings said the woman in the Springfield, Va., area was killed during the height of the storm. Authorities were at the scene of the home but weren’t able to immediately get inside, she said.

Jennings said police also were responding elsewhere to reports of a park police officer injured when his car was hit by a tree and an 18-year-old man struck by a downed power line.

As of 1 a.m. Saturday, Pepco was reporting 406,000 outages in the District of Columbia and Montgomery and Prince George’s counties, Md.

“We have more than half our system down,” said Pepco spokeswoman Myra Oppel. “This is definitely going to be a multi-day outage.”

West Virginia Gov. Earl Ray Tomblin declared a state of emergency after more than 500,000 customers in 27 counties were left without electricity.

Several elderly residents from an Indianapolis apartment home were displaced when a tree fell onto a power line, knocking out electricity to the facility, the fire department said. More than 20 residents were taken by bus to a Red Cross facility to spend the night, and others who depend on oxygen assistance were given other accommodations.

In the Washington, D.C., area, Metrorail trains were returned to their endpoints due to the storms and related damage, officials said.

“It has had a widespread effect on the region,” Metro spokesman Dan Stessel said early Saturday. He said about 17 train stations were operating on backup power due to local power outages, but that he didn’t anticipate service being disrupted on Saturday.

In Ohio, the State Highway Patrol said three tractor trailers blew over on Interstate 75 near Findlay, but no one was injured.

http://abcnews.go.com/US/wireStory/mid-atlantic-storms-knock-power-2m-16684205

This was the first major storm othe summer this year. It can be expected that a few more will tear through the area before summers over. When it happens, contact Fairfax Tree Service to remove the broken trees, trim back branches, and grind tree stumps. We’re just a phone call away (703) 688-3900