One of the qualifications for a Home Equity Conversion Mortgage (HECM) (the most common type of reverse mortgage in the U.S.) is that the borrower(s) live in the home as their primary residence for the life of the reverse mortgage loan. It is clear then, that seniors cannot carry a reverse mortgage on rental property they do not occupy, but what does this mean for borrowers who wish to take extended vacations, live part of the year in a second home, or have to go to the hospital for an extended period of time or move to a retirement home? There are no hard and fast rules under all circumstances, but there are some general guidelines seniors can follow. (more…)

One of the qualifications for a Home Equity Conversion Mortgage (HECM) (the most common type of reverse mortgage in the U.S.) is that the borrower(s) live in the home as their primary residence for the life of the reverse mortgage loan. It is clear then, that seniors cannot carry a reverse mortgage on rental property they do not occupy, but what does this mean for borrowers who wish to take extended vacations, live part of the year in a second home, or have to go to the hospital for an extended period of time or move to a retirement home? There are no hard and fast rules under all circumstances, but there are some general guidelines seniors can follow. (more…)

When taking out conventional (or Forward) home loans, people generally view fixed interest rates as being safer than adjustable rates because fixed rates provide certainty. However, in the world of reverse mortgages, the considerations are different and adjustable and fixed rate plans each have their pros and cons. Unlike with conventional adjustable rate home loans where borrowers worry about the potential for increases in their monthly payment obligations, reverse mortgage borrowers do not make monthly payments so they do not have this same concern.

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When taking out conventional (or Forward) home loans, people generally view fixed interest rates as being safer than adjustable rates because fixed rates provide certainty. However, in the world of reverse mortgages, the considerations are different and adjustable and fixed rate plans each have their pros and cons. Unlike with conventional adjustable rate home loans where borrowers worry about the potential for increases in their monthly payment obligations, reverse mortgage borrowers do not make monthly payments so they do not have this same concern.

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One of the biggest criticisms of reverse mortgages is that they are difficult to understand, including for some seniors who make up the pool of eligible recipients of such loans. However, reverse mortgages can be great financial tools for seniors desperately in need of income whose only assets are the equity in their homes. The best thing such seniors can do to take advantage of the reverse mortgage option while avoiding having a negative experience down the road is to learn how such loans work. Beyond that, here are a few additional tips. (more…)

One of the biggest criticisms of reverse mortgages is that they are difficult to understand, including for some seniors who make up the pool of eligible recipients of such loans. However, reverse mortgages can be great financial tools for seniors desperately in need of income whose only assets are the equity in their homes. The best thing such seniors can do to take advantage of the reverse mortgage option while avoiding having a negative experience down the road is to learn how such loans work. Beyond that, here are a few additional tips. (more…)

By AMY HOAK

Upfront fees on reverse mortgages have fallen substantially in recent months, giving homeowners interested in this product a new challenge: how to compare offers to find the best one.

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By AMY HOAK

Upfront fees on reverse mortgages have fallen substantially in recent months, giving homeowners interested in this product a new challenge: how to compare offers to find the best one.

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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 value of the home, according to the Federal Trade Commission, or FTC.
• Loan advances are generally not taxable.
• Most loans do not have income requirements.
• Homeowner retains title to home.
• No payments are due until last surviving borrower dies, sells home or no longer lives in home as primary residence.
• HECM programs allow borrower to live in nursing home or other medical facility for up to 12 months before loan becomes due.
• After the home is sold and the loan and fees are paid to the lender, any remaining equity in the home belongs to you or your heirs.

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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 value of the home, according to the Federal Trade Commission, or FTC.
• Loan advances are generally not taxable.
• Most loans do not have income requirements.
• Homeowner retains title to home.
• No payments are due until last surviving borrower dies, sells home or no longer lives in home as primary residence.
• HECM programs allow borrower to live in nursing home or other medical facility for up to 12 months before loan becomes due.
• After the home is sold and the loan and fees are paid to the lender, any remaining equity in the home belongs to you or your heirs.

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