Article by Juhani Tontti
Have you also pondered whether there are differences or benefits between the times, when you will take the reverse mortgage loan? Its a good question, but have you really thought, what will determine the timing?
The reverse mortgages are not the easiest financial products to fully understand. Therefore a senior makes it wise, if he or she just define his own financial needs and let the professionals to guide him to make them happen. The Government has developed a counselor system, which offers professional reverse mortgage counselor guidance to American seniors.
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Okay, we know that the property values are about to crash, due to the banks’ risky bets on Option Arm and Alt A mortgages. If you have a loan, based on the value, right now, then the property values crash, then the banks have to eat the cost!!! Isn’t that great?
The Option Arm and Alt A Market Crash, has NOT happened yet!!! Can you still rent a house out, while drawing a reverse mortgage on it???
While the ‘New Congress’ puts a full court press on the first 100 hours of control, almost three weeks have been spent on a “non-binding” resolution loaded with political positioning and posturing for future replays. High fives all around for that. The minimum wage plan has not passed after much conversation and no action. If this implosion continues in both houses nothing will be accomplished. Election run up time in a lame duck presidency gives cause for Congressmen and Senators to show up in roller blade gear. With helmets, elbow pads, kneepads and thick gloves all around in full dress in preparation for all the sharp elbows and cross body blocks to fight for positions that are nearest to TV cameras for the evening news cycle. This gives the appearance of a lot of motion but in the end no real action. Lip service abounds. With moistened fingers heisted in the prevailing winds to gage the most recent polls, positions change like a fresh pair of socks while the public remains not amused. When Congressmen and Senators job performances are rated below ambulance chasers, something is afoot. The old bromide of “reaching across the aisle” again has proven to be a joke. Once again the minority in the Senate can bring things to a slow grind. Still looking for some forward thinking leadership. How long has it been since the last one?
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I understand that if the holder no longer lives in the home for a year the loan becomes due also.
When old age pensioners consider borrowing on home equity as a part of their retirement financial planning they have options. As well as more classic home equity loans or home equity credit lines, reverse mortgages are available as loans for seniors. But, the difference is, the standard mortgages are paid off monthly so that the seniors home equity begins to grow again.
With a reverse mortgage, once taken against the equity in the home, no payments need be made during the lifetime of the homeowner’s, and the balance on the mortgage grows as interest is added to the balance each month. Essentially , seniors can turn their home equity into cash by taking either a pile sump, by taking monthly checks to enhance their revenue, or by creating a credit line from which money might be drawn as needed or desired. But, in each case, the balance of the mortgage will grow monthly, abating the equity in the home.
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As industry professionals, we often have an opportunity to sit in on conference calls on market trends and other things that affect reverse mortgages and the senior borrowers who get them. We were on one today that echoed something that we have been saying so it seems that it’s to a point where we should pass this information on to everyone.
Reverse Mortgages have gained in popularity but it seems that there has been an increasing amount of negative press lately and many senior borrowers have become hesitant to consider this financing tool available to borrowers age 62 and older. Is a Reverse Mortgage a safe loan and is now a good time to get one? Those are two questions we hear all the time and we say ABSOLUTELY to both!
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Product Description
This digital document is an article from Mortgage Banking, published by Mortgage Bankers Association of America on November 1, 2008. The length of the article is 1120 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.
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