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Monday, September 27, 2010

How do reverse mortgages compare to conventional mortgages?

I've found this article by Beth Paterson that compares a reverse mortgage to a conventional mortgage. I found it useful since all of us are familiar with how conventional mortgages work, but not so much with the reverse mortgage.  Click here to read the article.

1 comment:

  1. We are going to be in the market for a new mortgage in 2012, and we are strongly in favor of a 15-year. After losing an estimated 28% and counting on our current place (according to zillow estimates, we are currently ‘underwater’ by $1600 after a little over 5 years) we’d much rather be in a position where we are rapidly paying down principle – and since it’s a new mortgage the closing costs are going to be the same whether we get a 15-year or a 30-year, so we’d rather take the lower interest rate. We are saving up cash for the 20% down payment and hoping our neighborhood recovers enough by 2012 to cover our closing costs for selling it (we’d need the value to increase roughly 3%).

    Given that our down payment is going to dictate our purchase price rather than our monthly payment, we will be able to comfortably afford a 15-year with plenty of room left over.


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