Current Mortgage Rates

Tuesday, December 02, 2008



The upside to a reverse mortgage:
  1. Homeowners can pull needed cash from the equity of the home, without incurring monthly expenses.
  2. Lenders cannot force homeowners to sell the property to pay back the loan.
  3. Reverse mortgages guarantee that the homeowner can stay on the property for as long as he or she lives, even if the outstanding loan and interest grow to exceed the value property's value.
The downside to a reverse mortgage: In every story, there is always the other side of the coin. While reverse mortgages have their advantages, they also have a downside.

As you know already, reverse mortgages do not require monthly paybacks. This means that with reverse mortgages, you are actually taking out equity from your home and turning it into cash. This does not bode well for your debt or your home equity for that matter. With a reverse mortgage, everything works in the reverse. You have your home. You convert its value into cash. And then you take out that cash every now and then, thereby increasing your debt and reducing your home equity.

Four important things you should do before getting a Reverse Mortgage:

1. Determine if you really need a Reverse Mortgage or if another type of loan would be better for you. Depending upon your needs and your financial situation, you may be able to meet your goals with another, less costly financial solution than that provided by a Reverse Mortgage.

2. See a HUD approved Reverse Mortgage counselor - free of charge - to help you decide if a Reverse Mortgage is for you, or to help you choose among the different types of Reverse Mortgages.

3. Shop around and compare! Not all Reverse Mortgages are created equal. They vary substantially in how much cash you can get, what they cost and other features.

4. Consider whether a Reverse Mortgage might make you ineligible for any public benefits you now receive or may be eligible to receive in the future. For example, if you currently receive or expect to be eligible for any "need based" benefits such as Medicaid, MediCal, or Supplemental Social SecurityIncome (SSI), Reverse Mortgage payments will have to be structured so that monthly payments will be spent within the month they are received. If not, such payments will be considered "income," and may make you ineligible for public benefits. You should contact your benefits provider to ask about how a Reverse Mortgage may affect your eligibility.



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Current Mortgage Rates*

Loan Type
National Average
30-yr. fixed5.88%
30-yr. fixed jumbo7.62%
15-yr. fixed5.50%
15-yr. fixed jumbo7.50%
7/1 ARM6.25%
5/1 ARM5.88%
3/1 ARM5.88%
1-yr. ARM6.75%
1-yr. LIBOR ARM6.12%
10/1 ARM7.88%
40-yr. fixed7.00%
*Mortgage Rates Updated: 12/01/2008