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Learn How To Use A Reverse Mortgage To Buy A House
See the Top 10 Home Improvements for Seniors
Find Out What The 2008 COLA Increase Means To You
Just The FAQs: Answers to Common Questions About Reverse Mortgages
See the Top 10 Reasons Seniors Get Reverse Mortgages
See the Top 10 Myths About Reverse Mortgages
Learn About Using A Reverse Mortgage As An Estate Planning Tool
Learn About Reverse Mortgage Safeguards
Learn About Pros and Cons of Reverse Mortgages
Using Reverse Mortgages For Health Care
Utah Reverse Mortgage News
PBS Show #452 "Reverse Mortgages"
Good Morning America: Reverse Home Mortgage -- Risks Versus Rewards
"There is an increasing trend among senior citizens in need of money for their rising health care and prescription drug costs — taking out a reverse mortgage or in essence, getting paid by their home. According to the National Reverse Mortgage Lenders Association, the number of reverse mortgages insured by the U.S. Department of Housing and Urban Development (representing 90 percent of all such loans) has surged from 157 in 1990 to more than 107,558 in 2007, with a forecast of more than 200,000 this year.
The reason? More than 12.5 million seniors over the age of 65 own their homes free and clear, and are sitting on more than $4 trillion in home equity — money which many need to put toward their daily living and medical expenses..."
CBS The Early Show: Raising Money With Reverse Mortgages
"(CBS) Many seniors have lots of equity in their homes but a limited cash flow to provide for their golden years.
That's why some are turning to reverse mortgages, where banks pay you to live in your own home.
But the reverse mortgage option isn't right for everyone.
Vera Gibbons from Kiplinger's Personal Finance magazine visited The Early Show to help clear up some questions.
As Gibbons explains, "It's like a regular mortgage but it works in reverse: Rather than you paying the lender, the lender is paying you."
She says there are several types of homeowners who might be interested in these mortgages.
The first is what she calls the need-based candidate — "Someone who needs this money for a medical emergency or some other type of emergency."
Another is "the financial planner type." Gibbons said this person is, "Someone who might want to use this rather than dip into their retirement funds."
And then there is "someone who is just looking to live, to enhance their lifestyle. To play a lot of golf, to fund their retirement, to take vacations..."
Wall Street Journal: Reverse Mortgages: The Choices Expand
"... The boom in reverse mortgages helped Ronald Prast, a 74-year-old Phoenix retiree. When he first applied two years ago, he was told by a loan officer that he wasn't a good candidate; government rules would have allowed him to cash out only a small portion of the value of his half-million-dollar home. But last November, when Bank of America Corp. introduced a reverse mortgage that allows homeowners to borrow as much as 65% of a property's value, up to $10 million, Mr. Prast and his wife, Carolann, quickly signed up.
The couple's house, for which they paid $105,000 in 1981, was appraised at $540,000, Mr. Prast says. They used an initial draw of $208,000 to pay off their outstanding mortgage, home-equity loan, one year's property tax and the loan fees, freeing up an extra $21,000 a year formerly used to make mortgage payments for travel and indulgences like paying for a granddaughter's semester in Australia. They also have a credit line worth $75,000 that they are setting aside for medical expenses.
"We were comfortably well off, and we wanted to release some of the funds we had tied up in our home," Mrs. Prast says..."
HUD: More than 300,000 Seniors Benefitting from Reverse Mortgages
WASHINGTON - More seniors than ever before are reaping the benefits of reverse mortgages to enjoy their golden years. New data from HUD reveals that more than 300,000 seniors have used the federally-insured Home Equity Conversion Mortgage (HECM) loan program to convert the equity in their home into cash without having to move.
"For some senior citizens on fixed incomes, reverse mortgages are a great way to cash in on their home equity to make needed repairs, pay unexpected medical bills or just to supplement their retirement. Seniors shouldn't have to choose between taking out a loan to fix up their home and putting food on the table. With a reverse mortgage, this difficult decision is a thing of the past," U.S. Housing and Urban Development Secretary Alphonso Jackson said.
Insured by HUD's Federal Housing Administration (FHA), HUD's reverse mortgage loans require that the borrower be a homeowner, 62 years of age or older; own one's home outright, or have a low mortgage balance, and must live in the home. Reverse mortgage recipients are also required to participate in HUD-approved housing counseling programs before obtaining the loan.
Since 1990, more than 308,000 senior homeowners have used HUD's reverse mortgage program, which covers almost 90 percent of the reverse mortgage market, to borrow against the equity in their homes, making cash readily available to cover necessary expenses. There has been a 10-fold increase in the number of reverse mortgage loans backed the FHA between 2000 and 2006. More than 76,000 seniors obtained a reverse mortgage through HUD in 2006, compared to just 6,637 people in 2000. The number of HECM's insured by the FHA has steadily increased over the past 17 years, with the largest increases coming over the past six years. The FHA insured 18,084 loans in 2003 and more than doubled that amount to 37,789 in 2004. In 2007, the FHA has already backed 69,833 loans, putting the HECM program on pace to surpass its 2006 total this summer.
Unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower no longer maintains the home as their principal residence. If the homeowner has an existing mortgage on the home, it will be paid off with proceeds from the reverse mortgages. The remaining equity can be distributed as a lump sum, on a monthly basis, or on an occasional basis as a line of credit.
Reverse mortgage are the bright spot in today's housing market, and their significance will only increase as more baby boomers reach retirement. Today, more than 34 million Americans are over age 65, according to the Census Bureau. By 2030, Americans 65 and older are expect to number almost 70 million and to represent 20 percent of the population.
To help more seniors take advantage of reverse mortgages, HUD's Government National Mortgage Association (Ginnie Mae) is also creating a HECM mortgage-backed security that will allow FHA-insured reverse mortgages to be used as collateral to back Ginnie Mae securities. This change will expand the reverse mortgage business and should provide seniors with lower rates by allowing mortgage lenders to obtain a better price for their loans in the secondary market.
"As retiring baby boomers become eligible, reverse mortgages will continue to gain in popularity. Seniors are looking for financial independence and security late in life, and reverse mortgages continue to be their best bet," Jackson added.
NBC News: Older Americans Turn To Reverse Mortgages
"...Available only to those 62 and older, reverse mortgages are used by more and more retirees to enhance their lifestyles or make ends meet, like 77-year-old Peggy Gysel.
“I could just barely keep up,” she says.
Gysel’s mortgage consumed most of her Social Security check. But using a reverse mortgage, she paid off her Redford, Michigan home and established a line of credit. And that has made quite a difference in here life.
“I'm much more relaxed,” she says. “I can sleep at night.”
Unlike a typical mortgage, a reverse mortgage isn't based on your income or credit. Instead, lenders look at your age and your home's value, and make an unusual requirement before you can get the most popular of these loans — you must go through counseling to get the federally insured reverse mortgage..."
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