Q: Gerald, you previously mentioned some of the disadvantages of reverse mortgages, are there any advantages? Hillary, Washington D.C. A: A reverse mortgage is a special type of home equity loan sold to homeowners aged 62 and older. Here are 3 advantages of reverse mortgages: It takes part of the equity in your home and converts it into cash payments The money you get is usually tax-free and generally won’t affect your Social Security or Medicare benefits. The loan doesn’t have to be repaid until you or your spouse sells the home, moves out, or dies. Here are 3 disadvantages of reverse mortgages: When you get a reverse mortgage, you don’t receive the full value of loan Higher-than-average closing costs, […]
continue reading Q: Gerald, my mortgage broker told me that he offers stated income loans now. How will the return of stated income loans affect real estate? Carl, Bronx, NY A: Stated income loans are often cited as one of the main causes of the financial crisis of 2008. In the early and mid 2000s, banks approved home mortgages without verifying income, pay stubs or tax returns. Since the financial crisis, banks have tightened lending restrictions for mortgages. In fact, current regulations put lenders who fail to verify a borrower’s ability to repay a loan at risk of having those mortgages challenged in court. Stated income loans have made a comeback recently nonetheless. The Dodd-Frank Act of 2010 essentially made stated-income home […]
continue readingQ: How much should closing costs be on a mortgage loan? Henry, North Bergen, NJ A: The closing costs associated with a mortgage are usually different for each customer based on the type of mortgage they get, the property location and the amount of the loan. Mortgage loan closing costs may include appraisal fees, title insurance fees, attorney fees, pre-paid interest and documentation fees – to name a few. During the process of getting a mortgage, you are supposed to receive a good faith estimate which itemizes your closing costs in advance of your closing date, so it’s important that you review your good faith estimate to make sure you aren’t being overcharged. Thanks for your question, Henry, good luck. […]
continue readingQ: How long should it take to get a mortgage loan? Veronica, Flushing, NY A: Well that’s a good question, Veronica. Mortgage approval is a multi-step process which includes underwriting, which can take some time. The lender or mortgage broker you choose and the number of applicants they have in their pipeline will impact how long it takes to get a mortgage as well as your individual financial situation. If, for example, your financial condition is very simple and straight-forward (i.e. your employment is stable and have no debt) the process will generally be faster and can take just a few weeks. However, if you’re situation is more complicated (i.e. you’re self-employed, own several other houses, have gone through a […]
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