What is a reverse mortgage and how does it work?
A reverse mortgage is a type of mortgage that can be used to either purchase a home or be refinanced into. One of the main features of a reverse mortgage is the fact that there are no principal/interest payments due on the mortgage. One of the requirements for the loan is you must be 62 years of age in most cases. Many clients take advantage of a reverse mortgage to enhance their retirement
What’s the difference between a fixed rate and an adjustable rate?
Mortgage rates can be either Fixed or Adjustable. With a fixed rate mortgage-the interest rate will be the same from the first payment to the last. Adjustable-rate mortgages will change depending on the terms. ARMs as they are commonly known, have a fixed period and then a period where they will adjust to the market and then either be fixed again for a period or continue to adjust. As an example, a 7/1 ARM will start off with a rate that is fixed for the first 7 years of the loan. After the first 84 months, the loan will convert to a yearly adjustable, which means, each year the rate will adjust based on the market and what terms are in the note you signed. It is very important to discuss all the terms of your loan with your loan officer so that there are no surprises.