Good Day Readers!
I’ve not posted content lately as it seems I’m not as fast as other, more proficient internet users in publishing industry news and information. For those of us that didn’t grow up with a cell phone in our hand the habit of social networking seems to be an activity that must be scheduled as a priority as opposed to a daily habit. In this age of information overload I find redundancy common so consequently I try to limit contribution to the problem.
Today I’m compelled to provide what I hope to be helpful information regarding the Reverse Mortgage program. True, this is a loan program and yes, I’m a lender engaged in the business of providing real estate financing. What is not common is the investment of personal drive and satisfaction involved when helping my senior clients. That is not to say clients purchasing and refinancing homes are not a priority as they most certainly are. But beyond the common real estate transaction, I’ve developed a particular passion to help people enjoy life and dismiss unplanned challenges that otherwise could be devastating.
The Reverse Mortgage program has been utilized for many reasons ranging from a simple increase in monthly cash flow allowing more freedom during retirement years to avoiding foreclosure and loss of a home full of family memories. I find many homeowners are hesitant to consider a Reverse Mortgage due to abundant misconceptions that in some cases result in someone not seeking much needed help. So what’s the truth? Let’s look at a few of these questions:
1. “The bank will take my home” or “I will loose my home”
FACT: With a Reverse Mortgage, the borrower retains title to the home throughout the life of the Reverse Mortgage. As long as taxed and insurance is kept current the borrower cannot be forced out of the home.
2. “My home must be debt free to qualify for a Reverse Mortgage”
FACT: If there is currently a lien on the property, the proceeds of the Reverse Mortgage will pay-off the existing lien as the Reverse Mortgage can be the only lien on the property. The homeowner can use the remaining funds as they wish!
3. “The bank sells the home when the Reverse Mortgage becomes due”
FACT: The borrower is in control of the home, not the bank or lender. The Reverse Mortgage is due once the homeowner no longer occupies the home as their primary residence but it’s the decision of the borrower and or their heirs as to how to replay the loan. It’s common for the home to be sold to satisfy a Reverse Mortgage but in many cases the heirs refinance the property to retain the family home.
4. “My children won’t be comfortable with me obtaining a Reverse Mortgage”
FACT: Seniors are encouraged to talk with their children about Reverse Mortgages. Often, the children of many seniors are happy that their parents have a financial solution available to help them live more independently and financially secure.
5. “The borrower could end up owing more than the house is worth”
FACT: Two of the great built-in safeguards of the Reverse Mortgage are that they are structured so that the borrower cans NEVER OWE MORE THAN FAIR MARKET VALUE OF THE HOME at time of repayment. In addition, the Home Equity Conversion Mortgage (HECM) product is insured by the Federal Housing Administration (FHA), an arm of the U.S. Department of Housing and Urban Development (HUD).
6. “Reverse Mortgage proceeds will impact Social Security and Medicare benefits”
FACT: A Reverse Mortgage will generally not affect regular Social Security payments or Medicare benefits. It is always recommended that a borrower speak with their financial advisor and appropriate government agencies.
7. “There are restrictions on how the money is used and taxes will have to be paid on the funds I receive”
FACT: There are NO restrictions. The proceeds from a Reverse Mortgage can be used for absolutely any purpose and since it’s already your money, it’s tax-free! My senior clients have used Reverse Mortgages to travel, pay-off debt, help their kids, live more comfortably or save the family home from foreclosure when unable to make the current mortgage payment.
8. “Reverse Mortgages are only for seniors in need, or for the ‘house rich, cash poor’”
FACT: Reverse Mortgages are an excellent financial planning tool that has been used by homeowners from many walks of life to enhance their retirement years. In fact, with the new 2009 lending limit of $650,000.00, many seniors are benefiting from increased cash benefit from a Reverse Mortgage.
While these are just a few of the FAQ’s received, I believe this knowledge will be very helpful to seniors and families considering a Reverse Mortgage. I’m happy to speak with anyone interested in additional details anytime.
As we approach the Thanksgiving holiday I have a final thought before I close regarding “Black Friday” shopping. Last year I participated in this sacred annual ritual for the first time in my life. As I entered the doors of a large national retailer I was saddened and appalled at the behavior and actions of other shoppers. I was immediately reminded of the first time I navigated my way through an airport in a third world country and how shocked I was at the experience. Keep in mind this was the same day a man shopping at the same retailer in a different state lost his life, a story that was broadcast on the national news. We have much to be thankful for, not the least of which is a civil country to call our home. For those participating in the mad rush, please remember to be kind and respectful to your fellow shoppers. By the way, the product I wanted to purchase was sold-out by the time I pushed my way to the back of the store. When I returned home my beautiful wife supplied me with a cup of coffee and kind words of support. After calming down I decided to take my chances online. In the end I found a better deal on the same product with free shipping…………all from the comfort of my recliner!
Best wishes to you and your family for a happy Thanksgiving and a very merry Christmas!
