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A Guide To Aging In Place
Learn How To Use A Reverse Mortgage To Buy A House
See the Top 10 Home Improvements for Seniors
Find Out What The 2008 COLA Increase Means To You
Just The FAQs: Answers to Common Questions About Reverse Mortgages
See the Top 10 Reasons Seniors Get Reverse Mortgages
See the Top 10 Myths About Reverse Mortgages
Learn About Using A Reverse Mortgage As An Estate Planning Tool
Learn About Reverse Mortgage Safeguards
Learn About Pros and Cons of Reverse Mortgages
Using Reverse Mortgages For Health Care
ABC 15: Valley Baby Boomers Use Reverse Mortgages For Independence
"The oldest baby boomers turn 62 this year, making them eligible for a reverse mortgage.
What is it? Basically, it allows homeowners to tap into their equity, without having to pay it back until their home is sold or they die.
Nancy Wozencraft doesn't worry about ever having to leave her Chandler home.
Her independence is made possible by the government-insured reverse mortgage she took out about two years ago.
"I can feel comfortable and happy about being able to take care of myself," she said..."
East Valley Tribune: What to Know About Reverse Mortgages
"At a time when most seniors should be enjoying a little time to themselves, many are facing an uncertain future filled with mounting medical costs, rising fuel bills, and shrinking pension checks.
One option to make life easier and eliminate at least one major expense is to do away with a monthly house payment. The good news is that there is a way to do this and still retain home ownership.
Through a reverse mortgage, homeowners borrow against the equity in their home, setting up disbursements in a variety of ways and deferring repayment until after they move from that home or die.
The mortgage amount available depends on the age of the homeowner, the equity built up in the home, and the current interest rate. The older the homeowner and the higher the appraised value of the home, the more money can be borrowed. In many cases homeowners can borrow as much as 50 percent of the value of the home, and unlike a traditional mortgage, there is no income requirement or credit check to worry about.
Reverse mortgage loans must first be used to pay off any existing mortgage balance, and then there are no restrictions on its use. Homeowners can use the loan for home improvements, medical expenses, and travel, or as a way to consolidate debt. Funds can be taken either in a lump sum, as a line of credit, as a monthly stipend or some combination.
A major advantage to reverse mortgages is that loan income typically does not affect other government benefits such as Social Security and Medicare, and it is also usually tax-exempt. As an added security most reverse mortgages are federally insured by the Federal Housing Administration (FHA), the Department of Housing and Urban Development (HUD) or Fannie Mae."
Arizona Daily Star: Finding Money At Home
"Tucson: Vince Olszewski was in something of a financial pickle: he owned his 45-year-old Southeast Side home free and clear but had no cash to make basic repairs.
The roof leaks. The water heater rattles. The doors need to be replaced.
"It will cost $20,000 in repairs to get it done properly," Olszewski said.
But with $660 from Social Security every month as his only source of income, Olszewski, 80, decided to take out a reverse mortgage, an option that an increasing number of seniors are exercising across the country.
With home values appreciating fast over the last few years, many seniors are finding themselves rich in home equity. This option allows them to pull out more equity than ever before and stay in their house, though some financial advisers warn it can be misused.
In a regular mortgage, a home buyer makes payments to a lender, paying down the debt and building equity. In a reverse mortgage, homeowners over age 62 receive cash from a lender in a lump sum, payments or line of credit. The increasing debt doesn't have to be paid back until after the homeowners die, move out or sell the home.
The amount that seniors can pull out is a function of the age of the homeowners, the value of the home and the interest rate..."
Wall Street Journal: Reverse Mortgages: The Choices Expand
"... The boom in reverse mortgages helped Ronald Prast, a 74-year-old Phoenix retiree. When he first applied two years ago, he was told by a loan officer that he wasn't a good candidate; government rules would have allowed him to cash out only a small portion of the value of his half-million-dollar home. But last November, when Bank of America Corp. introduced a reverse mortgage that allows homeowners to borrow as much as 65% of a property's value, up to $10 million, Mr. Prast and his wife, Carolann, quickly signed up.
The couple's house, for which they paid $105,000 in 1981, was appraised at $540,000, Mr. Prast says. They used an initial draw of $208,000 to pay off their outstanding mortgage, home-equity loan, one year's property tax and the loan fees, freeing up an extra $21,000 a year formerly used to make mortgage payments for travel and indulgences like paying for a granddaughter's semester in Australia. They also have a credit line worth $75,000 that they are setting aside for medical expenses.
"We were comfortably well off, and we wanted to release some of the funds we had tied up in our home," Mrs. Prast says..."
HUD: More than 300,000 Seniors Benefitting from Reverse Mortgages
WASHINGTON - More seniors than ever before are reaping the benefits of reverse mortgages to enjoy their golden years. New data from HUD reveals that more than 300,000 seniors have used the federally-insured Home Equity Conversion Mortgage (HECM) loan program to convert the equity in their home into cash without having to move.
"For some senior citizens on fixed incomes, reverse mortgages are a great way to cash in on their home equity to make needed repairs, pay unexpected medical bills or just to supplement their retirement. Seniors shouldn't have to choose between taking out a loan to fix up their home and putting food on the table. With a reverse mortgage, this difficult decision is a thing of the past," U.S. Housing and Urban Development Secretary Alphonso Jackson said.
Insured by HUD's Federal Housing Administration (FHA), HUD's reverse mortgage loans require that the borrower be a homeowner, 62 years of age or older; own one's home outright, or have a low mortgage balance, and must live in the home. Reverse mortgage recipients are also required to participate in HUD-approved housing counseling programs before obtaining the loan.
Since 1990, more than 308,000 senior homeowners have used HUD's reverse mortgage program, which covers almost 90 percent of the reverse mortgage market, to borrow against the equity in their homes, making cash readily available to cover necessary expenses. There has been a 10-fold increase in the number of reverse mortgage loans backed the FHA between 2000 and 2006. More than 76,000 seniors obtained a reverse mortgage through HUD in 2006, compared to just 6,637 people in 2000. The number of HECM's insured by the FHA has steadily increased over the past 17 years, with the largest increases coming over the past six years. The FHA insured 18,084 loans in 2003 and more than doubled that amount to 37,789 in 2004. In 2007, the FHA has already backed 69,833 loans, putting the HECM program on pace to surpass its 2006 total this summer.
Unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower no longer maintains the home as their principal residence. If the homeowner has an existing mortgage on the home, it will be paid off with proceeds from the reverse mortgages. The remaining equity can be distributed as a lump sum, on a monthly basis, or on an occasional basis as a line of credit.
Reverse mortgage are the bright spot in today's housing market, and their significance will only increase as more baby boomers reach retirement. Today, more than 34 million Americans are over age 65, according to the Census Bureau. By 2030, Americans 65 and older are expect to number almost 70 million and to represent 20 percent of the population.
To help more seniors take advantage of reverse mortgages, HUD's Government National Mortgage Association (Ginnie Mae) is also creating a HECM mortgage-backed security that will allow FHA-insured reverse mortgages to be used as collateral to back Ginnie Mae securities. This change will expand the reverse mortgage business and should provide seniors with lower rates by allowing mortgage lenders to obtain a better price for their loans in the secondary market.
"As retiring baby boomers become eligible, reverse mortgages will continue to gain in popularity. Seniors are looking for financial independence and security late in life, and reverse mortgages continue to be their best bet," Jackson added.
PBS Show #452 "Reverse Mortgages"
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