If you are a senior citizen considering a reverse mortgage at the moment, it is natural if you are a bit fearful about moving forward with your decision, given the current conditions in the mortgage and credit markets. The loss of confidence within the stock markets today is unprecedented.
However, your fear will not be justified. Reverse mortgages and also the lenders that provide these are not area of the sub-prime credit crises.
This segment in the market failed to get involved in originating the risky loans who 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 jot down huge losses on their own reverse home mortgage portfolios. Therefore, in the event you require reverse mortgage Medford Oregon currently you must not be deterred by scary sound-bites on the nightly news.
The matter though, is the fact that average person, especially seniors, are certainly not differentiating between these two market segments. Recently I have heard several senior homeowners say things such as; “I might never think about acquiring a reverse mortgage now, with everything else that is going on.” Or “I can’t obtain a reverse mortgage now and risk my home to foreclosure in today’s’ market.”
Thinking this way is like throwing the child by helping cover their the bath water. Reverse mortgages are completely different from traditional conventional “forward” mortgages. A reverse mortgage along with a forward mortgage are not at all the same. You must not dismiss out of hand, the idea of getting a reverse mortgage currently, because the product name provides the word “mortgage” inside it.
Firstly, reverse mortgages require no monthly payments or repayment of any sort, so long as the senior lives in the house.
Consequently, you might never lose your house to foreclosure for insufficient payment. The fact 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. As long as you keep your property and pay your premises taxes, your home is virtually foreclosure proof if you are taking out a government insured reverse home mortgage.
Secondly, should you get a HECM (Home Equity Conversion Mortgage) it is actually insured by FHA (Federal Housing Administration.) What this means for you, considering the current bank losses and hedge fund failures, is that if your lender were to fall out of business at all, the FHA insurance fund steps in to make sure that you continue to have the money and benefits from your reverse mortgage.
One third safety feature of reverse mortgages, is the fact that anyone thinking about obtaining this type of loan must first complete HUD counseling. HUD counseling is supplied by FHA/HUD approved non-profit credit counseling agencies that are not belonging to or connected to lenders. The counseling covers the pros and cons of reverse mortgages and indicates possible alternatives that seniors should think about instead of a reverse mortgage. HUD counseling is cost-free to the senior and will be conducted face-to-face or by telephone. Seniors ought to have adult children, trusted advisors or anyone that can help with their decision, attend the counseling session also. After the senior completes the counseling, a certificate is issued which must be given to the financial institution before an application to get a reverse mortgage could be processed.
Even though it is understandable that most people thinks that is now not a great time to think about any type of mortgage, it is certainly not true if the mortgage you are planning on is actually a reverse mortgage. Actually, getting this kind of loan sooner rather than later could really be a benefit. The reason is that a key ingredient in determining how much cash you kbfshn receive from the reverse mortgage hinges on the quantity of equity you might have in your house. If your property is declining in value as a result of current housing and credit crises, you are going to 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 the fear of the unknown keep you from educating yourself concerning this unique financial planning tool if you think a reverse mortgage is one thing that can benefit you. Furthermore, usually do not let friends and neighbors influence your decision unless they may be experts on the topic. Education and solid facts are steps to make an informed decision. Tend not to pay attention to rumors or nay sayers if you believe you might be able to boost your lifestyle by obtaining a reverse mortgage.