What's New with Reverse Mortgages

Seniors have been hearing lots lately about reverse mortgages. You may even have seen an ad featuring celebrated actor James Garner speaking on behalf of Financial Freedom, a reverse mortgage lender.

Simply, reverse mortgages allow seniors to tap into their home equity and not pay anything back until they either sell the house or are no longer living in it as a full-time resident.

Depending on where interest rates are and how old you are, you may be able to borrow up to 70 percent of your equity. You can receive your funds as either a lump sum or a monthly annuity, or you can, in some cases, open up your reverse mortgage as a home equity line of credit and draw down funds as you need them. All of this sounds great, but reverse mortgages have come under fire recently because of confusing disclosure statements and high fees.

In August, the Federal Reserve Board proposed enhanced consumer protections and disclosures for home mortgage transactions, including reverse mortgages. To read more about what the proposal would mean for seniors, as well as clarifications on some misconceptions about reverse mortgages, read the full article on my Equifax personal finance blog: http://real-estate.equifax.com/2010/10/reverse-mortgages-whats-new.html