Finance Blog

Stay financially savvy with the Equifax Advisor.

Sign up for our FREE Monthly Email Newsletter


Thank you for signing up for the FREE Equifax monthly newsletter

In addition to keeping in the financial know, you may be interested in checking your credit score and report.

Understand your credit. Help protect your identity.

Equifax Complete™ Premier Plan

  • Know What May Influence Your Credit Score and Be Alerted of Changes
    Credit score monitoring with custom alerts
    Important Disclosure: The Equifax credit score and 3-Bureau credit scores are based on an Equifax credit score model and are not the same scores used by 3rd parties to assess your creditworthiness.¹
  • Help Protect Your Identity
    Automatic fraud alerts encourages lenders to take extra steps to verify your identity²
  • Lock Your Credit
    The ability to lock and unlock your Equifax Credit Report³
Save 75% your first 30 days with the purchase of Equifax Complete™ Premier

$4.95 for the first 30 days, then $19.95 per month thereafter. You may cancel at any time; however, we do not provide partial month refunds.4

¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.

²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.

³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.

4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.

Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.

What is a Reverse Mortgage?

Written by Ilyce Glink on January 30, 2012 in Real Estate  |   No comments

Selling a home isn’t an option for every homeowner, especially in today’s real estate market. If you’re house rich and cash poor, you might be looking for ways to tap into your home’s equity in order to have enough money to live on. A reverse…

Selling a home isn’t an option for every homeowner, especially in today’s real estate market. If you’re house rich and cash poor, you might be looking for ways to tap into your home’s equity in order to have enough money to live on.

A reverse mortgage is a government-insured home loan that lets homeowners convert a portion of the equity in their home into cash. A reverse mortgage may also be referred to as a home equity conversion mortgage (HECM).

The key difference between a reverse mortgage and a traditional home equity loan is that reverse mortgage consumers must be age 62 or older, must own the home outright (or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan), and must live in the home. The Federal Housing Administration (FHA) also requires consumers to attend a counseling session with an approved HECM counselor prior to obtaining the loan.

Unlike a traditional home equity loan or second mortgage, reverse mortgage borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or until they fail to meet the obligations of the mortgage.

It’s important to note that while the government insures HECMs (through the FHA), HECMs are not government loans. They are loans issued by banks.

The National Reverse Mortgage Lenders Association (NRMLA) is introducing a new information source for consumers interested in reverse mortgages. The website and the NRMLA’s 24-page road map booklet, titled “Borrow with Confidence,” combine to create a comprehensive resource that explains every aspect of a reverse mortgage.

Before you talk to a reverse mortgage lender, it’s a good idea to educate yourself on the types of reverse mortgages available. It’s important to understand which one suits you best and to find a lender that can offer it to you.

Types of reverse mortgages

1. HECM standard
Traditional HECMs began as a lending practice in 1989. There are currently more than 500,000 issued HECMs in the market.

Cost: Fees include an origination fee, an upfront mortgage insurance premium (MIP), a servicing fee, and traditional closing costs. “It’s the upfront mortgage insurance premium paid to HUD/FHA/FED that adds a cost,” says Peter Bell, president of the NRMLA. “[That premium is] 2 percent of the value of the home at the time of origination.”

Target: Senior homeowners who need the most money available to them.

2. HECM saver
The HECM saver is a lower-cost version of a HECM Standard. HUD and the FHA introduced it in October 2010. Since the introduction of the HECM saver, a new group of seniors have entered the market who might not have chosen a reverse mortgage before. The HECM saver is low risk and has more maneuverability, according to Kelly Sabino of US Mortgage Corporation.

Cost: Saving money comes from a lower upfront MIP and only a .01 percent upfront PMI premium. With the lower mortgage premium, the borrower gets a reduced amount of money available, ranging from 10 to 18 percent less than the traditional product, depending on age.

Target: Seniors who don’t need as much liquid cash and/or who don’t want to pay the higher fees. The NRMLA notes, “Because the fees are lower, and no monthly payment is required, it may also prove to be a better option than obtaining a home equity line of credit.”

The HECM saver borrowers are savvier, and they tend to have a more of an investment portfolio. They want to leverage their home, but still protect the equity.

3. HECM for purchase
The previously mentioned HECMs are most commonly used to eliminate debts, pay for healthcare and cover daily living expenses. However, the HECM for purchase is increasingly being used by seniors to purchase a home that better suits their needs.

It’s a different kind of home buying process. For example, a senior can take the proceeds of a HECM loan, pay off their existing mortgage, and downsize into a new home that better suits their needs. They may need to supplement the reverse mortgage proceeds with funds from selling a home, private savings, gift money, or other sources of income.

Cost: No monthly mortgage payments. Home-buying process costs could be covered, depending on the house into which you downsize.

Target: Seniors looking to downsize their home or move to a house that better suits their current needs and who do not need to use the money from a HECM.

4. Proprietary reverse mortgages
Right now, very few proprietary reverse mortgages exist. Proprietary reverse mortgages are sometimes called “jumbo” reverse mortgages because they are taken on higher-valued homes. These loans are not insured by the FHA, but they are backed by the companies that develop them. According to the FTC, these “jumbo” reverse mortgages are more expensive because, “the more you borrow, the higher your costs.”

These loans aren’t readily available in today’s tight lending market, but if your lender offers you a proprietary loan, ask to see a side-by-side comparison of the costs and benefits between a HECM and a proprietary loan.

Winter Home Maintenance and Weatherproofing Tips
Selling Your Home: Low Appraisal Options
Where Have All the Buyers Gone?
Buying A Home: Estimated Closing Costs
Hidden Benefits of Buying a Home
Housing Market Predictions: More Foreclosures on the Market

Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and at the Home Equity blog for CBS MoneyWatch.

The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.

No comments yet

Leave a Comment

Name :

Commenting guidelines

We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.

Some other factors to consider when commenting:
  1. Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
  2. All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
  3. We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
  4. Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
  5. Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
  6. Stay on topic. Your comment should be concise and pertain to the specific post in question.
  7. Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
  8. Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.

Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.

Real Estate Archive