George and Barbara Dawson purchased their home “subject to” a [tag]first mortgage[/tag] with Great Western Bank, a predecessor of Washington Mutual Bank (WaMu), one of the nation’s largest home loan lenders. The loan fell into [tag]default for nonpayment[/tag]. WaMu held its foreclosure sale on Feb. 8 by submitting a “credit bid” for the mortgage balance. No bidders showed up so WaMu took title to the home.

But, unknown to WaMu, borrower George Dawson filed Chapter 7 bankruptcy on Feb. 6. WaMu was therefore in violation of the [tag]bankruptcy[/tag] “automatic stay” prohibiting further foreclosure proceedings.

On Feb. 20, WaMu served a “Notice to Quit” on the Dawsons, claiming ownership of the house. On March 1, WaMu was notified that George Dawson had filed Chapter 7 bankruptcy on Feb. 6. On March 14, WaMu dismissed its unlawful-detainer eviction proceedings against the Dawsons.

However, WaMu did not rescind the foreclosure sale until Aug. 8. On June 2, the Dawsons brought a lawsuit against WaMu seeking damages for willful violation of the bankruptcy automatic stay by holding the foreclosure sale. (more…)

As the number of foreclosures rises, homeowners unable to make their [tag]mortgage payments[/tag] are facing another growing threat: “[tag]foreclosure rescue[/tag]” scams. State and federal authorities say they are investigating an increasing number of homeowner complaints about fraud and deception by companies that engage in lending to financially distressed borrowers seeking to avoid foreclosure. Several states have recently passed or are contemplating new laws to provide more protection against dishonest businesses trying to take advantage of already vulnerable homeowners.

The problem centers on foreclosure-rescue companies, which target homeowners behind on their mortgage payments through newspaper ads or fliers claiming services such as “fast cash,” “equity funding” and “no credit check.” According to some recent cases filed by consumers and regulators, the companies mislead borrowers into believing they can save their homes from foreclosure in exchange for a transfer of the title for a year or two. The companies promise borrowers they can stay in their homes by paying rent for that period, giving them time to catch up financially until they can buy back their property. (more…)

You already know the current home “[tag]buyer’s market[/tag]” (with more homes listed for sale than there are active buyers searching for residences) in most cities is a great time to purchase a home. There is little competition from other buyers. Motivated sellers are setting realistic asking prices. In other words, it’s a more normal home sale market as compared to the record-breaking volume of the last few years.

Especially if you are a “cash challenged” or “credit challenged” home buyer, you will love this finance source. Not every resale home can be financed using this source, but all you need is one. This under-used [tag]home mortgage finance[/tag] source is the home seller. With more than 50 percent of U.S. homes owned free and clear with no mortgage, those homes are the best candidates for [tag]seller financing[/tag]. Smart home purchasers ask their buyer’s agents to search the local MLS (multiple listing service) listings for homes listed with no existing mortgage. Those sellers are the best prospects for seller carryback mortgage financing. (more…)

America’s housing market has started to slow down a bit, but southeastern North Carolina is still going strong. CNNMoney.com recently named [tag]Wilmington NC[/tag] as one of the [tag]top 10 cities to buy a home[/tag]. It ranked seventh nationally for potential real estate appreciation over the next five years.

Over the past five years home sales had hit record highs as low mortgage rates lured buyers. But the housing sector has lost steam this year as would-be buyers have grown more cautious amid high energy prices and [tag]rising interest rates[/tag]. When asked what happens when mortgage rates and interest rates go up mortgage broker Karen Davis said, “Typically the market slows down somewhat. It takes a little longer to sell a house than it was 12 months ago.” One place realtors and [tag]mortgage brokers[/tag] are not seeing a slowdown is in second-home sales. People are still buying vacation homes here. But unlike a year ago when many were buying purely as an investment, second home buyers now plan on living in their vacation home. (more…)

Conflicting data this week showed that the housing market, like a bull in the ring, is wounded yet still powerful. It takes an experienced toreador to discern whether the beast will succumb to the knife or come charging back. The course it takes may hinge on which matters more to buyers: falling interest rates [a big positive] or fear of falling prices [a big negative].

For now, at least, housing construction is clearly in a localized recession. The freshest evidence came on Nov. 17 from the Census Bureau, which announced that starts on construction of single-family homes plunged 14.6% in October, to the lowest level since July, 2000. On top of that, permits fell 6.3%, to the lowest level since December, 1997, indicating that construction could dip even further in the months ahead [see BusinessWeek.com, 11/17/06, "An Awful October for Housing Starts"]. (more…)

Everyone is entitled to one free credit report each year from each of the three major credit reporting agencies, which are: [tag]Equifax[/tag] Information Services, P.O. Box 740241, Atlanta, Ga. 30374, 800-685-1111, www.equifax.com. [tag]Experian[/tag], P.O. Box 2104, Allen, Texas 75013, 888-397-3642, www.experian.com. [tag]TransUnion[/tag] Corp., P.O. Box 390, Springfield, Pa. 19064, 800-916-8800, www.transunion.com.

A [tag]credit report[/tag] is a sort of fiscal fitness statement of your credit habits. It names your credit accounts, identifies them by type and tracks balances, credit limits, payments, available credit, open-or-closed status and other information that reveals how well or how poorly you pay each account. The report also documents credit requests and notices of liens, judgments and other “derogatory” remarks, remarks from the consumer, and other information. (more…)

I am convinced that the housing bubble is gigantic and will burst before long with massive implications here and abroad. In fact, it’s the key to the global economic outlook. Setting the Scene House prices in recent years have leaped well beyond their normal relationships to the CPI.

We’re referring here to interest-only [tag]Adjustable Rate Mortgages[/tag] as well as option ARMs that allow borrowers to make even lower monthly payments that result in a rising mortgage principle, or “negative amortization.” Then there are unrealistically high property appraisals to justify oversized loans and the lack of full documentation that allows borrowers to overstate their ability to make mortgage payments. Lenders also accommodate financially-weak borrowers with high loan-to-value ratio and piggyback loans, which in effect finance more than 100% of the houses’ prices. (more…)

A law requiring servicers to provide [tag]monthly mortgage statements[/tag] that update the account and explain all changes in it will not eliminate servicing abuses, but it will help alert borrowers protect themselves. It won’t help borrowers who sleep at the switch; they need other legal protections, which will be the subject of another column. Here are a few things that can happen to borrowers, which, in the absence of monthly statements, they might not find out about in time to prevent irreparable financial damage:

Monthly statements must include everything the borrower needs to know. This includes notice that taxes and insurance premiums were paid, and when. If a borrower does not make the full escrow payment and the lender raids his mortgage payment, this should appear on the statement. If the borrower is charged for a late payment, the statement should show when the payment was credited (the borrower knows when it was paid). If the lender purchases insurance for a borrower who already has insurance, the premium should appear on the statement, as should any other fees billed to the borrower. If the borrower makes an extra principal payment sometime during the month, the statement should disclose when exactly it was credited to his balance. If the borrower’s account goes to collections, all the related fees should appear on the statement. (more…)

As reported by TMF (The Motley Fool) Selena MaranJian….

* Among senior citizens, 41% have heard of [tag]reverse mortgage[/tag]s, and 4% have considered signing up for one. That 4% might not seem like much, but it’s one out of every 25 seniors.

* Of those who said they’ve heard of reverse mortgages, 44% said they don’t know enough about to have an opinion on them. Of those with an opinion, 54% viewed reverse mortgages favorably, 20% unfavorably.

With a reverse mortgage, you’re essentially taking out a big loan and using your home as collateral. You can take the money as monthly payments, a lump sum, a line of credit, or a combination of these. When you die or sell the home, the loan comes due, and the home is often sold to pay back the loan. The main benefit is that you get some income during your retirement years. The main drawback is that you end up with little or no house to pass on to your heirs.

(more…)

As in politics, [tag]real estate markets[/tag] suffer or excel based on perception. Today, [tag]residential home buyers[/tag] think home prices are falling off a cliff. Because of that perception, no buyer is eager to buy today, feeling that tomorrow, the price may be cheaper. The impact on the residential real-estate market has been increased inventory, reduced median sales prices and a slowdown of titanic proportions for home builders.

[tag]Commercial mortgage rates[/tag] remained low and now range from 5.70 percent to 5.75 percent for five- and 10-year mortgages, according to the John B. Levy & Co. Mortgage Survey. Pricing and deal terms continue to favor borrowers with ever more aggressive terms and softening underwriting. Some lenders are now underwriting select properties to a debt-service coverage ratio that is based on interest-only payments versus payments that include amortization. (more…)

Until recently, [tag]FICO score[/tag]s didn’t even appear on most rental credit reports. Instead, a list of the applicant’s credit activity was provided, which wasn’t easy for some landlords to read and evaluate. Now that FICO scores are reported to landlords, renters may be concerned they are being evaluated based on a single number.

Why does a FICO score matter? The score, calculated using a complex statistical model, is the grown-up version of a report card. The higher the grade, the better your credit risk looks to lenders. To have a low FICO score could indicate failure to make the grade as a credit risk. Among the reasons a person might have no score, said Fair Isaac spokesman Craig Watts, is that the person recently immigrated to this country and hasn’t yet established accounts with U.S. lenders. (more…)

In the next couple of years, a combination of rising [tag]mortgage interest rates[/tag] and falling home values could sink thousands of [tag]homeowners[/tag]. Being over your head means owing more than the house is worth. It’s an especially risky situation for people with interest-only mortgages and pay-option [tag]adjustable-rate mortgage[/tag]s because they don’t build equity unless they choose to. Some might be able to refinance or get through hard times by living frugally. Others will have to sell their houses, possibly at a loss. Still others will lose their houses to foreclosure.

If you have an interest-only or pay-option ARM, assess your situation and, if you conclude that you are in jeopardy, act quickly. “I don’t think burying your head in the sand is a viable option,” says Neil Garfinkel, an attorney with Abrams Garfinkel Margolis Bergson in New York City. Two groups of borrowers should look ahead. The first group consists of homeowners who are making the minimum payments on interest-only mortgages. Not all of these folks are at risk. The ones who should especially watch out are those who bought homes in the past year or two in markets where house values are falling, and who made no down payment or a minuscule one. (more…)

Picture this scenario: You’ve lived in this country for the past 15 years, earned a decent wage, raised a family, always paid your rent, utilities, cell phone bills and other expenses on time, month after month. But you made little or no use of the conventional banking and credit systems — avoiding bank loans, credit cards and debts in general. Now you go to apply for a [tag]mortgage[/tag] to buy your first home and get smacked with this sobering news: Sorry, but there is not enough information in your [tag]national credit bureau[/tag] files to score your credit. We’ve got to either charge you an [tag]interest rate[/tag] well above prevailing rates — 9 percent or 10 percent in a 6 1/2 percent market — or simply reject you altogether.

Growing numbers of lenders and mortgage brokers have begun offering alternatives to traditional credit scores. At the convention of the National Association of Hispanic Real Estate Professionals this month, a new guide was released listing hundreds of brokers and lenders who use the Anthem system of non-traditional credit reports and scores as supplements to FICOs. Anthem, developed by First American CREDCO, the credit data subsidiary of Santa Ana-based First American, evaluates whatever information on an applicant may exist in the files of the national bureaus — Equifax, Experian and TransUnion. Then it mixes in information collected by CREDCO from other sources. These include regular child-care payments, telephone, electricity and other utilities payments, current and former rent payments, plus personal credit data from businesses that do not report to the bureaus — small local retailers that extend credit, payday lenders, rent-to-own companies and the like. (more…)

Federally insured [tag]reverse mortgages[/tag] are gaining in popularity, and experts think they’re poised to become an even bigger part of the lending industry in coming years. The reason: More seniors are finding that traditional retirement tools, including IRAs, pensions and 401(k)s, are not providing enough income to help fund their living and health-care expenses, says Peter Bell, president of National Reverse Mortgage Lenders Association.

A reverse mortgage is just what it sounds like — instead of a homeowner making payments to the bank to pay off a mortgage, the bank pays the homeowner who has a significant amount of equity built up. The lender, in return, puts a lien on the property. Borrowers receive money from a reverse mortgage in four ways: They can get a lump-sum payment, get a monthly cash stream, establish a line of credit or sign up for some combination of the three. To qualify for these loans, borrowers must be at least 62 years old. (more…)

For the past several months, interest rates for [tag]home mortgages[/tag] have steadily risen. This factor has caused a ripple effect on the housing market. 1. People who once were able to afford to purchase a home are pushed out of the equation because they simply cannot afford [tag]mortgage payment[/tag]s at the current rate. 2. Those who got in on the housing boom with a [tag]variable rate mortgage[/tag] when interest rates were low are now seeing their mortgage payments climb with every increase. They could now be facing [tag]foreclosure[/tag] due to an inability to pay

Foreclosures are a viable option for those looking to save a bit of money on a home purchase. However, they’re not for the weak of heart. Typically, purchasing a foreclosure property requires a good deal of perseverance, research and legwork. First, you must determine how you want to proceed with a foreclosure. Pre-foreclosure properties are homes where the owners have fallen behind on payments. The litigation process may have begun (dependent upon the legalities of each state) and the homeowner typically has been notified that they are in default of their loan. Pre-foreclosure properties may earn you the greatest purchase discount if you contact the current owner and negotiate a price, since many homeowners do not want a foreclosure on their credit history. However, this option is not without risk. (more…)

[tag]Credit counselors[/tag] are finding that [tag]mortgage debt[/tag] is playing a bigger role in the deteriorating financial health of consumers contemplating bankruptcy. In a survey released last month by the [tag]National Foundation for Credit Counseling[/tag], a nonprofit group representing 115 counseling organizations, the average person receiving financial advice before filing for [tag]bankruptcy[/tag] in the last year earned $27,000 annually and had $38,500 of unsecured debt spread over eight credit cards.

Counselors, who can be found through the Web site DebtAdvice.org, had reported a brisk increase in the number of clients who are concerned about the rising costs of their adjustable-rate mortgages in particular, she said. These mortgages, also called ARMs, feature an initial interest rate typically locked in for three to five years, after which the rate changes in accordance with prevailing short-term interest rates. Those rates have climbed in recent years, leaving borrowers with [tag]ARM loans[/tag] vulnerable to sharply higher monthly mortgage payments. “Mortgage debt is coming out as much more significant than we expected,” Keating said. “Pull this all together with the other unsecured debt people have, and this is really problematic.” The foundation, she added, will intensify its attention to mortgage counseling over the next year, partly in anticipation of more demand from consumers whose home loans are growing more burdensome. (more…)

The elections are over, and the outcome had no detectable impact on the financial markets. Far more important than the switch in congressional control is President Bush’s transfer of national security policy from Neo-Con hands to Daddy’s bailout team — grounds for optimism for the world ahead. However, we’re not interested in the world, we’re interested in money; not the House but housing, and the bond market much prefers pessimism to optimism.

A recession from some other cause (a consumer or employment collapse, a Fed forced to overtighten into inflation) would certainly make housing worse, but not the other way around. With one exception: a [tag]mortgage-credit[/tag] spiral. Housing markets are the slowest-roller of all. The last buyers in the party get burned by a routine and minor retreat in price in the year after the peak, but then prices just go flat, sometimes for decades. The bubble zones appear to be entering that flat phase now. The effect on GDP is thus far minor, mostly caused by the decline in mortgage equity withdrawal, sawing about 1 percent off of GDP — a reduction in stimulus, not a braking force. (more…)

Private-property advocates placed measures on Tuesday’s ballot in 11 states that would restrict “[tag]eminent domain[/tag],” the government’s right to take private property. Residents of at least eight states have voted to prohibit what happened to Susette Kelo from happening in their home towns. Voters on Tuesday responded by voting in favor of the restrictive measures in eight of those initiatives – call it [tag]Kelo’s revenge[/tag].

Arizona, Florida, Georgia, Michigan, Nevada, North Dakota, Oregon and South Carolina all passed initiatives to restrict the use of eminent domain, in most cases overwhelmingly. In Florida, 69 percent voted yes on an amendment that prohibits using eminent domain to force the transfer of property from one private individual or entity to another. In Georgia, 83 percent voted to approve an amendment to the state constitution that says eminent domain can be used only for public use. A school or park might be okay; the government taking land to give to a mall developer would not be. The most one-sided vote in favor took place in South Carolina, where 86 percent voted yes to an amendment restricting eminent domain for public use only. A ninth state, New Hampshire, was expected to approve a similar initiative, but results would not be made available until late Wednesday, Nov. 8. (more…)

Have you ever checked out the satellite photos and market value estimates of homes in your neighborhood on [tag]Zillow.com[/tag] — the Internet real estate site that offers “free, instant valuations and data for 67 million-plus homes”? Zillow was launched with major media fanfare in February, backed with a reported $57 million in venture capital. It is one of the most popular real estate sites on the Web — visited millions of times a month by sellers, buyers, agents, lenders and homeowners. It also has begun distributing its free “Zestimates” through Yahoo.com and real estate brokerage sites.

But now Zillow is coming under harsh scrutiny. In a complaint filed Oct. 25 with the Federal Trade Commission, the National Community Reinvestment Coalition charged that Zillow knowingly deceives the public by presenting its property estimates as accurate, whereas in fact they are frequently far off the mark. The non-profit coalition, which consists of housing and economic justice organizations around the country, says its own audit of Zillow’s accuracy documented that its valuations are within 10 percent of actual [tag]market value[/tag] “less than one-third of the time.” The allegedly erroneous estimates are especially harmful in low- and moderate-income and minority neighborhoods, according to the complaint. (more…)

In a recent column you talked about the risks of making [tag]mortgage payments[/tag] after retirement. But this left me wondering: What is the alternative? If one has a mortgage on the day of retirement and one pays it off, then 100 percent of that capital is now tied up in the house. So it has zero chance of earning anything. Are you saying: Pay off all mortgages upon retirement, or sell the home and become a renter?

The answer depends on your personal balance sheet. It also depends on your income sources at retirement. You can get an idea of how the factors interrelate by considering these three examples. The Abundant Net Worths: Retired with a large pension, $1 million in taxable account assets, $500,000 in tax-deferred account assets and a mortgage balance of $200,000 at 5.5 percent. They live in an area with high real estate taxes and a state income tax.
Their corporate pension alone is high enough that all of their Social Security benefits have been taxed well before they count any income from their retirement savings. As a result, withdrawals from IRA accounts to support mortgage payments won’t cause any additional Social Security benefits to be taxed. (more…)

These days, the [tag]Baby Boomers[/tag] are approaching retirement. Most of their parents, too, are still living. This unprecedented population of elders has given rise to new financial tools. One among them seems all the rage: the [tag]reverse mortgage[/tag]. Reverse mortgages can be good tools to help retiring Americans’ financial stability. But, as with any financial service, potential borrowers need to be careful with whom they do business and beware of scammers looking to take advantage of unsuspecting victims.

f you believe a reverse mortgage could be for you, the next step is gaining a realistic view of how this loan could benefit you. For specific details, take these five steps before speaking with a lender. 1. Educate yourself. Many sources, both online and offline, provide helpful information on reverse mortgages, outlining factors borrowers should consider before taking a [tag]reverse mortgage loan[/tag]. Two good resources include the the AARP, and the U.S. Department of Housing and Urban Development (HUD). 2. Understand your equity. Equity in a property is the difference between a property’s market value and the amount of claims held against it (such as mortgage loans or liens). If your home is paid off, your equity is the current market value of your home. If you have a mortgage, your equity equals your home’s value minus the balance of the mortgage. (more…)

During the last couple of years, new listings sold in a matter of weeks in many areas. [tag]Home prices[/tag] escalated at a record pace. Financing a home purchase was rarely a problem — money was easy and interest rates were low. Few buyers wanted to miss the opportunity to make fast money in a market that seemed to defy gravity. What a difference a year makes. Now, the [tag]appreciation[/tag] rate is running at a snail’s pace, and declining in some areas. According to the National Association of Realtors, the median home price nationally declined a little over 1 percent in August from a year ago.

Until recently, [tag]home buyer[/tag]s bought not with an eye to a quick profit but in order to gain control over the place where they lived. As a homeowner, you don’t need the landlord’s permission to make modifications to the property to suit your needs. You aren’t at the mercy of a landlord who might raise the rent or ask you to move. Now there’s no guarantee that you’ll find a place to rent in a neighborhood where you’d like to put down roots. Also, rents are rising after years of lackluster performance. Additionally, homeowners tend to take a serious interest in preserving and enhancing the quality of the neighborhoods in which they live. Renters tend to be transient. The tax benefits of [tag]home ownership[/tag] shouldn’t be overlooked. While restrictions do apply, homeowners can claim a deduction for mortgage interest and property taxes from their [tag]federal income tax return[/tag]s. This effectively lowers the cost of home ownership for taxpayers who itemize deductions. (more…)

I’m a recent [tag]college grad[/tag] and now a young working professional making $39,000 a year who’s at a crossroad in life: I’m moving away from home and have to decide whether I should buy or rent a home. I find it hard just to pay rent, but when I think of the down payment, closing costs, taxes and homeowners insurance, all I see are $$$ signs. I’m also a little concerned about the [tag]uncertain housing market[/tag].

Hey, what’s the rush about buying a house? If you’ve just finished college and are moving out of your parents’ place, why not take some time to get your career going, save some money, build a [tag]401(k)[/tag] or other retirement account going and then think about buying a house? I say this not because I’m down on the joys of home ownership. I think having your own hacienda is great. It makes you part of a community and over the long term the [tag]appreciation of home values[/tag] can be a great way to build wealth. (more…)

Freddie Mac today released the results of its [tag]Primary Mortgage Market Survey[/tag] (PMMS) in which the [tag]30-year fixed-rate mortgage[/tag] (FRM) averaged 6.31 percent with an average 0.4 point for the week ending November 2, 2006, down from last week when it averaged 6.40 percent. Last year at this time, the 30-year FRM averaged 6.31 percent.

The [tag]15-year[/tag] FRM this week averaged 6.02 percent with an average 0.4 point, down from last week when it averaged 6.10 percent. A year ago, the 15-year FRM averaged 5.85 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.05 percent this week, with an average 0.5 point, down from last week when it averaged 6.14 percent. A year ago, the five-year ARM averaged 5.76 percent. (more…)

Mortgage lenders are finding themselves a strong ally in [tag]preventing foreclosures[/tag]: community groups. Consider East Side Organizing Project, a Cleveland neighborhood organization founded more than a decade ago to focus on improving local schools. J. White, among hundreds of other local residents, credits the group for preserving homeownership in the community by serving as a liaison between [tag]financially strained borrowers[/tag] with their [tag]mortgage lenders[/tag].

According to the industry group’s analysis, three out of four borrowers who enter the foreclosure process leave it through something other than a forced foreclosure sale, in which a lender repossesses a borrower’s house and sells it. It means that through lenders’ “loss-mitigation” efforts, they either pay off the arrears through agreed-upon payment plans with their lenders or sell their homes to avoid foreclosure and to protect their credit ratings and their ability to borrow again. Foreclosure prevention has proved challenging for borrowers and lenders. Delinquent borrowers may feel too wary of creditors to reach out to them, while lenders often find borrowers hard to reach. That is where community groups and nonprofit housing counselors come into play. (more…)

That is the latest marketing twist from [tag]Bank of America[/tag] Corp. With competition for [tag]home loans[/tag] increasing, the Charlotte, N.C., lender is encouraging its customers to apply for a mortgage with the bank and then shop around. If they decide to get their home loan elsewhere, Bank of America will write a $250 check to cover a portion of their closing costs. The Bank of America offering is the latest sign some lenders are beginning to emphasize price, service and stronger customer relationships in the face of slowing loan volume. Mortgage originations fell 29% in the third quarter compared with the same period last year, according to the Mortgage Bankers Association, as the housing market cooled and rising interest rates made it less attractive for borrowers to refinance.

Lenders are using rewards programs to try to boost customer loyalty. National City Corp. gives customers enrolled in its rewards program 50,000 bonus points when they take out a mortgage with the bank. Customers also earn bonus points for tapping a new home-equity line of credit. Citigroup Inc. offers special reward points to customers with a Citibank mortgage or home-equity loan, provided they also have a Citibank checking account and debit card. The points can be redeemed for a variety of rewards, from gift cards to plane tickets. The offers represent a new tactic for lenders, which for years vied for customers by rolling out mortgage products that allowed borrowers to lower their [tag]monthly payments[/tag]. These include [tag]interest-only mortgages[/tag] that allow borrowers to pay interest and no principal in the loan’s early years, option adjustable-rate mortgages that let borrowers make a minimum payment but can lead to a rising loan balance, and mortgages with 40-year terms. But the flow of new products has slowed and bank regulators have raised questions about the risks some [tag]nontraditional mortgages[/tag] may pose to borrowers and lenders. (more…)

The number of federally insured [tag]reverse mortgage[/tag]s jumped 77% to 76,351 from 43,131 in fiscal 2006, according to the [tag]National Reverse Mortgage Lenders Association[/tag]. With a reverse mortgage, homeowners 62 and older can borrow against their [tag]home equity[/tag], and the loan isn’t repaid until the homeowner moves or dies. (Learn more about reverse mortgages here.)

Reverse mortgages sound good, but you may not be able to borrow as much as you think. Use this calculator to see how much you can borrow, based on your age, your home’s value and prevailing interest rates. Now factor in costs: Homeowners may pay a fee of up to 8% of the value of their homes. Of that, 2% goes to government to insure the mortgage, 1% to 2% goes to the lender and the rest pays for closing costs. If it’s likely you’ll need to sell the home in the near term due to financial hardship or illness, a reverse mortgage may not be worth the cost. Instead, consider downsizing to a less-expensive home to free up your equity. (more…)