If you are a senior citizen considering a reverse mortgage currently, it is natural if you are a bit fearful about moving forward with your decision, given the current conditions within the mortgage and credit markets. The loss of confidence in the stock markets nowadays is unprecedented.
However, your fear is not really justified. Reverse mortgages and the lenders that provide these are not part of the sub-prime credit crises.
This segment from the market failed to take part in originating the risky loans which have came up with chaos on Wall Street as well as the unprecedented number of foreclosures on Main Street. Reverse mortgage lenders are certainly not in danger of having to take note of huge losses on their reverse mortgage loan portfolios. Therefore, should you require reverse mortgage Medford Oregon at the moment you should not be deterred by scary sound-bites on the nightly news.
The issue though, would be that the public, especially seniors, usually are not differentiating between both of these market segments. Recently I have heard several senior homeowners say such things as; “I would never consider acquiring a reverse mortgage now, with everything that is occurring.” Or “I can’t obtain a reverse mortgage now and risk my the place to find foreclosure in today’s’ market.”
Thinking by doing this is like throwing the baby by helping cover their the bath water. Reverse mortgages are very different from traditional conventional “forward” mortgages. A reverse mortgage along with a forward mortgage are certainly not the same. You must not dismiss out of hand, the thought of acquiring a reverse mortgage at this time, simply because the merchandise name has the word “mortgage” within it.
Firstly, reverse mortgages require no monthly installments or repayment of any type, as long as the senior lives in your home.
Consequently, you might never lose your house to foreclosure for lack of payment. The reality is that numerous seniors have actually saved their homes from foreclosure by obtaining a reverse mortgage to switch a regular forward mortgage they had a hard time making payments on. Providing you sustain your property and pay your premises taxes, your house is virtually foreclosure proof by taking out a government insured reverse home mortgage.
Secondly, when you get a HECM (Home Equity Conversion Mortgage) it is insured by FHA (Federal Housing Administration.) What which means for you, in light of the recent bank losses and hedge fund failures, is when your lender would fall out of business at all, the FHA insurance fund steps in to ensure that you carry on and have the money and advantages from your reverse mortgage.
One third safety feature of reverse mortgages, is that anyone interested in obtaining this type of loan must first complete HUD counseling. HUD counseling is provided by FHA/HUD approved non-profit credit counseling agencies which are not owned by or affiliated with lenders. The counseling covers the advantages and disadvantages of reverse mortgages and indicates possible alternatives that seniors should consider as opposed to a reverse mortgage. HUD counseling is totally free towards the senior and will be conducted face-to-face or by telephone. Seniors ought to have adult children, trusted advisors or anyone that might help with their decision, attend the counseling session also. Right after the senior completes the counseling, a certificate is distributed which has to be given to the lender before an application for a reverse mortgage may be processed.
Even though it is understandable that the general public thinks that is now not a great time to take into consideration any sort of mortgage, it is actually definitely not true when the mortgage you are planning on is really a reverse mortgage. Actually, getting this kind of loan sooner instead of later could actually be an advantage. This is because an important ingredient in determining the amount of money you kbfshn receive coming from a reverse mortgage hinges on the quantity of equity you may have in your house. If your house is declining in value because of the current housing and credit crises, you will realize a lower benefit amount from the if your house is worth less in the future than it is today.
In essence, don’t let fear or anxiety about the unknown keep you from educating yourself concerning this unique financial planning tool if you believe a reverse mortgage is a thing that will help you. Furthermore, usually do not let friends and neighbors influence your final decision unless they are experts on the topic. Education and solid facts are steps to make an educated decision. Do not tune in to rumors or nay sayers if you think you might be able to enhance your lifestyle by obtaining a reverse mortgage.