posted by N. Sioris
Stumble It!
Recent statistics from HUD (Housing and Urban Development) indicate that since 1990, more than 308,000 senior homeowners have taken advantage of the federally insured Home Equity Conversion Mortgage otherwise known as HECM reverse mortgage. The number of FHA insured reverse mortgages has been steadily rising over the past 17 years, but the largest increase has taken place over the past six years. Between 2000 and 2006 the number of reverse mortgages backed by FHA has increased 10-fold.
In 2006 there were 76,000 seniors that obtained a reverse mortgage through HUD, compared to 6,637 in 2000. At the time of this writing, mid 2007, there have all ready been 69,833 FHA insured HECM reverse mortgages closed year to date. The HECM Reverse Mortgage continues to be the most popular reverse mortgage loan currently available. However, there are new proprietary reverse mortgages being introduced to the marketplace as new lenders enter this thriving niche market. Competition is expected to bring about lower costs, better service, and more choices.
More than 34 million Americans are currently over age 65. That number is expected to increase to almost 70 million by the year 2030, and will represent 20% of the population. Reverse Mortgages are expected to play a role in helping this huge aging population to maintain financial independence and security later in life.
posted by N. Sioris
Stumble It!
Money received from a Reverse Mortgage can be used for any purpose the homeowner chooses. One of the more popular choices for some seniors, is to fund long term care insurance. Tapping home equity gives retirees the purchasing power they need to buy comprehensive long term care insurance that can provide services for in home care as they age.
Many Americans are under the mistaken impression that Medicare covers in-home care and nursing home care on a long term basis. This however, is not the case. Medicare is designed to pay for hospitalization and other needed care on a short term basis. It does not pay for nursing home or in-home care, unless it is a part of a plan of rehabilitative or skilled care.
Medicaid, the federal/state program for low income individuals, does provide some assistance with long term care, but for people that have assets they must first "spend down" their assets before they can receive assistance on a long term basis.
With the advent of 78 million baby boomers on the verge of retirement age, many are predicting a disaster looming ahead for these entitlement programs. As it is right now Medicare's "trust fund" is filled with nothing but IOU's and Medicaid is "pay as you go" out of general tax revenues. Neither program is setting aside anything for the future. And no one can predict whether they will be solvent in years to come.
Consequently, older Americans need to be proactive in addressing their own long term care needs, and not rely on government entitlement programs. Reverse Mortgages can help with the expense of funding a long term care insurance policy and give seniors the peace of mind to know that when they need assistance, it will be there for them. And, it will be quality assistance of their own choosing. AARP, NRMLA (National Reverse Mortgage Loan Association) and NCOA,(National Council on Aging) have all published excellent consumer reports on the use of Reverse Mortgages to fund health care. All of these reports are available here.
posted by N. Sioris
Stumble It!
Reverse Mortgage Loans can be confusing. To help with some of the basics, here are a few things you should know about Reverse Mortgages, so that you can evaluate whether one is right for you and whether you qualify for a Reverse Mortgage Loan or not.
- All persons on title to the home must be at least 62 years old.
- There must be substantial equity in the home. (minimal mortgage balance or no mortgage)
- The bank does NOT own your home. You retain title to your property.
- You must continue to maintain your home, pay the property taxes and the insurance.
- Your heirs are NOT responsible if your loan balance exceeds the value of your home at the time the loan is repaid. The home stands ALONE for the reverse mortgage debt.
- When a couple takes out a Reverse Mortgage together and one person passes away or permanently moves to a nursing home or care facility, the other person continues to receive the monthly income or access to the credit line or proceeds of the Reverse Mortgage until that person either passes away or permanently moves out of the home.
- Before you can make an application for a Reverse Mortgage, all persons on title to the home must complete AARP-HUD approved counseling. The counseling is free and can be done either by telephone or in person. A certificate of completion is issued and must be presented to a Reverse Mortgage Lender at the time of application.
posted by N. Sioris
Stumble It!
Reverse Mortgages can be used for any purpose. Some seniors with substantial equity in their primary residences are taking out Reverse Mortgages to buy vacation homes.
Since borrowers have several options to choose from when deciding how they would like to receive the money from a Reverse Mortgage, some are opting to receive all or part of the money as a lump sum distribution. With the lump sum payout, they are then able to purchase a vacation or second home for all cash. By doing this, they not only do not have any monthly mortgage payments to make on their primary residence, which they took out the Reverse Mortgage against, but they also do not have any monthly mortgage payments on the vacation home, since they paid all cash for it. The seniors can then leave the vacation home to their heirs as part of their overall estate when they pass away and the primary residence is used to payoff the Reverse Mortgage. If there is additional equity in the primary residence after the Reverse Mortgage is paid off then the estate also receives the excess equity from the primary residence, as part of the overall estate.
As Reverse Mortgages continue to gain in popularity, we will see more creative ways that they can enhance the lives and lifestyles of the senior population.
Request A Free Reverse Mortgage Evaluation and see how much money you can receive from a Reverse Mortgage.
posted by N. Sioris
Stumble It!
Choosing a Reverse Mortgage Lender is not difficult once you know what to look for. You should always choose a lender that exclusively originates ONLY Reverse Mortgages. Do NOT use a traditional mortgage lender or loan originator.
Reverse Mortgages are completely different from traditional "forward" mortgages and for that reason, require in expert that has been trained in the intricacies of this highly specialized mortgage product. Additionally, a Reverse Mortgage Lender is usually a member of one or more recognized national advisory organizations, such as NRMLA, National Reverse Mortgage Lenders Association and or CSA, Society of Certified Senior Advisors among others.
A Reverse Mortgage Lender should be dedicated to working with seniors and their family members. They should welcome family members as part of the decision making process if desired by the senior homeowner(s). Reverse Mortgage Lenders should be patient and never use high pressure tactics to force a quick decision.
Reverse Mortgages are becoming extremely popular and new lenders are entering the market place at a rapid pace. Because of this, it is important for seniors and their families to be cautious when Choosing a Reverse Mortgage Lender. Be sure to ask the lender or loan officer how long he or she has been originating Reverse Mortgages. Ask if he or she originates traditional "forward" mortgages as well as Reverse Mortgages. Ask how long the company he/she represents has been originating Reverse Mortgages. Ask if the company originates traditional "forward" mortgages as well as Reverse Mortgages.
If the answer to any of those questions indicate that he/she originates any other type of mortgages in addition to Reverse Mortgages, then continue looking around until you find a Reverse Mortgage Specialist that exclusively originates ONLY Reverse Mortgages. Do Not settle for a run of the mill mortgage loan officer or company.
Choosing A Reverse Mortgage Lender is easy when you visit Let Your Home Pay You, a National referral resource for exclusive Reverse Mortgage Lenders.
Appraise This