A reverse mortgage is an often misunderstood instrument that can literally stop foreclosure. As the economy has derailed, more and more good people have been losing their homes. Unfortunately, many of these people have been seniors who have had a hard time finding alternate sources of income. Many of them worked their whole lives to pay off their homes and gain independence, but as the economy has spiraled out of control, health care costs have increased and many companies stopped hiring making it difficult for seniors to keep up with the cost of living.
Many times people believe they are better off with their home owned free and clear or a small mortgage because then they own their home. There are many problems with that theory. To name a few, there are still taxes owed on the property every year which have to be paid, simply missing property taxes on a home that is owed free and clear can result in foreclosure. In addition to that if a homeowner carries a small mortgage and falls behind on the payments, their banks are more likely to foreclose on those homes because their less likely to lose money on them.
Banks are out to profit and if they make a bad investment, their objective is to minimize their losses. Therefore, homeowners with lots of equity end up losing when facing financial hard times. For seniors, it is often more difficult to get by because jobs are harder to get which ads more fuel to the fire.
One way to for seniors to effectively change their lifestyle and stop foreclosure is through a reverse mortgage. The reverse mortgage biggest misconception people have is that they think they are going to lose their home. This is not true and often a common myth with reverse mortgages.
A reverse mortgage is a loan borrowed against your home's value that does not have to be repaid for as long as you live there and can be used as a tool for seniors to eliminate their mortgage while allowing them to live in their property for the rest of their life. Reverse mortgages were created in 1987 by the HUD a.k.a. (U.S. Department of Housing and Urban Development) as a way to enable homeowners aged 62 and over to access their home's equity without having to leave their home or make monthly mortgage payments. A reverse mortgage is similar to a standard home loan, but in reverse: instead of the borrower paying the lender monthly mortgage payments, the lender pays the borrower, which allows homeowners to turn their property's value into cash. The money is repaid to the lender only after the borrower permanently moves out of the home.
Many times, seniors can actually receive a monthly check from their lender to help them with living expenses. The proceeds from a reverse mortgage are tax free and do not effect Social Security benefits or Medicare.
Reverse mortgages are FHA insured so the home owner can never end up owing more on the home then what it’s worth. In the event of death or in the event that the home ceases to be the primary residence, the homeowner's estate can choose to convert the reverse mortgage into a traditional mortgage to keep the house or else sell the home to pay the balance (the cash borrowed, interest, and fees).
If the equity in the home is worth more than the balance of the loan, the remaining equity belongs to the heirs. No other assets are affected by a reverse mortgage.
So if someone you know is having a hard time making ends meet, a reverse mortgage is definitely an option to consider. Most seniors find that once they have the reverse in place, the stress of having to make the monthly payments disappears. Many enjoy receiving a check each month from their mortgage companies. Most importantly, a reverse mortgage can take away a lot of the financial frustrations seniors face and allow them to live a more peaceful and relaxed life.
If you would like to get more information on a reverse mortgage, please visit: www.mortgagerescuerelief.com or call us at 1-888-863-1717.
Comments(0)