Hello Kelly, I think you are looking at the TALC, which is the Total Annual Loan Costs sheet, correct? When you look at the sheet, the rate is very high when the loan is only kept for a few years and then begins to lower as the loan is kept for longer and longer periods of time. This is because all the fees are front-end loaded. In other words, you pay them at the start of the loan, and they are the same whether you keep the loan for 2 years or 20 years. As you determine what those costs are over the life of the loan, the longer you keep the loan, the less those fees cost you on an annual basis. For example, if you pay $10,000 to get a loan and you only keep the loan for 2 years, the fees come out to be $5,000 a year cost which is very high. If you keep that same loan for 20 years, the fees only cost you $500 per year. It only stands to reason that as a percentage, the higher cost for the shorter period also drives the percentages up for the shorter periods as well. Therefore, we have always told people that the reverse mortgage is meant to be the last loan you will ever need. And that if you only need the loan for a couple years, unless there are extenuating circumstances, we do not recommend this loan for you. For some people, they absolutely needed the loan with no payments for a shorter period and the costs were much better than the alternatives. In the case where a borrower could lose a home to foreclosure or income or a lump payment is not received which could also cause the borrower to lose their home in less than 24 months, it might make sense for their circumstances even if they plan to move later or pay the loan off with the receipt of a bulk payment at that time. But for most people, it makes more sense if you can keep the loan longer, let the costs you paid to get the loan stretch out longer and therefore bring the cost of the loan down over time. The TALC allows you to see this by showing you the difference that time makes on the loan and its cost.

Hello Bernice, Yes, the homeowner is responsible for the taxes and insurance on the home. The Mortgage insurance and interest that accrues on the loan is added to the loan balance and you are not required to pay a payment on this balance for as long as you live in the home and pay property charges in a timely manner (taxes, insurance, HOA - if any, etc.). You can however choose to make any payment at any time you like up to and including payment in full with no prepayment penalty so the answer to your question #3 is yes, you can choose to make monthly payments if you want to but are not required to do so. You can choose a fixed rate loan or an adjustable-rate loan. If you choose a fixed rate, the interest will not go up or down while it can go up and down on the adjustable-rate programs with the market. However, the fixed rate programs require you to take all your funds at once at loan closing and you can never take another draw so if you do repay some of the funds, you cannot redraw them later. The adjustable-rate program is an "open-ended" loan which allows you to take only the funds you need to start the loan and then you can take additional draws later if you want. So if you do not need all the funds from the start (i.e. to pay off an existing mortgage) and want to just draw on them when needed, your only option is to take the adjustable rate line of credit (which will save you money in the long run because you only accrue interest on the money you actually draw and not the money remaining in the line that is available but not yet borrowed).

Hello Lyle, Your question is prefaced by what to do as the smartest choice for your heirs. If you are trying to leave behind the largest estate and biggest asset, then you would not want to use a reverse mortgage which require you to not pay any payments. On the reverse mortgage, as that interest accrues and you make no payments, the balance on the loan grows. That works well for homeowners looking to eliminate their expenses, but it means there would be less for heirs to inherit. So if you ask me what is the best way to leave your heirs the property with the largest value, I would tell you that if you can afford the payments on the home and never foresee a time when they might be restrictive, get the lowest rate you can on a forward rate and term refinance. However, if you ever see a possibility of the payments restricting your ability to enjoy your life or your home, or you think there may come a time when more funds are needed, the reverse mortgage is a great financial tool and there is more than one way to proceed that might really kill two birds with one stone. You can get the reverse mortgage and keep the balance from rising. Firstly, I would recommend that you look at the line of credit option. Yes, it is an adjustable rate loan, but the rates are low, and the life cap is under 8% with the current start rates. Not to mention that we have not gotten near that rate in over 10 years now. But also, the line of credit does not require you to draw funds you do not need or want currently. If you leave them in the line, you accrue no interest on those funds and the unused balance grows at a rate equal to the interest accrual plus the MIP which is approximately 3.4%. Now this is not interest you are earning; it is an increase available on the line that if you never use it does not need to be repaid and it costs nothing. If you ever do need additional funds though, they are there and higher than when you first closed the loan. Next, although there is never a loan payment due on the reverse mortgage as long as you live in the home, you can choose to make a payment in any amount at any time if you so desire. There is no prepayment penalty and so if you want to and can easily make a monthly payment, you can also keep the balance from growing or even pay it down or off with a reverse mortgage. But the great thing is that since it is not required, if anything comes up and you must skip a payment or just want to in order to do something else that month, you can do so with no negative credit or other issues. And the unpaid balance keeps growing the entire time you have the loan so if you are paying the loan down but things suddenly change and you find you have a need for the funds after all, they are always available to you. The reverse mortgage is the only loan that guarantees the funds will always be available (the lender cannot close the loan as they can with a Home Equity Line of Credit), You can make payments if you want to continue to pay the loan down to leave a larger asset to heirs, but if needed there are none required allowing you to live in the home payment-free for life if that becomes a primary concern later over the asset you leave to heirs. Only you can determine which is best for your needs but only one loan will allow you to change whether you make payments or not later to allow you to eliminate payments when needed and gain access to cash if you need it.

Good Afternoon, Most people prefer the annual adjustable rate reverse mortgage over the monthly adjustable rate loan. It allows the rate to remain fixed for 12 months at a time and has a 2% cap in any one year and a 5% cap over the life of the loan which means that the rate can never rise more than 2% over the prior year or 5% more than the start rate. But I encourage all borrowers to compare all programs, discuss the options with your family and/or trusted financial advisor and decide for themselves which is the right program for them.