Reverse Mortgage Information
Here you can find plenty of Reverse Mortgage information. Learn what a reverse mortgage is and how they work, you can also find reverse mortgage lenders in your area.
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What is a Reverse Mortgage?
Reverse Mortgages have grown in popularity in recent years, offering homeowners over the age of 62 an opportunity to liquidate a portion of their home equity in exchange for some much needed tax-free cash. A reverse mortgage can accomplish this for them and also eliminate monthly mortgage payments at the same time. When seniors ask, “What is a reverse mortgage?” They are generally confused by the answer. How can they get cash out of their homes and no longer pay a monthly mortgage payment?
The reverse mortgage program has been a very real answer to seniors plagued with shrinking retirement investments and dwindling savings. Many have faced losing their homes in response to their inability to get a loan due to their age or reduced income, despite the fact that they have substantial equity tied up in their residences. Because of these factors and others, the focus on reverse mortgages is increasing and is expected to reach an all time high with the entry of retiring baby boomers into the market.
Reverse Mortgages - How They Work
Most reverse mortgage lenders submit reverse mortgages under the Federal Housing Administration's Home Equity Conversion Mortgage program. FHA-backed reverse mortgages can only be offered to homeowners of the age of 62 and older. These reverse mortgages are insured, which means that if the lender goes out of business, the borrower is still protected and will continue to receive the remaining scheduled payments.
Reverse mortgages have come a long way since the first government-insured reverse mortgage was given in 1989. The traditionally high origination fees are now much lower and some lenders have done away with them altogether. These lower costs are changing the focus of reverse mortgages and opening up the market to customers who shunned it in the past due to the expense and the super low loan-to-value requirement. Today, due to the recent changes, reverse mortgages are able to compete with home equity lines of credit for many consumers. These changes are helping to discharge some of the past negativity that used to surround reverse mortgage loans.