McGowin-King Mortgage

Channel 42 Special Report Alabama Reverse Mortgage

admin — Mon, 14 May 2012 15:50:26 +0000

Channel 42 had done a special report on reverse mortgages. It was good to hear Christine Wade, an Alabama reverse mortgage borrower speak so highly of her reverse mortgage and what it has done to improve her life.

Forbes’ excellent explanation of the mortgage loan process.

admin — Tue, 08 May 2012 19:01:59 +0000

In a recent issue of Forbes, writer Mark Greene illustrates in enlightening fashion the realities of getting approved for a mortgage loan in 2012. It’s one of the clearest explanations we’ve seen about why the process of getting a loan approved these days is harder than ever. It’s not because banks are simply trying to be tough for the sake of being tough. And it’s not because no one wants to lend. It’s more a matter of lenders doing everything possible in underwriting a loan to make sure they won’t have to buy it back from Fannie Mae or Freddie Mac. And it’s working. One surprising statistic from the article: Of the secondary-market loans originated in 2007, 22% went into default within 18 months. Of those originated in 2009, only 2% went into default. That drastic change undoubtedly was brought about by several factors, but more stringent underwriting was a main factor. Green also does a brilliant job of explaining the key players in the mortgage process–from the originator to the processor to the underwriter. Click here if you want to read it, and let us know what you think.

Another reason not to be a couch-potato…

admin — Mon, 26 Mar 2012 19:03:57 +0000

We all know the effects that a sedentary lifestyle has on our bodies: increased risk of heart disease, diabetes, etc. Recent studies are also showing that inactive lifestyles are leading to increased rates of Alzheimer’s. Other factors include obesity (more common among the couch-potato group) and smoking.

There also seems to be a symbiotic relationship between sedentary lifestyles and depression. Those who aren’t active and engaged, are more likely to feel depressed, and if one is depressed the more likely it is that he or she will not desire to do much.

Working solely with Alabama reverse mortgage borrowers, I encounter very few seniors who don’t want to stay active. Many walk, do yard work, and other activities that “get the body going”. They recognize what we don’t need a study to tell us: being active is good for mind and body. And perhaps your yard as well.

Good news for many FHA borrowers who want to refinance.

admin — Thu, 08 Mar 2012 03:59:31 +0000

New guidelines have lowered the fees on many of these federal loans. The changes drop the cost of refinancing for millions of homeowners. Not all mortgages are eligible, but if yours is, the savings could be substantial. To read more about the new program, click here. If you think your loan fits the bill, or want to learn more, contact us here.

Market snapshot: Promising signs in new housing report

admin — Wed, 29 Feb 2012 23:03:24 +0000

Pending home sales in January bounced to a level not seen since the last days of the homebuyer tax credit in spring 2010. Called the Pending Home Sales Index, the report, which is based on pending contracts for home purchases, rose 2% from December nationwide. Even better, the jump in the South region was the most significant: an increase of 7.7%.

According to a report published on Mortgage News Daily, National Association of Realtors chief economist Lawrence Yun said the increase is a good sign. “The trend in contract activity implies we are on track for a more meaningful sales gain this year,” Yun said.

Yun also points to the impact of better jobs reports and greater affordability as factors heralding a good sales season. But he points out that a return to normal credit availability is key to a sustained recovery.

From this vantage point, that seems to be on the horizon. Increasingly, lenders seem to be servicing their loans, which would indicate increased confidence on their part. And while underwriting remains stringent, the new rules governing lending, which were put in place last spring, aren’t “new” anymore–so lenders and brokers know how to do business in the more legislated reality. At McGowin-King, we’re still locking loans for 30 days and closing them on time. And with rates at levels not seen in more than 50 years, the extra work required to make a loan happen pays off in huge savings over the life of the loan.

Reverse Mortgages: the low cost option for Alabama seniors?

admin — Wed, 08 Feb 2012 16:58:13 +0000

There have been some very beneficial developments in the reverse mortgage industry in the last 18 months or so. In late 2010, the “Saver” program was introduced. The Saver is so named due to eliminating, or “saving”, the borrower the upfront Mortgage Insurance Premium (MIP) fee paid to FHA. The MIP is the largest component of the closing costs.

More recently, interest rates have come down as well as other closing costs; enabling a borrower to get a reverse mortgage with no origination fee and no upfront MIP. This reduces the total cost to close a reverse mortgage dramatically. Many seniors are using the low cost Saver line of credit option as an alternative to a traditional Home Equity Line from a Bank. Unlike the Home Equity Line, senior reverse mortgage borrowers do not have to make monthly payments.

This low-cost Saver program has been well received by Alabama seniors and their financial advisors.

What’s the difference between APR and the interest rate?

admin — Mon, 30 Jan 2012 15:49:46 +0000

It’s one of the most common questions we get about loans. The answer is simple, but it’s not always easy to grasp. Essentially, APR is the effective rate of interest once you’ve added to the loan amount certain closing costs. So while the interest rate “is what it is,” APR is variable based on the closing costs of the loan.

You can use APR to better compare loan options, because especially for loans with the same interest rate, you can see how much your closing costs are impacting the overall cost.

For one of the better explanations of APR and interest rate, click here and scroll down to the third answer–it’s one of the simplest explanations we’ve read.

Good news for the reverse mortgage population

admin — Tue, 10 Jan 2012 21:37:44 +0000

Anyone who works closely with reverse mortgage borrowers will realize how indispensable Social Security and Medicare are to this group. Since 1975 when Congress added Cost of Living Adjustments to Social Security benefits, these “COLA” increases have averaged 4.2% annually. Up until 2010, there were increases every year. During the difficult economic time from 1979 to 1981, these COLA increases averaged 11.8 percent. In 2010 & 2011, there were no COLA increases. While interest rates may have been low and some measures of inflation were relatively low during these two years, food prices, gas, and medical costs increased each year.

Despite what the Social Security COLA says, many of our reverse mortgage borrowers and their families point out that their dollars don’t go as far as they used to. Fortunately, starting this month, there will be a 3.6% increase in Social Security benefits.

Other good news for our reverse mortgage population is that Medicare premiums, which were predicted to increase to the $106 range, will be $99.

Conusumer outlook on housing on the upswing.

admin — Tue, 10 Jan 2012 20:41:04 +0000

If the national mood is any indication, 2012 should be a better year for the housing market. That’s according to a new survey by Fannie Mae, conducted during the first three weeks of December. While in November, respondents said they expected their homes’ values to increase by only .2 percent, in December they predicted .8 percent. That’s not setting the world on fire, but it’s better than the declines of recent years. Fannie Mae chief economist Doug Duncan attributes the uptick in part to consumer relief at the resolution to the European debt crisis. For a more detailed look at the study, click here for the article.

Do the elderly lose their mental edge?

admin — Wed, 28 Dec 2011 23:00:04 +0000

The short answer is “yes”, but “no”.

One of the concerns in dealing with senior homeowners who are getting a reverse mortgage is whether they can accurately assess this decision. Disregarding those with dementia or Alzheimer’s, some will still worry that most seniors, by virtue of being “elderly”, may not fully know what they are doing when getting a reverse mortgage. In working with seniors who are getting reverse mortgages, I have found their decision-making skills to be as good as younger people. A recent Canadian study reveals some interesting information on this topic.

Younger brains are more adept at certain functions, like memorization, and their brains are recognized as being “quicker” than older minds. However, it turns out that this is a “Tortise and Hare” situation. Younger people tend to reach decisions faster and use multiple areas of the brain in doing so, even if these regions are not especially relevant or helpful to the decision at hand. Decisions made more quickly, however, are more likely to be incorrect. On the other hand, according to this study, older people tend to use only those areas of the brain that related to the decision, and while they arrived at an answer more slowly, they were less likely to miss a question.

My experience with reverse mortgage borrowers confirms this. It might take a senior a while to understand the nuances of a reverse mortgage, but once they do, they seem to be able to draw on wisdom to make the best decision.