Reverse Mortgages - Why They Are Growing in Popularity
As I approach my senior years, I realize how important planning for a comfortable retirement is.
Everyday I see the challenges my friends, family and clients are having in making ends meet now that they are living on a fixed income--even though they have plenty of equity in their homes.
After working a lifetime to be debt free, there MUST be a viable solution! One solution I found, that is gaining in popularity, is the FHA Insured REVERSE MORTGAGE also know as the Home Equity Conversion Mortgage (HECM).
You might be thinking: "The bank could take my home!" At one time I thought the same thing.
Fortunately, that's just a myth.
In fact, the opposite is true; with a traditional "forward" mortgage if you miss payments the bank can take your home.
With a HECM, because there is NO mortgage payment and because it's FHA Insured, no one can ever take your home--it is safe and secure! I hear the most amazing stories of how a Reverse Mortgage has saved seniors from foreclosure, and from having to make a choice between eating or taking their medication.
I'm working with one family now who's 99-year-old Mom will be able to stay in her home with a full-time nurse instead of being put in a care home.
They would have had to sell the home, but instead they can use the equity she worked so hard for to be able to stay at home where she belongs and where she is most comfortable.
I assisted two more clients recently in stopping foreclosure.
Another of my clients was able to make her home more secure by replacing her jalousie windows with dual pane sliders.
To me, the many different uses of this timely loan are priceless! So, what exactly is a Reverse Mortgage?
Everyday I see the challenges my friends, family and clients are having in making ends meet now that they are living on a fixed income--even though they have plenty of equity in their homes.
After working a lifetime to be debt free, there MUST be a viable solution! One solution I found, that is gaining in popularity, is the FHA Insured REVERSE MORTGAGE also know as the Home Equity Conversion Mortgage (HECM).
You might be thinking: "The bank could take my home!" At one time I thought the same thing.
Fortunately, that's just a myth.
In fact, the opposite is true; with a traditional "forward" mortgage if you miss payments the bank can take your home.
With a HECM, because there is NO mortgage payment and because it's FHA Insured, no one can ever take your home--it is safe and secure! I hear the most amazing stories of how a Reverse Mortgage has saved seniors from foreclosure, and from having to make a choice between eating or taking their medication.
I'm working with one family now who's 99-year-old Mom will be able to stay in her home with a full-time nurse instead of being put in a care home.
They would have had to sell the home, but instead they can use the equity she worked so hard for to be able to stay at home where she belongs and where she is most comfortable.
I assisted two more clients recently in stopping foreclosure.
Another of my clients was able to make her home more secure by replacing her jalousie windows with dual pane sliders.
To me, the many different uses of this timely loan are priceless! So, what exactly is a Reverse Mortgage?
- A Reverse Mortgage converts home equity (similar to a HELOC) into cash that can be received as a lump sum, a line of credit, payments for life or any combination of the aforementioned.
- As long as the senior continues to live in their home, they will never have to repay their reverse mortgage.
In fact, they will retain title to their home and cannot be forced to leave as long as they pay their property taxes and insurance, and maintain their home. - The loan amount will depend on the applicants age, available home equity, appraised value, area in which they reside and current interest rates.
- As part of the application process, the senior must speak with an independent HUD approved counselor who will make sure they are aware of all the intricacies of a Reverse Mortgage.
They have the option to see a counselor in person, or speak with them on the phone. - Although the proceeds are tax-free, it is still advisable that the senior consult a financial advisor before moving forward to ensure that the Reverse Mortgage will not affect medical or other public assisted benefits.
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