- Fixed rate reverse mortgage offers an interest rate that remains the same throughout the life of the loan, but only distributes the funds as a lump sum payment.
- The interest rate of an adjustable rate mortgage changes according to the market interest rates.
- Adjustable rate mortgage can distribute funds as a lump sum, a monthly payment, or as a line of credit.
BILL'S ANSWER
If you are getting a Reverse Mortgage, be sure to check out the articles on the reverse mortgage product and process at http://www.bills.com/reversemortgage
A fixed-rate reverse mortgage offers a stable rate, allowing seniors to better calculate how much they or their heirs will owe when they move out of the home or pass away. Fixed-rate reverse mortgages can have a slightly higher rate to start with than adjustable rate reverses. However, depending on market conditions, the adjustable rate could increase significantly, meaning that the fixed rate may be the better choice in the long run. It is impossible to say which is a wiser financial choice because we cannot accurately predict long-term market conditions. However, the fixed-rate loan does offer more stability and less risk, so you may want to choose a fixed over an adjustable.
One key difference between a fixed rate reverse mortgage and an adjustable rate reverse mortgage is the distribution of funds. With a fixed rate mortgage, you can only receive funds as an upfront lump sum payment. If you need the cash immediately, a fixed rate mortgage may be right for you. However, if you do not need the money now, a fixed rate mortgage will erode your home equity faster than opting for a monthly payment or line of credit option that is available with an adjustable rate reverse mortgage.
As with any financial product, you should read up on reverse mortgages to arm yourself with as much information as possible; a good place to start is Federal Trade Commission’s reverse mortgage page.
Bills.com also offers a wealth of information about a reverse mortgage
You should then discuss the available programs with different lenders to find the best loan for your particular situation. I hope this information helps you Find. Learn. Save.
Since you don't have facebook, please provide us with your location and a valid email address so we can answer it. Without a valid email address,we can't reply. (Go back to login with Facebook)
Due to the high volume of comments received, we cannot publish and/or respond to every comment received. If you have a specific question, we recommend you search our site for an answer before commenting.
* Bills.com will not share, sell, lend, or make public your e-mail address. We reserve the right to delete any questions or comments that violate the Bills.com terms of service.
We get a lot of comments! To help us show our boss that this is a valuable service, so we can keep providing it, we ask you to do 2 things before commmenting:
Log in
Like us
Submit your comment!
Due to the high volume of comments received, we cannot publish and/or respond to every comment received. If you have a specific question, we recommend you search our site for an answer before commenting.
* Bills.com will not share, sell, lend, or make public your e-mail address. We reserve the right to delete any questions or comments that violate the Bills.com terms of service.
Thank you for your comment. Your comment will be posted shortly.
No Comments