Check out Reverse Mortgages for Seniors

Reverse mortgages have been all over the news in recent months. Though not an ideal option for everyone, with increasing numbers of seniors needing a dependable source of income – especially given the status of the economy – reverse mortgages can be effectively used to solve many problems faced by people today. There are several types, with different goals – one to get you cash based on the equity in your home, one with flexible credit lines, and even one to help finance the purchase of a new primary residence (try out this reverse mortgage for purchase calculator).

Reverse mortgages currently allow more than half a million senior (sixty-two or older) homeowners to access a portion of the equity that has been built up in their home. This money is tax-free and allows you to get money, similar to how a loan would, without the need to make monthly payments. Gaining access to this can allow people concerned about their financial future to gain certainty and stability that might otherwise be unattainable.

It’s worth taking a look to see how much you can save. One of this site’s sponsors has provided a free reverse loan mortgage calculator which you can use to see how you can benefit from this program!

The reverse mortgage has several advantages over other cash-generating options. It is a legal construct of the federal government; the oldest of these national programs was signed into law in 1988 in the form of the Home Equity Conversion Mortgage (HECM – and here’s an HECM saver calculator). Unlike some things that should virtually never be touched – payday loans, credit card advances, and such – reverse mortgages are backed by the government in the form of the Federal Housing Administration (FHA), which is a part of the Department of Housing and Urban Development (HUD). Because of this, not just anyone is eligible to participate in the reverse mortgage program. To qualify, homeowners must meet several requirements:

• You must be at least 62 years old,
• The home must be your primary residence, and a single family, one- to four-unit owner-occupied, townhouse, condominium, or manufactured home-type property,
• Have a sufficient amount of equity in your home,
• Have the ability to pay any existing mortgage on the home,
• You must continue to maintain the home and pay property taxes and homeowners insurance (just as you would with a mortgage), and
• You must attend a HUD-approved counseling session

If you meet these requirements, it may be beneficial to take a look and to see what’s out there. The vast majority of reverse mortgages are of this HECM variety. Users will have the option to take out the funding as a line of credit to draw against, a lump sum, or a monthly payment – different people will have different needs, so there is a lot of flexibility in these mortgages. If your home is particularly valuable (over $500,000) you may be able to take part in the Private Cash account reverse mortgage, which offers even more exciting options! There are many places, types, and options available for those interested in the reverse mortgage and similar products – do some exploring, a little research, and you never know what you may find!