Mortgage to ensure that they do not have an excessive amount of income in their bank accounts at the end of the month when eligibility for public benefits is determined. Concerning potential tax consequences, homeowners are informed that since reverse mortgage proceeds are not considered income by the federal government and they are not taxable. However, many homeowners assume that the interest accrued on their reverse mortgage qualifies as a tax deduction as is often the case with a traditional forward mortgage. Counselors work with homeowners to explain that interest is not deductible until the reverse mortgage is repaid. Homeowners with complicated tax scenarios are advised to speak with tax specialists who have the expertise to advise potential Reverse Mortgage recipients on their tax options and tax implications for their heirs and estate.
Strategically thinking...
Fixed Interest Rate vs. Adjustable Interest Rate Reverse Mortgages One of the most important and confusing decisions that potential borrowers must make concerning the acquisition of a Reverse Mortgage is whether to get an adjustable or fixed interest rate loan. Homeowners are advised of the various parts of a HECM interest rate including the index, margin, and mortgage insurance premium. Homeowners are lead through examples to illustrate how these three factors determine the overall interest rate they are charged and how the interest rate affects the amount of loan proceeds they will receive during the course of the loan as well as the amount they will be responsible to repay when the loan comes due. Homeowners are made aware of the payment plan limitations of fixed rate Reverse Mortgages when compared to adjustable rate mortgages. Counselors also review with potential borrowers typical adjustable and fixed rate Reverse Mortgage interest rates at the time of counseling. These rates are referred to later on in the counseling session when reviewing the possible Reverse Mortgage proceeds, amortization tables, and Total Annual Loan Cost percentages.
Strategically thinking companies rely on ReverseVision Freedom of Action ReverseVision is supported by more reverse mortgage lenders than any other software, giving customers maximum freedom of action.
Independence
Reverse Mortgage Costs For many homeowners the major perceived drawback to attaining a Reverse Mortgage is the upfront costs of the loan. By explaining the various costs of HECM Reverse Mortgages homeowners are able to make educated decisions about whether a Reverse Mortgage is a wise financial decision for them. Counselors review the major loan costs consisting of the Servicing Fee Set Aside, Lender Origination Fee, Upfront Reverse Mortgage Insurance Premium, the standard loan closing costs, as well as the interest rate charged
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July/Aug 09
As an independent technology company ReverseVision gives its customers the highest flexibility and independence to grow their business.
ReverseVision Inc.
3310 Pollock Place • Raleigh, NC 27607 www.reversevision.com (919) 834 0070 • info@reversevision.com
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