If you are a senior citizen considering a reverse mortgage at this time, 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 in the stock markets these days is unprecedented.
However, your fear is not justified. Reverse mortgages and also the lenders that offer these are not portion of the sub-prime credit crises.
This segment from the market did not take part in originating the risky loans that have come up with chaos on Wall Street as well as the unprecedented variety of foreclosures on Main Street. Reverse mortgage lenders usually are not in danger of needing to take note of huge losses on their reverse home mortgage portfolios. Therefore, in the event you require Medford reverse mortgage currently you should not be deterred by scary sound-bites on the nightly news.
The problem though, is the fact that public, especially seniors, are certainly not differentiating between these two market segments. Recently We have heard several senior homeowners say things like; “I would never consider obtaining a reverse mortgage now, with everything that is going on.” Or “I can’t get yourself a reverse mortgage now and risk my house to foreclosure in today’s’ market.”
Thinking in this way is much like throwing the infant out with the bath water. Reverse mortgages are totally different from traditional conventional “forward” mortgages. A reverse mortgage as well as a forward mortgage are not at all the same. You should not dismiss out of hand, the thought of obtaining a reverse mortgage at this time, just because the product name provides the word “mortgage” inside 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 absence of payment. The reality is that many seniors have actually saved their homes from foreclosure by getting a reverse mortgage to replace a traditional forward mortgage that they had a hard time making payments on. As long as you keep your property and pay your property taxes, your property is virtually foreclosure proof if you take out a government insured reverse mortgage loan.
Secondly, should you get a HECM (Home Equity Conversion Mortgage) it really is insured by FHA (Federal Housing Administration.) What this means for you personally, in light of the current bank losses and hedge fund failures, is when your lender were to fall out of business for any reason, the FHA insurance fund steps in to make sure that you continue to receive the money and advantages of your reverse mortgage.
One third safety feature of reverse mortgages, is the fact anyone thinking about obtaining this sort of loan must first complete HUD counseling. HUD counseling is supplied by FHA/HUD approved non-profit consumer credit counseling agencies that are not properties of or affiliated with lenders. The counseling covers the pros and cons of reverse mortgages and points out possible alternatives that seniors should think about rather than a reverse mortgage. HUD counseling is cost-free for the senior and will be conducted personally or by telephone. Seniors should have adult children, trusted advisors or anyone that may help making use of their decision, attend the counseling session too. Right after the senior completes the counseling, a certificate is issued which has to be presented to the lending company before a software for any reverse mortgage could be processed.
Even though it is understandable that the general public thinks that now could be not the best time to consider any type of mortgage, it really is definitely not true when the mortgage you are considering is a reverse mortgage. In reality, getting this kind of loan sooner instead of later could really be a benefit. The reason is that a key ingredient in determining how much cash you kbfshn receive coming from a reverse mortgage hinges on the amount of equity you might have in your home. If your home is declining in value as a result of current housing and credit crises, you will realize a reduced benefit amount from a if your property is worth less down the road than today.
The bottom line is, don’t let fear or the fear of the unknown prevent you from educating yourself about this unique financial planning tool if you feel a reverse mortgage is a thing that can benefit you. Furthermore, do not let friends and neighbors influence your decision unless these are experts on the topic. Education and solid facts are steps to make a knowledgeable decision. Do not listen to rumors or nay sayers if you think you might be able to boost your lifestyle by acquiring a reverse mortgage.