There Are Actually 3 Types of Reverse Mortgages | Michael Lazar

posted on 21 Aug 2015 18:22 by swankyvagrant8044

If you are considering taking out a reverse mortgage home loan, there are three different types to consider. We'll give you the details so you can better decide which one is right for you.

Home Equity Conversion Mortgage (HECM)

The most popular of the three reverse mortgage types is the Home Equity Conversion Mortgage (HECM). This is considered the most commonly issued loan of this type, according to the HUD. One reason: it often comes with lower rates and lesser fees than those that would be offered by private lenders. In addition, the FHA backs these loans, making them a more lucrative option for the banks that issue them.

Qualifications include:You have to be at least 62 years old.You have equity on your home.Your home must meet certain building requirements.You must have undergone reverse mortgage counseling.There are no income or credit requirements.Since these loans are FHA backed, they do have some conditions that must be met. These include:There are loan limits, and the loan can't exceed 100% of the home's value.A Mortgage Insurance Premium (MIP) is required for all HECM reverse equity loans.Reverse Annuity and Home Equity Conversion Mortgages

The other option that you have is with reverse annuity and home equity conversion mortgages. A reverse annuity mortgage comprises an agreement between the lender and the homeowner, where the homeowner borrows against existing equity in the home. The money borrowed has to be repaid only when the home is refinanced or is sold. While reverse annuity mortgages do have three different classes, the most common is the Home Equity Conversion Mortgages (HECM) because it's backed by the FHA.

Private Company Reverse Mortgage

It is possible to get a non-FHA backed loan of this type, commonly referred to as a private company reverse mortgage. But these types of mortgages are typically based upon income and credit score as well as existing home equity, since they are privately backed, and can often come with higher interest rates and more fees because they are offered by private lenders.

If you are considering a reverse mortgage loan, make sure you take the time to research all of your options. You will likely arrive at the conclusion that an HECM loan is the best suited for your needs, namely due to how lucrative they are in comparison to your other borrowing options.

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LONDON, July 7 UK Mortgages, an

investment fund focused on Britain's residential mortgage

market, said on Tuesday it had raised gross proceeds of 250

million pounds to build a portfolio of loans that offer stable

income streams in volatile financial markets.

The fundraising was executed via a placing and open offer of

ordinary shares at an issue price of 100 pence per share and

attracted demand in excess of 325 million pounds ($505.28

million), the company said.

Headquartered in Guernsey, UK Mortgages is run by TwentyFour

Asset Management and targets a net total return of 7-10 percent

a year.

UK Mortgages Chairman Chris Waldron said the funds were

raised in a "significantly oversubscribed fundraising," adding

that "the demand for the product is testament to the asset

class' potential returns."

"The income potential and historically low correlation to

other asset classes has clearly appealed to investors," said

TwentyFour Chief Executive Mark Holman.

UK Mortgages aims to pay a dividend of 3 pence per ordinary

share for the financial year ending June 30 2016 with a first

interim dividend to be paid in April 2016.

Numis Securities Limited acted as UK Mortgages' broker and

financial adviser and will continue working with the company.

($1 = 0.6432 pounds)

(Reporting By Pamela Barbaglia, editing by Sinead Cruise)

iEmergent Announces 2015-2019 U.S. Mortgage Volume Forecast Update

posted on 08 Aug 2015 23:00 by swankyvagrant8044
DES MOINES, Iowa--()--iEmergent, a Des Moines, Iowa-based forecasting and advisory services

firm for the financial services, mortgage and real estate industries,

issued its most recent 2015 - 2019 U.S. Total Mortgage Volume Forecast

today. The firm projects that 2015 purchase mortgage lending activity

will rise modestly and the refinance range will continue to be weak and

volatile, although the size of the gain remains uncertain as interest

rate increases, global economic uncertainty and credit availability

still threaten to minimize the overall improvement in the housing

market. Highlights of the forecast include:

2014-2015 National Mortgage Opportunity

2014 Total Mortgage Originations

2015 Total Mortgage Originations

2014 Units

2014 Dollars


2015 Units

2015 Dollars


Purchase Originations

Owner-Occupied Purchase





Non Owner-Occupied Purchase





Total Purchase Originations





Refinance Originations (Range)











Total Originations (Range)











Source: iEmergent, 2015

The projected 2015 purchase dollar volume of $782.6 represents a 9.34%

increase from estimated purchase dollar volume for 2014, with the change

in purchase loan units hovering around 7.8%. A 10% increase in refinance

dollars is also expected, resulting in a range of $1.08 trillion to

$1.16 trillion for total expected U.S. mortgage volume in 2015.

Purchase lending will continue to dominate through 2015 and into 2016

with owner-occupied purchases representing 90% and non-owner-occupied

purchases comprising 10% of all purchase volume. The ebb and flow of

refinance activity will continue around low levels similar to those in

2014, as interest rates fluctuate. If the U.S. economy continues to see

improvements in the labor market and small gains in wages and income,

the size of the total available household pool that is willing, ready

and able to buy a home should start to increase demand for the first

time since 2008.

"Even though we are seeing some signs that housing is slowly recovering,

there are still many factors and forces at work that could make for a

very turbulent year. On one hand, home prices are slowly rising,

interest rates still remain low and job growth seems to be steady - all

of which bode well for housing," said Dennis Hedlund, founder of

iEmergent. "Yet, if even one of those factors is removed from the

equation, or credit availability remains tight despite new initiatives

to help first-time homebuyers or those with limited savings, housing

could easily sputter backwards and recovery would stall for a period

once again."

The anticipated growth in purchase lending varies from market to market,

with Florida, New Mexico and Maryland showing increases of more than 14%

in purchase dollar volume, and Montana, Iowa and North Dakota gaining

less than 3% from 2014 to 2015. Among metropolitan areas, three of the

top five markets for purchase dollar growth over the next 5 years are in

Florida: Palm Coast, Naples-Marco Island and Orlando. Housing

affordability, overall household demographics and market-specific

boom-to-bust volatility from 2005-2013 impact how individual markets

will change from 2014 forward.

"Even if the composite U.S. housing market looks like it's starting to

stabilize, there will be vast differences in how individual markets and

communities will behave across the country," said Hedlund. "Some

communities are already on a solid path to recovery while others will

still struggle to find a foothold in 2015."

About iEmergent

Founded in 2000, iEmergent provides mortgage

lending forecasts and analytics to the lending, housing and real estate

industries. The company offers an extensive variety of forecast and

market intelligence products, including Mortgage MarketSmart, a

visualization tool that helps lenders quantify how mortgage markets will

change. For more information about iEmergent, visit