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Reverse Mortgages Pros and Cons

admin — Thu, 24 Jun 2010 18:28:29 +0000

Read about Reverse Mortgages pros and cons, and check out the resources provided below.

The upsides of reverse mortgages
• You can choose how to receive the money: fixed monthly payment, lump sum, line of credit or some combination of these options.
• Income from reverse mortgage generally does not affect Social Security or Medicare benefits.
• If you “outlive the loan,” meaning you receive more in payments than your home is worth, you will never owe more than the … [....Read More]

For seniors, reverse borrowing can be a financial step forward

admin — Wed, 26 Nov 2008 08:50:51 +0000

By Paula Woessner

Used with permission. This article appeared in Issue 1, 2004, of Community Dividend, a publication of the Federal Reserve Bank of Minneapolis.”

In the not-too-distant past, senior homeowners who found themselves house rich and cash poor had limited options for improving their financial circumstances: take out a second mortgage, at sometimes costly rates, or sell the house. More and more, seniors are becoming aware of another choice. Reverse mortgages are designed to supply an income stream while … [....Read More]

Reverse Mortgage Example #2

admin — Wed, 26 Nov 2008 08:49:20 +0000

Brenda, age 65, was absolutely sick of working.She had toyed with the idea of quitting for years, but decided she simply could not afford to live off social security and her small retirement account.The IRA and savings would be drained in less than a year without income.She was a secretary for an oil drilling company executive.Her boss was not a terrible boss, as bosses go.But he was certainly a boss, and Brenda wanted to be free of someone to answer … [....Read More]

Reverse Mortgage Example #1

admin — Wed, 26 Nov 2008 08:48:34 +0000

Helen, in late 2003, was about two years removed from losing her husband Edward. She had not handled the family finances and was overwhelmed when faced with dealing with bills, monthly income, mortgage payments, and savings. There was only about $8,000 in savings at the time of Ed’s death. Furthermore, Helen’s monthly income was about $1,600 and the mortgage payment remaining on the home was just under $800 per month.

Finances were, needless to say, tight. Her only son lived … [....Read More]

HECM Reverse Mortgage Statistics

admin — Wed, 26 Nov 2008 08:47:23 +0000

The following is a list of each year and the corresponding HECM reverse mortgages for that year. The HECM or home equity conversion mortgage makes up about 90% of all reverse mortgages issued. HECM reverse mortgages are insured by the federal government through the Federal Housing Administration (FHA).

FY 2009 114,692
FY 2008 112,154
FY 2007 107,558
FY 2006 76,351

FY 2005 43,131
FY 2004 37,829
FY 2003 18,097
FY 2002 13,049
FY 2001 7,781
FY 2000 6,640
FY 1999 … [....Read More]

Reverse Mortgages and the Softening Housing Market

admin — Wed, 26 Nov 2008 08:46:44 +0000

One question we have been asked is:
What happens to reverse mortgages as the United States housing market weakens.It is a good question.
There is no question the United States housing market is softening. Although prices may not yet be going down, and some markets remain relatively strong, as a whole the robust gains in real estate value across the country is over. Maybe not forever, but certainly for now.

Recently, new housing starts were down 20% and the number … [....Read More]

How to Pay Off the Mortgage

admin — Wed, 26 Nov 2008 08:46:05 +0000

by Byron Warnken

There are many ways to pay off your existing mortgage.

Keep making payments until you’re old and broke.

Or worse yet, keep making payments when you are old and broke. Sounds like a gas, right? It’s not. It’s tough business. As we get older and the fixed income kicks in, it gets tough to continue to make the payments on the home. But it’s either make the payments, move out, or get creative. This brings up another … [....Read More]

Reverse Mortgage Facts

admin — Wed, 26 Nov 2008 08:45:27 +0000

by Byron Warnken

Many people believe that a reverse mortgage is a good way to obtain cash if you have your home paid off.This is absolutely true. However, a reverse mortgage is also an excellent way to pay off your existing mortgage. A reverse mortgage has the power to not only provide cash for uses such as home improvements, vacations, healthcare, taxes, and gifts, but it can, in fact, save you thousands of dollars a month by eliminating your current … [....Read More]

What if one spouse is under 62?

admin — Wed, 26 Nov 2008 08:42:20 +0000

The short answer is that this means a reverse mortgage is not available on the property. Both husband and wife must be 62 or over. This is only true, of course, if the property is titled in both names, typically called a joint tenancy when between a husband and wife.

With a reverse mortgage, the loan comes due at the death or permanent move of the person whose name is on the reverse mortgage. The reverse mortgage lender, at this … [....Read More]

Not Enough Equity For a Reverse Mortgage?

admin — Wed, 26 Nov 2008 08:41:42 +0000

Qualifying for a reverse mortgage is based on a number of factors. These factors include age, home value, amount owed on your home, and where you live. Ultimately, a reverse mortgage allows you to access equity in your home. If the equity is not there, a reverse mortgage is often not going to be an option.

One of the benefits of a reverse mortgage is also its downfall for those who do not have sufficient equity in their home. A … [....Read More]