If you are a senior citizen considering a reverse mortgage at the moment, it is natural in case 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 within the financial markets today is unprecedented.
However, your fear is not really justified. Reverse mortgages as well as the lenders that offer these are not part of the sub-prime credit crises.
This segment in the market did not get involved in originating the risky loans that have come up with chaos on Wall Street as well as the unprecedented quantity of foreclosures on Main Street. Reverse mortgage lenders are certainly not at risk of needing to write down huge losses on the reverse mortgage loan portfolios. Therefore, should you may need reverse mortgages Medford OR at this time you should not be deterred by scary sound-bites on the nightly news.
The problem though, is the fact that public, especially seniors, are not differentiating between both of these market segments. Recently I actually have heard several senior homeowners say such things as; “I might never take into consideration acquiring a reverse mortgage now, with everything that is happening.” Or “I can’t get 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 totally different from traditional conventional “forward” mortgages. A reverse mortgage along with a forward mortgage are not at all exactly the same thing. You should not dismiss out of control, the thought of getting a reverse mortgage at the moment, simply because the item name has the word “mortgage” within it.
Firstly, reverse mortgages require no monthly installments or repayment of any kind, as long as the senior lives in the house.
Consequently, you can never lose your home to foreclosure for absence of payment. The reality is that numerous seniors have actually saved their houses from foreclosure by obtaining a reverse mortgage to change a regular forward mortgage they had difficulty making payments on. As long as you sustain your property and pay your property taxes, your property is virtually foreclosure proof by taking out a government insured reverse mortgage loan.
Secondly, when you get a HECM (Home Equity Conversion Mortgage) it is actually insured by FHA (Federal Housing Administration.) What which means for you, considering the current bank losses and hedge fund failures, is when your lender were to get out of business at all, the FHA insurance fund steps in to make certain that you carry on and get the money and advantages from your reverse mortgage.
Another safety feature of reverse mortgages, is the fact that anyone thinking about obtaining this kind of loan must first complete HUD counseling. HUD counseling is supplied by FHA/HUD approved non-profit credit guidance agencies which are not properties of 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 for the senior and can be conducted face-to-face or by telephone. Seniors ought to have adult children, trusted advisors or anyone that might help making use of their decision, attend the counseling session too. Following the senior completes the counseling, a certificate is issued which has to be given to the financial institution before a software for any reverse mortgage can be processed.
Though it may be understandable that most people thinks that is now not a good time to take into consideration any type of mortgage, it is definitely not true if the mortgage you are planning on is really a reverse mortgage. Actually, getting this kind of loan sooner as opposed to later could actually be a benefit. This is because a key ingredient in determining the amount of money you kbfshn receive from the reverse mortgage hinges on the amount of equity you may have in your home. If your property is declining in value due to the current housing and credit crises, you may realize a lower benefit amount from a if your house is worth less down the road than it is today.
The bottom line is, don’t let fear or the fear of the unknown prevent you from educating yourself concerning this unique financial planning tool if you think a reverse mortgage is something that may benefit you. Furthermore, do not let friends and neighbors influence your choice unless these are experts on the topic. Education and solid facts are steps to make an informed decision. Do not tune in to rumors or nay sayers if you believe you could possibly boost your lifestyle by getting a reverse mortgage.