When you obtain a quote on a California reverse mortgage for their home, it may often look like a page full of numbers that don't make much sense. This article will explain some facts about the California reverse mortgage quote so that the senior homeowner, their heirs and advisors, can understand it and make a good decision about the terms that are offered.
A California reverse mortgage quote shouldn't be confused with the results produced from one of the many available online California reverse mortgage calculators. These online mortgage calculators are useful in that they can tell the senior instantaneously whether they are likely to qualify for a California reverse mortgage. If so, they will reveal an approximate amount of money they qualify for and in what forms they can receive it. But the figures that online California reverse mortgage calculators generate do not answer many questions such as closing costs, interest rate details, and whether the programs presented are the best of all available choices.
A California reverse mortgage quote should contain a number of key elements. You should compare, in side-by-side columns, at least three California reverse mortgage programs. Under each column, there will be a list of line items that define the basic financial terms of the loan. Different lenders will offer slightly different quote forms, so this article will cover a couple of the commonly-listed terms, some of which may or may not appear on your particular quote.
There are over twenty available California reverse mortgage programs, so be aware that you are looking at just a small sampling of them. All but two California reverse mortgage loans carry adjustable rates, so the interest rate section will show you the interest rate index and the margin that is added to the index to get your total interest rate. The index is either the six month Treasury Index or the LIBOR which are the commonly used indexes for mortgage loans. This margin is essentially the profit that the lender makes on the interest rate. In addition to the interest rate, all FHA California reverse mortgage products tack on one half of one percent for ongoing mortgage insurance. This will effectively increases the interest rate by that amount and does not change from lender to lender.
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