SHOULD YOU CONSIDER A REVERSE MORTGAGE?
Many home owners are not familiar with one of the very active sectors of the mortgage market, Reverse Mortgages. The volume of these government backed loans is breaking monthly records.
One of the major reasons for the recent surge is that many senior home owners have suffered losses in their retirement investments and the subsequent reduction in investment income that is needed to maintain their living standards. At the same time, more seniors qualify for these loans because Congress raised the maximum mortgage loan amount from $417,000 to $625,500. Congress also capped the fees that can be charged for this loan product.
A Reverse Mortgage may be used to refinance the current primary residence or to finance a newly acquired primary residence. To qualify, the borrower must be at least 62 years old and have a lot of equity in the home. The borrower receives monthly payments rather than making monthly mortgage payments. The home owner has additional options to receive a lump sum payment or the use of a line of credit. There are no restrictions on the use of the income. The mortgage loan, including interest, is repaid upon the death of the borrower or if the property is no longer occupied as the primary residence.
This loan option is not for everyone. However, if you have a lot of equity and an inadequate income, a Reverse Mortgage can be a lifeline and assure independent living. As real estate agents, we like the option that our clients may use a Reverse Mortgage to purchase a more suitable primary residence. Many seniors live in homes that have stairs that may prove to be difficult with aging. Many older homes have high utility costs and are expensive to maintain. Many seniors can actually upgrade to much nicer homes with Reverse Mortgages. There are no income or credit requirements. The new loan is based on the equity in the current residence.
If you are interested in a Reverse Mortgage, ask for a referral to a lender that offers these loans. We represent home buyer clients as their exclusive agents in the Maryland surburbs of Washington DC and nearby counties. firstname.lastname@example.org