In case 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 them are not area of the sub-prime credit crises.
This segment in the market did not take part in originating the risky loans which have came up with chaos on Wall Street and also the unprecedented variety of foreclosures on Main Street. Reverse mortgage lenders usually are not at risk of having to take note of huge losses on their reverse home mortgage portfolios. Therefore, if you are in need of reverse mortgage Medford OR at this time you should not be deterred by scary sound-bites on the nightly news.
The problem though, would be that the public, especially seniors, are certainly not differentiating between those two market segments. Recently I have heard several senior homeowners say things like; “I might never take into consideration getting a reverse mortgage now, with everything else that is occurring.” Or “I can’t get a reverse mortgage now and risk my home to foreclosure in today’s’ market.”
Thinking in this way is like throwing the infant out with the bath water. Reverse mortgages are completely different from traditional conventional “forward” mortgages. A reverse mortgage and a forward mortgage are not at all exactly the same thing. You should not dismiss out of hand, the concept of getting a reverse mortgage at this time, because the item name has got the word “mortgage” within it.
Firstly, reverse mortgages require no monthly installments or repayment of any kind, so long as the senior lives in the house.
Consequently, you might never lose your property to foreclosure for absence of payment. The truth is that numerous seniors have actually saved their properties from foreclosure by getting a reverse mortgage to change a regular forward mortgage that they had a difficult 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 that means for you, considering the recent bank losses and hedge fund failures, is when your lender were to fall out of business for any excuse, the FHA insurance fund steps in to make sure that you still get the money and advantages from your reverse mortgage.
Another safety feature of reverse mortgages, is that anyone thinking about obtaining this sort 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 associated with lenders. The counseling covers the pros and cons of reverse mortgages and points out possible alternatives that seniors should consider as opposed to a reverse mortgage. HUD counseling is free of charge for the senior and may be conducted face-to-face or by telephone. Seniors should have adult children, trusted advisors or anyone that can help with their decision, attend the counseling session too. Right after the senior completes the counseling, a certificate is issued which has to be given to the financial institution before a software for a reverse mortgage could be processed.
Though it may be understandable that the public thinks that is now not a good time to think about any sort of mortgage, it really is certainly not true when the mortgage you are planning on is a reverse mortgage. Actually, getting this sort of loan sooner rather than later could actually be a benefit. This is because an important ingredient in determining the amount of money you kbfshn receive from the reverse mortgage hinges on the amount of equity you have at home. If your home is declining in value due to the current housing and credit crises, you are going to realize a reduced benefit amount from a if your house is worth less later on than today.
The bottom line is, don’t let fear or fear of the unknown prevent you from teaching yourself concerning this unique financial planning tool if you believe a reverse mortgage is something that will benefit you. Furthermore, tend not to let friends and neighbors influence your choice unless they may be experts on the topic. Education and solid facts are how you can make a knowledgeable decision. Tend not to pay attention to rumors or nay sayers if you believe you might be able to enhance your lifestyle by obtaining a reverse mortgage.