Mortgage: for
those twilight years
Tracing back, the concept of reverse mortgages
began when one good soul, Nelson Haynes of
Deering Savings and Loans wanted to help out the
widow of his high school football coach. Today
that small act has developed into a popular
financing option for the senior citizens. With
about 6,000 people turning 62 every day, the
market is on an upswing.
2004 witnessed a growing number of applications
for reverse mortgage. Compared to 2003 which
witnessed a rise of 112% in applicants, 2004 had
only 109%, yet Home Equity Conversion Mortgage (HECM)
grabbed the lion’s share with 90% of the pie.
This is attributed to the growing awareness
especially from the government initiative to
educate the senior citizens about the benefits
of reverse mortgage. In its early years,
Americans were apprehensive about this backward
process. They felt that this income getting
mortgage has something fishy associated. Some
lenders too helped spread rumors because the
products did not involve much security to them,
especially with the FHA insured HECM.
The concern for seniors has taken the driver’s
seat on the federal agenda. There have been
large scale awareness campaigns, including
seminars and workshops .This year the much
talked about high loan limits for Fannie Mae’s
Home Keeper Loan has been raised from $333,700
to $359,650 with a 50% high for Alaska, Hawaii
and US Virgin Islands. While HECM have increased
its high loan limit to $312,896 from $290,319,
subject to geographical area specifications. The
lower limit has also been raised amidst much
criticism to $172,632 .The purpose of roping in
the lower equity home owners into this benefit
stands defeated. The prime reason being, the
risk involved.
The reverse mortgage is primarily for the
retired citizens above 62. Who have no source of
income and who more often than not spend the
rest of their lives amidst mounting medical
bills. This is one loan which does not check
your credit and your salary stubs. You only need
to own a house which has no lien attached and
you can borrow against its current equity. The
best part of the scheme is you don’t have to
make those monthly payments, rather you get an
income. This frees up money for all kinds of
uses and is tax free.
Reverse mortgages will become more popular as
more and more products are peering in and the
rates are making only gradual improvements. This
has found a place on every American’s long term
plans. Last year saw reverse mortgages occupying
3% of the mortgage market that is set to triple
in 2005 according to the National Reverse
Mortgage Lenders’ Association. Our last years
will also be a no-compromise deal. Thanks to
Reverse Mortgage.
This article is the property of
www.1st-in-homeloans.com, which has been
offering home mortgage services since 2002. To
find out more visit
www.1st-in-homeloans.com
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