Reverse Mortgage Loan Stats April 2015

The Home Equity Conversion Mortgage is the federally insured reverse mortgage product. It is insured by the Federal Housing Administration (FHA), a branch of the U.S. Department of Housing and Urban Development (HUD). HECMs account for nearly all reverse mortgages made today in the U.S.

Below are the number of HECM loans made in 2015 to date. HUD provides data by federal fiscal year (each federal fiscal year begins October 1 and runs through September 30 of the following year. FY 2014, for instance, began October 1, 2013, and ends September 30, 2014).

FY 2015–14,203

Is it time to find a remortgage?

There are two likely situations in which you might find yourself looking for a remortgage. You may be coming to the end of an existing mortgage deal, in which case you have a choice of automatically moving onto your lender’s SVR (Standard Variable Rate) or remortgaging to a new deal.

Secondly, you might be on an ongoing variable-rate or tracker deal but considering a remortgage – perhaps with another lender, perhaps to a fixed-rate deal.

Either way, it’s important to understand what’s involved in the remortgage process before you go ahead. There’s more information on remortgages here, but here’s a quick look at the questions you should be asking yourself before you start talking to lenders.

Would you be better off?

On the one hand, you may want to remortgage to a new deal with a better interest rate than you’re currently paying. In the current climate, this may not be too difficult: lenders are offering some of the lowest rates in years, and if you’ve kept up with your payments in the past then you’re more likely to get a better deal this time around.

You shouldn’t just remortgage for the sake of it. Sometimes when a fixed-rate term finishes, you may find that the SVR charged by your lender is actually significantly lower than the rate you were previously paying. But if it’s not, you should probably try to find a cheaper deal sooner rather than later.

Even so, you might still accept paying more if you’re switching from a variable-rate mortgage to a fixed-rate deal. A fixed rate means you’ll know exactly how much you’re paying every month, and you’ll be protected against sudden rises in your mortgage payments.

If you know you can afford it, it might be worth switching to a fixed-rate deal for the security it can bring, even if it is more expensive than your current arrangement.

Consider the added costs

Remortgaging rarely comes cheap. Mortgage lenders tend to charge some kind of arrangement fee, especially on fixed-rate deals, and this can often cost anywhere between £99 and £1,000 – sometimes more.

Most lenders will allow you to add this arrangement fee onto your mortgage to spread out the cost, but this will of course add to the total amount owed, and could increase your monthly payments.

Also consider the legal fees charged by your solicitor, which can also add up.

You must consider these additional costs, and whether you can afford them up front or if you will have to add them to your mortgage, before you start.

Reverse Mortgage Trends 2010

This is a guest post of Caleb Manscil

Reverse Mortgage Trends

If you search for “reverse mortgage” in Google Trends one will find some interesting bits of information.  The majority of searches for reverse loans come from the Sun Belt region (the South and Southwest States in the United States—it’s called the Sun Belt because of the long summers and mild winters).  The top ten cities that are searching for reverse loans include Miami, Tampa, Sacramento, Honolulu, Orlando, San Diego, Baltimore, Phoenix, Minneapolis, and Irvine; all but three of the listed cities are located in the Sun Belt region.  This tidbit of information is telling about a couple of things in the reverse mortgage industry.

Reverse Mortgages in the Sun Belt Region

So, why are reverse mortgages searched for more from the Sun Belt region as opposed to population centers like New York, Chicago, or Detroit where credit score repair scores higher?  We can find the answer to that question in the rules and regulations for reverse mortgages.  The first rule for reverse mortgages in the United States is that the borrower must be at least 62 years old.  This loan was created originally for retirees that were house rich but cash poor.  Reverse loans enable such individuals to use their home equity wealth to pay for health and life conditions that have arisen after becoming house rich.  So, regarding that first rule and prerequisite of obtaining a mortgage those that are truly searching and interested in reverse mortgages are likely over or around the age of 62; and where do large populations of those over or around the age of 62 live—within retirement communities in the Sun Belt region.

Another rule or regulation that points to the trending information includes that people must own the majority of their home.  Often, when retirees move to their location of choice to stop working they purchase a home outright or at least purchase the majority of their home. Reverse loans are extended to those that have complete or at least majority ownership of their abode.  Reverse loans are extended on the owners home equity in the form of a lump sum or multiple payments of some sort.  The homeowner doesn’t have to repay until the owner dies, the home is sold, or the owner leaves the home.  This type of loan gives the retiree money to use for other things such as living expenses, medical expenses, or to use at their leisure.

Trends Tell a Story

Understanding the trends within an industry is interesting and important for both consumers and producers, but sometimes it’s much harder to understand what’s going on behind the trends.  For instance if government grant money searches were trending upward, you can rest assured that the media was covering the topic.  With a little bit of trend analysis it’s easier to understand the numbers behind the trends and such is the case regarding the trends of reverse loans.