What recession? Is the main question many mature Americans are asking after using their primary home for the reverse mortgage, also known as a Home Equity Conversion Mortgage, program. The reverse mortgage program offers mature Americans, 62 and older to use their current home’s equitable value as a line of credit, lump sum payment or monthly payments, to supplement their current financial situation.
Many mature Americans have used their reverse mortgage to pay off debt, pay costly bills, get back on track with their finances, have extra savings; the possibilities for financial independence are endless. The program requirements are simple. First you as a borrower must speak directly with a Housing and Urban Development, HUD, approved HECM counselor. Once you have completed a short assessment determining your understanding of the reverse mortgage requirements, financial capibilities, possible additional income alternatives, and your repayment plan you should find a lender you are comfortable. Brokers are no longer permitted to issue reverse mortgages, so locate a reverse mortgage private or public loan specialist. You should be aware that your home will be assessed for its current value, in order to determine the loan amount you are eligible to receive from your lender. You will be made aware of the rate programs available to you, the cost of repayment once your loan matures, the payment options you have to consider, lump sum, monthly or line of credit. At closing, you will have to pay all outstanding debt, which you lender will address with you, and pay the closings and origination costs associated with the loan. Finally, make plans with your money.
Government backed lenders such as Fannie Mae and Ginnie Mae have both reported reverse mortgage loans are significantly increasing as fees for loans have been lowered and the recession is putting more and more mature Americans in a financial crunch. Both entities reports over 112,000 loans being approved in the fiscal year ending for 2008. This year alone there are more than 69,000 approved loans for the current 2009 fiscal year month of April. This is wonderful news for you. The market is stable, growing and secure. HUD and FHA have approved an increase in lending limits up to $625,500 for your primary residence, but this is contingent upon the current market value of your home. The driving factor for the increase in the reverse mortgage market are several factors including a plunging retirement savings plan, such as Social Security benefits, IRA, stock market and 401K programs. This plunge has tapped into mature Americans future independence and stability. A lack of extended credit from lenders, is adding to the rise in loan applications in the reverse mortgage market. The credit crunch has caused for lenders to tighten up on their former relaxed standards to lending for the housing market as a whole. Fortunately, your reverse mortgage application process does not include your credit score, just the current value of your home.
Tags: reverse mortgage helping senior citizens, senior equity reverse mortgage, senior reverse mortgage services, seniors home reverse mortgage
