Reverse Mortgage Tips and Tricks
Financial
freedom you can only get when you hit age
62.
No matter if
you're researching the reverse mortgage to
finance home improvements, pay off an
existing mortgage, pay for health care costs
or increase monthly income you're not alone
(assuming you ARE over age 62).
Are
reverse mortgages everything you've heard
they can be?
If you
consider that you'll no longer be paying the
bank and instead the bank pays you -- this
form of financing can be a god send.
Here, we'll
cover the most common questions about the
reverse mortgage for senior home owners.
Let's go over
the reverse mortgage basics and answer the
question; what is a reverse
mortgage?
The reverse
mortgage loan is simply a loan against your
property allowing you to get cash, but must
eventually repay with interest (stay with me
here, there really ARE some advantages to
that which you'll see).
Does
this mean I won't own my home any longer and
will have to surrender ownership to a
reverse mortgage lender?
Not at all,
you'll still own your home and be able to
enjoy it for years to come. Maybe even the
rest of your years to come.
Of course,
don't pay your property taxes and let the
home got to waste and you COULD risk losing
the home in the most extreme cases. The nice
thing is that the lender would need HUD
(Department of Housing and Urban
Development) approval to do so and the
government isn't going to be kicking any old
folks out on the street anytime soon.
Who is
eligible to refinance into the reverse
mortgage? Do they only make reverse
mortgages for seniors?
Anyone 62
years of age or older (senior homeowners),
who has a home which is a main residence and
has received specific reverse mortgage
counseling (see resources below). Also, you
do NOT have to have perfect credit like
other loan types.
Why
would anyone get a reverse mortgage?
Anyone who is
house rich and cash poor. For example an
elderly person who does not want to work
their retirement away yet still requires
cash to live. This is not necessarily for
someone who NEEDS cash now, but more over
time or longer term.
Where
can I get a reverse mortgage?
The following
list provides the best information on
reverse mortgages, the top three resources
for obtaining a reverse mortgage and some
helpful reverse mortgage lenders;
1. HUD offers
the "home equity conversion mortgage" better
known as HECM. Phone; 888-466-3487
2. Fannie Mae
offers the "Home Keeper" and is is a lender
offered loan. Phone; 800-732-6643
3. Financial
Freedom offers the "Cash Account" and can be
contacted by calling; 888-REVERSE
You can also
get access to the National Reverse Mortgage
Association Act at 866-264-4466, who can
help with finding a reverse mortgage
specialist or preferred counselor in your
area along with additional resources.
How
much can you borrow? (note: using
an online reverse mortgage calculator can be
misleading)
Loan limits
are dependant on your age, the value of your
home and the current interest rates.
Essentially older borrowers with more
valuable homes can get lower rates and
larger available cash limits.
Maximum
lending limits change each year. The lenders
above will answer your loan limit questions.
Who
should NOT get a reverse mortgage?
Simply put,
due to the higher costs of obtaining this
type of financing you would not want to get
a hud reverse mortgage OR some of the fha
reverse mortgages if you only plan on being
in the home for a short time (3-5 years or
less).
Reverse mortgages sound like a great deal,
why are they not more popular? What's the
catch?
In most cases,
people just don't understand the benefits or
advantages of this type of
reverse mortgages financing. Oddly
enough the number one reason for lack of
popularity of this loan is the
Stupid Home Owner
syndrome OR rather the act of knowing
nothing about your home financing options.
Don't let stupidity rule your choices when
it comes to your finances.
In conclusion,
many people have not saved nearly enough for
their retirement and the reverse mortgage
can be an amazing alternative to surviving
retirement. This is especially true for baby
boomers.
With Social
Security in the dumps and Medicare and
Medicaid being less generous -- it's clear
to see the good old US of A is facing a
retirement crisis. These reverse mortgage
loans may be the answer.
As you may
already see, reverse mortgage programs can
be a great solution to a growing problem.
Why not do the reverse mortgage dance and
let the bank pay you instead. You're heirs
can pay off the debt after your gone and the
house gets sold. Love now pay later might be
the new motto of a new generation (oh wait,
it already is).
Continuing to
live in your home and getting cash can be
the answer for some. Use the resources above
to springboard toward the answers that fit
your goals.
