TAMPA, FL - Senior homeowners across the nation are now turning to a new source for cash income - their home. From paying for home repairs, home health care or medical expenses to paying off an existing mortgage or credit card debt, Reverse Mortgages are providing the means for seniors to move forward in life.
With a Reverse Mortgage, homeowners at least 62 years in age are now able to capitalize on the equity built up in their homes. Unlike traditional home equity loans, a Reverse Mortgage does not have to be repaid until the borrower(s) no longer lives in the home as their primary residence.
I feel that the Reverse Mortgage is allowing seniors to tap into a cash course previously unrealized, which helps them pay for any type of financial need. Most seniors have no idea what a wonderful retirement investment they have in their home.
The amount of money available to the borrower is typically determined by the value of their home, current interest rates, and the age of the borrower(s). The older the borrower, the more money they will be able to receive. Proceeds from the loan can be received in several ways: a lump sum payment, equal monthly payments, establish a line of credit, or a combination of these three options. Based on the homeowner's specific needs, the borrower has the luxury of selecting how they will receive the funds. The most popular form of disbursement is the line of credit option. Under the Reverse Mortgage program, the unused funds in the line of credit actually increase over time via an annual growth rate.
Some seniors still question if reverse mortgages are safe. However, numerous consumer safeguards are built in the program. The homeowner always maintains ownership of the home, and their name remains on the title.
Reverse mortgages are also non-recourse loans, which means there is no personal liability for the mortgage. Neither the borrower nor the heirs can ever owe more than the value of the property when the loan becomes due. No assets other than the home will be used to repay the loan, and any equity remaining after repayment belongs to the borrower or their heirs.
According to statistics collected by the industry, more than 150,000 reverse mortgage loans have been originated to date with current fundings approaching 50,000 per year.
Currently, there are three reverse mortgage programs available: the FHA-Insured Home Equity Conversion Mortgage, or "HECM", the Fannie Mae Home Keeper product, and jumbo reverse mortgages available from a private investor and offered by AmeriFirst Home Mortgage.
For additional information on reverse mortgage products and benefits, I have created a consumer awareness hotline for consumers to listen to a free recorded message, anytime 24-hours a day, (888) 226-0523 ext. 1
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