Brian Armstrong asked:


Reverse mortgages are used to assist seniors who want to supplement their income with mortgage payments, but instead of paying the bank, those who take out the loan actually get paid. I spoke with someone the other day who had a completely mistaken concept of what these are used for and had the mistaken idea that these were simply a tool that ended up scamming seniors out of their retirement.

I heard it explained this way: Reverse mortgages are no free lunch which is true, but we also would consider that these mortgages are a great tool for many seniors who simply need or want some extra funds to supplement their retirement, improve their standard of living, do some traveling or any number of other things.

There are a lot of misconceptions about what reverse mortgages are and what they can be used for as well as how they work. Before I get into all of that, you need to know that these types of mortgages are a completely legitimate financial tool. You may start to see more and more news stories about these types of mortgages.

One of the protective features that are built into the reverse mortgages is the requirement that each applicant receive counseling from a 3rd party counselor that isn’t related to the lender in any way. These counselors must work with the borrowers and provide documentation back to the lender prior to being able to approve the loan.

This process insures that the seniors receive the type of advice they need prior to making a decision like this. So, here are some of the details of this relatively new type of mortgage. These work based on seniors who will be moving out of their home at some point in time and the fact that these homes have equity. The bank or lender is relying on the ability to recoup funds from the refinance of the home or the sale of the home when the loan comes due.

The loan will come due when the borrower moves out of the home permanently or if the borrower dies. The main requirements of the homeowner are that they maintain the home, pay the property taxes and the homeowners insurance. To qualify, the minimum age is 62. Typically, the older you are, the more you’ll qualify for because there is the assumption that you won’t be in the home for as long.

There is a lot of information online about reverse mortgages. Do your research and make sure you ask as many questions as you may need to get the answers as to whether or not reverse mortgages are right for you.



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Brian Armstrong asked:


Reverse mortgages are mortgages where the lender pays the borrower instead of the other way around. In the event of reverse mortgages, seniors need only be 62 years or older with equity in their home.

There are no requirements like credit score or income or anything else. Basically seniors with equity in their home and over the age of 62 can qualify.

Reverse mortgages require you to get counseling from a 3rd party advisor on whether or not a reverse mortgage is right for you. This mandated counseling is to specifically prevent seniors from being taken advantage of.

One of the main questions is what these funds from a reverse mortgage can be used for. Reverse mortgages funds can be used for anything including paying off an existing mortgage, traveling, home improvements, or simply enhancing the standard of living.

There are several websites that discuss reverse mortgages and provide details for seniors. Getting started with a reverse mortgage is usually done with a competent loan officer that can give you details, tell you how much you can qualify for and provide some insight into whether or not a reverse mortgage is right for you.

After this initial conversation with a reverse mortgage broker or loan officer, you will then need to proceed with either the paperwork or the required counseling with a 3rd party. Your loan officer will provide you with a list of counselors you can communicate with to discuss the reverse mortgage, your financial situation and alternatives.

This is the basic place to get started. You can find reverse mortgage lenders by searching on the internet or contacting local mortgage brokers in your area.

Reverse mortgages aren’t for everybody, but they can be used successfully to assist seniors who may be living paycheck to paycheck.

Many seniors choose to use this reverse mortgage to pay off an existing mortgage. You should inquire as to whether or not you’ll be able to do this or to use the mortgage to purchase a new home with a single transaction.

The great part about a reverse mortgage is that it can be a tool to aid in retirement not only for seniors having a difficult time with their finances, but also for seniors who are looking to take that trip they’ve always wanted to take or visit the grandkids more often.

Some seniors use this reverse mortgage to increase the equity in the home through home improvements as well which can put them in a better situation to refinance the home if they’ll be leaving it to their heirs or an estate.



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