Should you be 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 today is unprecedented.
However, your fear is not really justified. Reverse mortgages as well as the lenders that offer these are not area of the sub-prime credit crises.
This segment from the market did not take part in originating the risky loans which have created the chaos on Wall Street as well as the unprecedented quantity of foreclosures on Main Street. Reverse mortgage lenders are not in danger of having to write down huge losses on the reverse home loan portfolios. Therefore, if you are in need of reverse mortgage Medford Oregon at this time you should not be deterred by scary sound-bites on the nightly news.
The issue though, is the fact that general public, especially seniors, are certainly not differentiating between these two market segments. Recently I actually have heard several senior homeowners say things like; “I would personally 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 in this way is much like throwing the baby out with the bath water. Reverse mortgages are very different from traditional conventional “forward” mortgages. A reverse mortgage as well as a forward mortgage are certainly not the same thing. You should not dismiss out of control, the idea of acquiring a reverse mortgage at this time, simply because the merchandise name has got the word “mortgage” within it.
Firstly, reverse mortgages require no monthly payments or repayment of any kind, provided that the senior lives in the home.
Consequently, you could never lose your property to foreclosure for lack of payment. The fact is that lots of seniors have actually saved their homes from foreclosure through getting a reverse mortgage to switch a conventional forward mortgage that they had difficulty 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, if you get a HECM (Home Equity Conversion Mortgage) it is insured by FHA (Federal Housing Administration.) What which means for you, considering the recent bank losses and hedge fund failures, is when your lender would fall out of business at all, the FHA insurance fund steps in to make sure that you carry on and receive the money and advantages of your reverse mortgage.
A third safety feature of reverse mortgages, is the fact anyone thinking about obtaining this kind of loan must first complete HUD counseling. HUD counseling is supplied by FHA/HUD approved non-profit consumer credit counseling agencies that are not owned by or affiliated with lenders. The counseling covers the pros and cons of reverse mortgages and points out possible alternatives that seniors should look into as opposed to a reverse mortgage. HUD counseling is free of charge to the senior and will be conducted personally or by telephone. Seniors are encouraged to have adult children, trusted advisors or anyone that can help making use of their decision, attend the counseling session as well. Following the senior completes the counseling, a certificate is distributed which must be presented to the lender before an application to get a reverse mortgage could be processed.
Though it may be understandable that the general public thinks that now could be not a great time to take into consideration any sort of mortgage, it is not at all true when the mortgage you are considering is actually a reverse mortgage. In reality, getting this sort of loan sooner as opposed to later could really be a benefit. This is because a key ingredient in determining how much cash you kbfshn receive from a reverse mortgage hinges on the quantity of equity you have in your house. If your home is declining in value as a result of current housing and credit crises, you are going to realize a lower benefit amount coming from a if your home is worth less in the future than it is today.
In essence, don’t let fear or fear of the unknown stop you from educating yourself about this unique financial planning tool if you feel a reverse mortgage is one thing that will assist you. Furthermore, do not let friends and neighbors influence your choice unless they may be experts on the topic. Education and solid facts are steps to make an informed decision. Tend not to tune in to rumors or nay sayers if you think you might be able to enhance your lifestyle by obtaining a reverse mortgage.