In case 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 in the financial markets nowadays is unprecedented.
However, your fear is not really justified. Reverse mortgages as well as the lenders which provide options are not portion of the sub-prime credit crises.
This segment in the market did not take part in originating the risky loans who have created the chaos on Wall Street as well as the unprecedented quantity of foreclosures on Main Street. Reverse mortgage lenders are certainly not in danger of being forced to take note of huge losses on their own reverse mortgage loan portfolios. Therefore, should you require reverse mortgage Medford Oregon at this time you must not be deterred by scary sound-bites on the nightly news.
The issue though, is that the average person, especially seniors, are not differentiating between both of these market segments. Recently I have heard several senior homeowners say things like; “I would personally never consider getting a reverse mortgage now, with everything that is happening.” Or “I can’t get yourself a reverse mortgage now and risk my house to foreclosure in today’s’ market.”
Thinking this way is much like throwing the infant out with the bath water. Reverse mortgages are completely different from traditional conventional “forward” mortgages. A reverse mortgage as well as a forward mortgage are certainly not the same. You must not dismiss out of hand, the thought of obtaining a reverse mortgage currently, because the product name provides the word “mortgage” in it.
Firstly, reverse mortgages require no monthly obligations or repayment of any sort, as long as the senior lives in your home.
Consequently, you could never lose your home to foreclosure for absence of payment. The fact is that numerous seniors have actually saved their properties from foreclosure through getting a reverse mortgage to replace a regular forward mortgage they had a difficult time making payments on. Providing you maintain your property and pay your home taxes, your property is virtually foreclosure proof if you are taking out a government insured reverse mortgage loan.
Secondly, should you get a HECM (Home Equity Conversion Mortgage) it is actually insured by FHA (Federal Housing Administration.) What this means to suit your needs, in light of the current bank losses and hedge fund failures, is when your lender would fall out of business for any excuse, the FHA insurance fund steps in to make sure that you still have the money and advantages from your reverse mortgage.
One third safety feature of reverse mortgages, is that anyone considering obtaining this sort of loan must first complete HUD counseling. HUD counseling is supplied by FHA/HUD approved non-profit credit guidance agencies that are not belonging to or affiliated with lenders. The counseling covers the advantages and disadvantages of reverse mortgages and points out possible alternatives that seniors should think about instead of a reverse mortgage. HUD counseling is free of charge towards the senior and may be conducted in person or by telephone. Seniors are encouraged to have adult children, trusted advisors or anyone that might help with their decision, attend the counseling session also. Right after the senior completes the counseling, a certificate is distributed which should be given to the lending company before a software for a reverse mortgage can be processed.
Though it may be understandable that most people thinks that now could be not a great time to think about any kind of mortgage, it is definitely not true in the event the mortgage you are planning on is really a reverse mortgage. Actually, getting this sort of loan sooner as opposed to 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 level of equity you might have in your home. If your property is declining in value due to the 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 today.
The bottom line is, don’t let fear or fear of the unknown stop you from teaching yourself concerning this unique financial planning tool if you believe a reverse mortgage is something that may help you. Furthermore, tend not to let friends and neighbors influence your decision unless they are experts on the topic. Education and solid facts are steps to make a knowledgeable decision. Tend not to listen to rumors or nay sayers if you think you could possibly enhance your lifestyle by getting a reverse mortgage.