|
Reverse Mortgage Providing Peace Of Mind Without Sacrificing Safety Or Security
By: Barry Scoles
For many seniors one of their greatest sources of security is their home. It not
only provides a comfortable and familiar environment, but it provides a sense of
independence and a source of many fond memories. The equity in that home
represents a financial nest egg and a legacy for them to pass on to their
family. With the ever-increasing cost of maintaining a home, along with the
overall rise in the cost of healthcare, finding the resources to live out ones
life at home is becoming a growing challenge.
What is a Reverse Mortgage? A reverse mortgage, also known as a Home Equity
Conversion Mortgage (HECM), is a government insured loan program that allows
senior homeowners, age 62 and older, to convert the equity in their home into
usable cash. Unlike a conventional mortgage however, qualification is not based
on credit, employment, income, or assets, and there are no monthly payments. The
homeowner never forfeits title, and as long as they pay the property taxes and
homeowners insurance, no repayment is required until the senior no longer
occupies the home due to their sale of the property or their passing.
Are Reverse Mortgages Safe? Absolutely! Reverse Mortgages are FHA insured or
backed by Fannie Mae. And as long as you continue to live in the house as your
primary residence, keep the real-estate taxes and insurance(s) current, and
comply with the terms of the loan, you do not have to repay the loan.
For an increasing number of seniors, age 62 or older, a reverse mortgage has
provided great peace of mind. They are provided the tax-free cash to meet these
financial demands without giving up title to their home. They have no monthly
payment or deadline as to when they must move or pay off the loan. Although the
program is viewed by seniors as a possible solution to there financial needs,
they are concerned about putting themselves, their home or their family at risk.
Following are a few of the safeguards that HUD and Fannie Mae have provided:
1. Loan amounts, interest rates, and loan terms are set by HUD and Fannie Mae
and can never vary from one lender to another.
2. HUD and Fannie Mae have established what fees can be charged and has set caps
on them all.
3. All programs have lifetime interest rate caps
4. The term of the loan is 150 years beyond the birth date of the youngest
homeowner (i.e. date of birth April 1940, loan expiration April 2090)
5. If a spouse passes, none of the terms of the loan change, and the remaining
spouse may stay in the home for as long as they wish
6. If you are receiving monthly draws from your reverse mortgage, and your check
is late for any reason, the lender is required by federal statute to pay the
homeowner a 10% late fee.
7. Funds from a reverse mortgage are not considered income and therefore are not
taxable and have no affect on ones Social Security or Medicare
8. If a homeowner’s health required extended hospitalization or assisted living
care outside the home, as long as the homeowner returns to their home within 12
months there is no interruption in the loan
9. Lenders are not permitted to take any steps in processing a reverse mortgage
for any homeowner until the senior has received independent counseling from a
certified reverse mortgage counselor.
10. Following the closing of the reverse mortgage the homeowner has a three-day
period to reconsider the loan and cancel the transaction without any cost or
obligation.
Reverse mortgages provide a safe secure solution for seniors to live out their
life in the comfort of their own home with the dignity they deserve.
About the Author:
Barry Scoles, has extensive experience in the mortgage industry. He is
considered one of the leading experts on Reverse Mortgages. This article is for
general education purposes. For more information contact Barry Scoles, 1st
Reverse Mortgage USA at 877-217-0166 or bscoles@1streversemortgageusa.com
|
