About Barnstable County, MA

What Is A Reverse Mortgage?
A 12 Part Series

Part 1 - Definition of a Reverse Mortgage

A reverse mortgage is a Home Equity Conversion Mortgage (HECM) - it's a special type of home loan that allows senior citizens to convert a portion of the equity in their homes into cash. Reverse mortgages are offered through the FHA (Federal Housing Administration), and is available only to homeowners or home buyers aged 62 or older.

A reverse mortgage is a safe plan that can give older Americans greater financial security. The equity that has built up in their homes over years can be paid to senior citizens. Because they are being paid from the equity in their homes, senior citizens can use the cash for whatever purpose they want. Many seniors use it to supplement social security and retirement benefits, meet unexpected medical expenses and daily living expenses, make home improvements, travel, and more.

A reverse mortgage is often used to fully pay off an existing home mortgage and thereby allow Seniors to cease making monthly mortgage payments. And, unlike a traditional home equity loan or second mortgage, no repayment is required on a reverse mortgage until the borrower(s) no longer use the home as their principal residence.

Seniors can also use a reverse mortgage to purchase a primary residence if they have cash on hand or have proceeds from the sale of another home. The cash on hand is used to pay the difference between the proceeds or a reverse mortgage and the sales price plus closing costs for the property they are purchasing.

The maximum available loan amount is a percentage of the home's value that is based on the age of the youngest homeowner. The loan does not have to be repaid until the last surviving homeowner permanently moves out of the property, sells the home, or passes away. At that time, the estate has 12 months to repay the balance of the reverse mortgage or sell the home to pay off the balance. The estate initially has 6 months, but up to 2 3-month extensions can be granted. All remaining equity is inherited by the estate. And, the estate is not liable if the home sells for less than the balance of the reverse mortgage.

Difference Between a Home Equity Loan and a Reverse Mortgage

With a traditional second mortgage or a home equity line of credit (HELOC), you must have sufficient income, credit and equity in the home to qualify for the loan. You are also required to make monthly mortgage payments. The reverse mortgage is different from a home equity loan in that it pays you, and is available to you regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limit for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.

You don't make payments, because the loan is not due as long as you live in the house, and it is your primary residence. As with all home owners, you still are required to pay your real estate taxes, homeowner's insurance, and other conventional payments such as utilities. However, with a reverse mortgage, you cannot be foreclosed or forced to vacate your house because you "missed your mortgage payment."

Next: Part 2 - Reverse Mortgage Eligibility Requirements

If you're 62 or older and are looking for money to finance a home improvement, pay off your current mortgage, supplement your retirement income, to pay for healthcare expenses, or even to buy your retirement home, then consider getting a reverse mortgage. Find out how a reverse mortgage can use the equity in your home to pay you.

Home Value Update for Barnstable MA Through October 2009

According to Trulia.com, the sale prices of single family homes have increased 18.9% in the past year through the end of October 2009. The current mean sales price of homes on the market in Barnstable, MA, is $535,000. Below is a chart of the trend of listing prices of homes for sale in Barnstable, MA, in the past year through October 2009:

Barnstable Recently Sold Homes

The $8000 first-time homebuyer tax credit has been extended, and now expires on April 30, 2010. So, there's no better time than now to buy a home in Barnstable, MA, or surrounding area. If you're looking for a home or condo to purchase in Barnstable, MA, or in the surrounding area, then try this home search.

You can still buy a home with no money down with the USDA Rural Development Home Loan program. With the FHA Mortgage program, you can purchase a home with as little as 3.5% down. When you're ready to buy a home, find out how much home or condo you can afford to purchase in Barnstable, MA, or in the surrounding area.

If you're 62 or older and are looking for money to finance a home improvement, pay off your current mortgage, supplement your retirement income, or pay for healthcare expenses, then consider getting a reverse mortgage. Find out how a reverse mortgage can use the equity in your home to pay you.

The Mortgage Interest Rate Lock Advisory for Barnstable MA for November 20, 2009

Here are some of the events affecting mortgage interest rates today in Barnstable, MA.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.72 this morning - up 1/32 from yesterday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.5% coupon:

The FNMA 30-Year 4.5% MBS coupon is currently trading at 101.84 - up 4/32 from its opening. Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage interest rates. I expect that mortgage interest rates will be about the same in price this morning as compared to yesterday.

Recent Activity in Mortgage Backed Securities:

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

• There are no economic reports scheduled for release today.

What's Happening With Mortgage Interest Rates Today:

Low to Moderate Volatility. There's not much room for MBS prices to move higher or for mortgage interest rates to move lower at the moment. If you're happy with the rate being offered to you and don't want to risk mortgage interest rates moving higher, you should apply and lock in today. Mortgage rates are currently inching upwards again. If you have not yet locked in your mortgage interest rate, please proceed with caution and maintain contact with your mortgage professional. Also, give very serious consideration to applying now and locking in before mortgage interest rates get worse.

There are a couple of economic reports scheduled for release next week. Next week is also a holiday-shortened week due to Thanksgiving. Look for more details on next week's events on Monday.

My Mortgage Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

• Lock if my closing was taking place within the next 7 days
• Float if my closing was taking place between 8 and 30 days
• Float if my closing was taking place between 31 and 45 days
• Float if my closing was taking place between 46 and 60 days

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.

Get today's mortgage interest rates for your situation in Barnstable, MA.

A short while ago I noticed a pretty woman sitting on a bench outside my Cape Group real estate office . Of course I notice pretty women, but this one had cameras and light screens and a crew all around her. It was like a version of Cape Cod's Next Top Model.

I watched for a few minutes and then asked what the pictures would be used for. It turns out that this was for the Appleseeds Clothing store catalog. They chose a few more locations on Main Street in front of a few different shops and restaurants.

I asked how they chose Falmouth. They knew about Falmouth from previous research. However, they like to have a portfolio they can look through that show cases possible locations in any US town for a "shoot." So if you want your town considered, get a portfolio together.

If you get the Appleseeds Clothing catalog, now you'll know where they took the pictures. Come to Falmouth and take your own!

Here they are setting up another shot outside the Firefly.

Home Value Update for Mashpee MA Through Ocober 2009

According to Trulia.com, the sale prices of single family homes have increased 15.2% in the past year through the end of October 2009. The current mean sales price of homes on the market in Mashpee, MA, is $317,579. Below is a chart of the trend of listing prices of homes for sale in Mashpee, MA, in the past year through October 2009:

Mashpee Recently Sold Homes

The $8000 first-time homebuyer tax credit has been extended, and now expires on April 30, 2010. So, there's no better time than now to buy a home in Mashpee, MA, or surrounding area. If you're looking for a home or condo to purchase in Mashpee, MA, or in the surrounding area, then try this home search.

You can still buy a home with no money down with the USDA Rural Development Home Loan program. With the FHA Mortgage program, you can purchase a home with as little as 3.5% down. When you're ready to buy a home, find out how much home or condo you can afford to purchase in Mashpee, MA, or in the surrounding area.

If you're 62 or older and are looking for money to finance a home improvement, pay off your current mortgage, supplement your retirement income, or pay for healthcare expenses, then consider getting a reverse mortgage. Find out how a reverse mortgage can use the equity in your home to pay you.