Reverse mortgages are a way for seniors aged 62 and above to take cash out of their house. The equity the senior has built up over the years can be used beneficially to aid in their retirement. Here are some thoughts and ramblings about reverse mortgages that you may find helpful.
Seniors can choose to take the cash from a reverse mortgage as a lump sum, in a line of credit or in monthly payments. If
they choose a lump sum, for example, Forer said that they could pay to retrofit their home to make kitchens and bathrooms
safer and more accessible? Especially important to those who are becoming frail and in danger of falling. As one grows older
all the appliances etc. can be fitted differently to help in everyday functioning. Seniors, in a very personal way, know that
staying in their home, close to their memories and in a familiar neighborhood, can be very important factor in enjoying
retirement. Securing a Reverse Mortgage enables a senior to do that, and many companies are designed specifically to assist
seniors with reverse mortgage needs. Senior home ownership and life expectancy rates are climbing steadily and therefore more
seniors are qualifying for reverse mortgages. Accordingly, now is the ideal time to establish consumer protections so that as
the reverse mortgage industry grows, current pitfalls and hazards for consumers do not expand as well. The national reverse
mortgage lenders association does that.
When deciding what options to pursue with a reverse mortgage make sure you check the NRMLA site which forbids fraudulent
activities. Here is a direct quote from them “National Reverse Mortgage Lenders Association (NRMLA) is the national voice of
the reverse mortgage industry, serving as an educational resource, policy advocate and public affairs center for lenders and
related professionals. NRMLA was established in 1997 to enhance the professionalism of the reverse mortgage business. Our
mission is to educate consumers about the pros and cons of reverse mortgages, to train lenders to be sensitive to clients’
needs, to enforce our Code of Conduct and Best Practices, and to promote reverse mortgages in the news media.”
Seniors actively considering a reverse mortgage could certainly find value in comparing their personal expectations with the
experiences of actual borrowers. Most HECM (Home Equity Conversion Mortgage) borrowers are estimating their future ability
(or desire) to “age in place”. No one knows exactly how long you will be able to stay in your house but it is better to be
prepared for a lengthy stay. Seniors who live on a fixed income may be concerned that their retirement savings and Social
Security income may not be enough to keep up with the rate of inflation. Catastrophes and other unexpected events create
unexpected expenses that weren’t saved for. It is for these reasons that a reverse mortgage might be beneficial. Seniors are
encouraged to talk with their children about reverse mortgages and why it might be the best course of action. The reverse
mortgage has an immediate impact on many children by easing any financial burdens of helping their parents.
Carefully review the reverse mortgage to determine the type of compensation the homeowner is to receive, frequency, schedule
of receipt, amounts, etc. If the money from the mortgage establishes a line of credit, consider the entire amount of the line
of credit as a countable resource effective the month the line of credit becomes available. Carefully weigh the pros and cons
of all cash flow options. Folks in early retirement should remember that the younger they are, the less money they are
eligible to receive because of the life expectancy factor in the loan payment formula. If you wait till later in retirement
your benefits will go up because they don’t expect to pay them as long. The disadvantage of waiting is the benefits could
change because the value of the house could be less and a senior may not qualify for as much based on the equity.
When deciding make sure you talk with a counselor as early in the process as possible. They are non partial and can answer any questions you may have about a reverse mortgage. It is mandatory so why not take advantage of this formality to make sure this is the best option for you. If there are lender specific questions feel free to call me 414-531-4035 and ask for David. You may also go to David’s website for more information at http://wisconsinreversemortgages.net/