| Reverse mortgages have increased in popularity in | | | | regular monthly payment. |
| the past few years. Economist report that due to | | | | You Still Live in Your Home: Most seniors do not |
| the increase in housing cost, the amount of | | | | want to change dwellings at this point in their lives, |
| money people are saving in their 401(k) and | | | | hence the main reason for a reverse mortgage. |
| savings accounts have been decreasing. | | | | You will stay in your home while drawing monthly |
| Due to the recent boom in the real estate | | | | income against the equity. In fact it is a |
| market more and more seniors are looking to | | | | requirement that you retain this home as your |
| cash in on their home equity. People are finding | | | | principal residence. You can still have the lake |
| themselves equity rich and cash poor. It is not | | | | home or the vacation home, you just need to |
| unusual to find people living in million dollar homes | | | | maintain this residence as your primary home. |
| yet they are below or near poverty level in | | | | You Retain 100% Ownership Of Your Home: You |
| monthly income. | | | | will keep all the rights of ownership which you had |
| Fortunately reverse mortgages are available for | | | | prior to the reverse mortgage. This is still your |
| this specific reason. Before you proceed with a | | | | home and you can do anything to it or with it |
| reverse mortgage do your research and make | | | | that you normally would. It can be remodeled, |
| sure it is exactly what you want to do. | | | | sold, or will it to your children. |
| The FHA and the Department of Housing and | | | | However, should you sell your home or die, you |
| Urban Development have taken over the | | | | will have to pay back the bank the amount of |
| responsibility of administrating reverse mortgages. | | | | payments you have received, plus interest, |
| One of their first changes, was to regulate and | | | | before the balance can be distributed to you or |
| control the interest rates which lenders can | | | | your surviving spouse or the estate. |
| charge for the reverse mortgages. All reverse | | | | Your Principal Amount Increases With Each |
| mortgage lenders within the United States will | | | | Payment Received: This is still a mortgage and the |
| have the exact same interest rates. When | | | | amount you receive must be paid back. This is |
| choosing a lender do not concern yourself with | | | | usually done when your heirs sell your home after |
| comparing interest rates. | | | | you and your spouse no longer live there. After |
| Reverse mortgage interest rates are adjustable | | | | you pass away the monthly payments will stop, |
| rates which are tied to very conservative | | | | however the principal amount and the maturity |
| indexes, usually the 1 year treasury bond rate or | | | | date of the loan can not be determined until the |
| the LIBOR index. The rates very moderately and | | | | actual day the loan is paid back. |
| usually will not have much effect on your | | | | You Can Never Owe More Than The Value of |
| mortgage. | | | | Your Home: If you choose a reverse mortgage |
| A reverse mortgage is still a home mortgage | | | | backed by the Federal Programs, you can never |
| utilizing the equity in your home as collateral. It is | | | | borrow more than the value of your home. You |
| totally different mortgage compared to the | | | | will never be forced to liquidate other assets to |
| mortgage you had when you initially purchased | | | | repay the loan. |
| your home. Here are a few facts about reverse | | | | Summary |
| mortgages. | | | | If you have equity in your home and you are |
| The Bank Pays You Each Month: Yes, that's right, | | | | beyond the age of 62, you can receive a reverse |
| you will receive a monthly payment with a | | | | mortgage which will provide you the additional |
| reverse mortgage. There are basically three | | | | monthly income needed to supplement your |
| options to receiving your payments. You can | | | | retirement income. You will still own your home |
| receive a one time lump sum, you can receive | | | | and continue to live there as you do now and |
| payments at amounts and times you request, | | | | your obligations to the lender will be satisfied by |
| and most common meathod is to receive a | | | | the equity in your home. |