What better day to talk about obtaining your financial independence than on Independence Day?! I don’t think our forefathers ever considered the right to a reverse mortgage when framing the Bill of Rights and our Constitution, but ever since 1988 when Ronald Reagan signed the bill authorizing the Department of Housing and Urban Development (HUD) to insure Reverse Mortgages through the Federal Housing Authority (FHA), hundreds of thousands of senior homeowners age 62 and over have gained their financial independence.
Many senior homeowners feel like they’ve lost their independence to the high cost of living on a fixed income. Even those who planned carefully are finding that the pension and savings they thought would carry them through their retirement years just didn’t do all they thought they would, the social security benefits didn’t keep pace with the cost of living increases, the decrease of income due to the loss of a spouse or any number of other circumstances has made them dependent on others or they have been watching their savings dwindle. Some have been lured into risky loan products such as negatively amortizing adjustable rate mortgages at the promise of low initial payments only to find that they could not afford those payments as they went up later, risking their homes to foreclosure. For these senior homeowners, reverse mortgages may be their path to financial independence.
A Reverse Mortgage helps the homeowner age 62 and over access the equity in their home by taking that equity, tax free, to use in any manner they so choose. If there is currently a mortgage on the property that is a struggle for the borrower, if the borrower qualifies for enough money, the reverse mortgage would pay off that debt and the borrower would never make another mortgage payment for as long as he/she lived in the home. In many instances, we see borrowers qualifying for enough money to pay off existing liens plus either receive a monthly payment for the rest of their life, get money for any purpose they choose (repair their home, medical needs, travel, payoff other debts to ease their cash flow, help educational needs of family or any other purpose the borrower chooses) or even a combination of these options. The Reverse Mortgage gives borrowers the independence to live in dignity and in place, in the home they love, without the strain and hardship of a mortgage payment.
If you or a loved one, age 62 or over are a homeowner who is currently struggling to make ends meet each month, are spending what should be the best years of your life a prisoner in your own home because you feel like you just don’t have any breathing room or you or a loved one are in a mortgage that is delinquent or in danger of becoming delinquent because the costs of living have just risen too much for your income, then you owe it to yourself or that loved one to make this July 4th a real Independence Day and check out the possibility of a Reverse Mortgage and how it can bring financial independence into the lives of our most cherished citizens.
Michael G. Branson is a Mortgage Broker who has over 31 years of mortgage banking experience.