HECM Reverse Mortgage - Could Be Your Bailout

7/31/2009

posted by N. Sioris

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HECM reverse mortgages offer a higher lending limit than ever before. At the end of last year FHA changed their antiquated way of determining loan limits by simplifying it into one National loan limit of $417,000.



However, shortly after that, the economy careened off a cliff sending everyone scrambling to hold on to whatever might be left of their stock market portfolios and retirement assets. As the financial meltdown's tentacles choked off bank liquidity and literally froze credit, President Obama had to implement drastic measures to try to stimulate the economy.

By early February of this year, the Economic Stimulus package was passed. Included in the stimulus was a provision that temporarily increased the national loan limit for HECM reverse mortgages all the way up to a whopping $625,500. Wow, that's huge!!

The increase to $625,500. helps in several ways. First, it allows folks with home values higher than $417,000. to access a much greater amount of their equity through HECM reverse mortgages, than they would have been able to at the lower limit of $417,000.

Secondly, because of the banking crisis, the lenders that previously offered jumbo reverse mortgages to people with high value homes, stopped offering those loans. Consequently, HECM reverse mortgages are almost the only viable option available in today's market, regardless of home value.


BUT ONLY UNTIL THE END OF 2009

The loan limit increase for HECM reverse mortgages is due to expire at the end of 2009. At that time the loan limit will revert back to $417,000. unless Congress decides to extend the provision.
If you have a high value home, and think that you may need to access your home equity through a government reverse mortgage, you may not want to procrastinate. Take advantage of the stimulus package now and create your own personal bailout plan.

When Is It A Good Time To Get A Reverse Mortgage?

7/29/2009

posted by N. Sioris

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Over the weekend I was invited to a get-together where there were people from all different age groups. Several of the older attendees knew that I work in the reverse mortgage field. One gentleman in his mid 70's pulled me aside and said, "My wife has been saying that she is nervous about what will happen financially if I pass away before she does." He went on to say that she suggested that maybe they should get a reverse mortgage. He then asked me, "Do you think she is right, should we go ahead and get a reverse mortgage, is now a good time?"


Do You Need The Money?

My first question to him was; "Do you need the money?" He said, "No, we're fine right now, but if she doesn't have my retirement income if I should pass away, she's worried that she might not be able to finish paying off the mortgage and maintain the bills." As it turns out they have less than a hundred thousand dollar mortgage balance on their home that's worth in excess of three hundred thousand. They are not strapped for monthly income and they have some other assets as well.

My short answer to him was, "No, I wouldn't get a reverse mortgage at this time." He took a step back and looked at me with a puzzled expression on his face. He obviously wanted a more in depth explanation for my answer. So we had a long chat and the bottom line is that my advice to him was that if the scenario he presented does happen, then his wife can go ahead and get a reverse mortgage at that time. By then she will be older, hence eligible for a higher loan-to-value percentage, and their loan balance will be less or possibly even non-existent.


A Light-Bulb Moment

During our conversation it became clear (once again for about the hundredth plus time) how mis-understood HECM reverse mortgages are. This charming gentleman had no idea that even though there are no mortgage payments required on HECM reverse mortgages, there is deferred interest accumulating on the loan from day one, and will be deducted from his estate or heirs inheritance when the home is sold or refinanced at the time the loan is paid back. From the look on his face as I explained how the loan is a "rising debt" loan, I could tell he was truly experiencing a light-bulb moment.

To get a reverse mortgage when you do not really need the money makes these loans a very expensive proposition. But, as I told him, "HECM reverse mortgages are expensive if you don't need the money. However, they are NOT expensive if you do need the money and you have no alternative assets."

What Is A Reverse Mortgage - Video

7/21/2009

posted by N. Sioris

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What is a reverse mortgage loan? How can the money be used? How do I qualify for a reverse mortgage loan? Do I have to make payments on a reverse mortgage loan? Do I have to pay taxes on the money from a reverse mortgage loan?

How To Qualify For A Reverse Mortgage Loan

7/20/2009

posted by N. Sioris

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A reverse mortgage loan allows homeowners 62 and older a safe way to tap into home equity without the burden of making future monthly payments.

And, because a reverse mortgage loan does not require monthly payments or any re-payment as long as the borrower lives in the home, there are no income or credit qualifications to be met in order to qualify for a reverse mortgage loan.


TO QUALIFY FOR A REVERSE MORTGAGE LOAN THE CRITERIA ARE:


All Owners on the title to the home must be 62 years or older.

The home must be the primary residence for the borrower(s).

The home should have no mortgage or the mortgage balance

should be small enough to be paid off by the reverse mortgage loan



Not all properties qualify for a reverse mortgage loan. Some that do not, are manufactured/mobile homes built before June, 1976 and any mobile or manufactured home that is on rental land.

Not all co-op properties qualify. If your property is a co-op check here for more reverse mortgage loan information. You can also call us at 1-888-269-1098.

In most cases Agricultural land does not qualify for a reverse mortgage loan.

You can read a more detailed description of how to qualify for a reverse mortgage loan here.


You may also wish to request a free reverse mortgage loan quote today.


See exactly what a reverse mortgage loan might provide for you in the way of supplemental monthly income, a line of credit to be used as needed, or a lump sum pay out to you all at once.

There has been increased interest in a reverse mortgage loan as a result of the current credit crisis that we are facing. Many people that have lost substantial stock market assets are now turning to a reverse mortgage loan so that they don't have to liquidate depressed assets.

Still other senior homeowners have actually saved their homes from foreclosure by using a reverse mortgage loan. They not only save the home but they become mortgage payment free for as long as they live in the home.