General: Different Reverse Mortgage Options

There are many different reverse mortgage options: single purpose reverse mortgages, federally insured reverse mortgages, and proprietary (private sector) reverse mortgages. Each option has different pros and cons that need to be considered when looking into taken out a reverse mortgage.

Single-Purpose Reverse Mortgages

A single purpose reverse mortgage is the lowest-cost type of reverse mortgages to obtain, but as the name indicates it can only be used for one specified purpose. They are typically offered by state or local government agencies. These loans a great for individuals who need cash for a specific purpose like paying property taxes or fixing up there homes. Here are descriptions for several different types of single purpose reverse mortgages:

• Property tax deferral (PTD) mortgages are reverse mortgages that provide loan advances for paying property taxes.
• Deferred payment loans (DPLs) are reverse mortgages providing lump sum disbursements for repairing or improving homes.

Federally Insured Reverse Mortgages
A federally insured reverse mortgage is the only reverse mortgage insured by the Federal Housing Administration (FHA). These reverse mortgage are one of the lowest-cost multipurpose reverse mortgages currently available. Overall they typically provide the largest total cash benefits of all the reverse mortgage options. The proceeds from a federally insured reverse mortgage can be used for any purpose. These loans are also known as Home Equity Conversion Mortgages (HECMs).
Proprietary Reverse Mortgages
A proprietary reverse mortgage is a mortgage product owned by a private company. These type of loans are more expensive then the other reverse mortgage types and should be approached with caution. Anyone looking into these type loans should get a comparison with a similiar HECM. One benefit of proprietary reverse mortgages are the higher home value limits. So, if you live in a home that is worth a lot more than the average home value in your county, a proprietary loan may give you greater loan advances than a Home Equity Conversion Mortgage (HECM).
As with any financial decision, you should get professional help to help you decide which option is best for your situation. Reverse mortgage counselors can help you evaluate each of your options and help you make an informed decision.
Resource box: For more information visit reverse annuity mortages or the reverse annuity mortgage blog.

Fifth Record Year for Top Reverse Mortgage Lender

Financial Freedom, a subsidiary of IndyMac Bank F.S.B. (Indymac Bank), the nation's largest lender of reverse mortgages, announced that 2005 was its fifth consecutive year for a record number of reverse mortgage loan fundings and applications. Last year, Financial Freedom closed 30,991 loans, representing a 56 percent increase over 19,817 in 2004.

"The number of loans closed this year clearly demonstrates the increasing consumer understanding and appreciation of reverse mortgages as an answer to a wide range of seniors' financial needs," said Jim Mahoney, CEO of Financial Freedom.

Even more impressive then the increase in the number of reverse mortgages funded, was the most dramatic increase in volume dollars. In 2005, Financial Freedom closed $2.9 billion in loans, compared with $1.6 billion in the same period ending December 31, 2004. This represents an 81 percent increase, which indicates that in addition to closing more loans, the average home value per loan has increased as well.

Financial Freedom's loan volume is comprised mainly of two types of loans: FHA's Home Equity Conversion Mortgage or (HECM), the predominant reverse mortgage product in the marketplace; and the Financial Freedom Cash Account, which is the only jumbo reverse mortgage available and designed for homes in excess of $450,000 in value.

ABOUT FINANCIAL FREEDOM: Financial Freedom is a founding member of the National Reverse Mortgage Lenders Association. NRMLA is a nonprofit trade association, based in Washington, DC, whose mission is to support the continued evolution of reverse mortgages as an important financial option for senior homeowners while educating both its members and consumers about the varied applications of this unique loan. For more information, visit the Financial Freedom Web site at www.financialfreedom.com.

Information brought to you by http://www.reverse.settle-today.com and http://reverseannuity.blogspot.com

Reverse Mortgage Specialist Sentinel launches in South Africa

Reverse mortgage (home equity release) specialist Sentinel has just launched in South Africa.

Its South African company is a joint venture to be known as "Senior's Finance", with financial services company the Alexander Forbes Group. The company is already well established in its home country New Zealand, Australia, and Ireland with its reverse mortgage model.

Sentinel sees South Africa as an ideal market for home equity release, as house prices have grown very strongly over recent years, but seniors have very little savings and pensions. Due to the low savings rate, the company estimates that 90% of retirees will not be able to maintain their pre-retirement lifestyles during retirement.

Sentinel is planning two further launches in the pipeline.

General: The Reverse Mortgage: Solution or problem?

Reverse mortgages are complex and it is sometimes hard to know whether they are the right answer for our financial problems.

Sometimes we experience monetary problems and look for options to help us as shown in the following excerpt from "The Reverse Mortgage: Solution or problem?":

Some of the monetary problems we encounter in life are not easily resolved. Often we must search for creative ways to augment income, reduce spending, and more effectively adhere to a budget. However, a most intractable predicament can involve the concluding passages of life, when financial decisions pass from the individual's control.

Understandably, many seniors are on fixed incomes that will not stretch to meet their needs. One program to address this dilemma, for citizens who own a home with substantial equity, involves a device known as a reverse mortgage. We will examine the pros and cons to see whether it appropriately meets the needs of those able to participate.

The following excerpt from the same article describes some of the dangers of reverse mortgages.

Let's now depart from generalities and get specific, for as it's truly said, the devil is in the details. I cannot deny that a reverse mortgage appears to fill a need. For an elderly homeowner with substantial equity, albeit severely limited income, who nurses a fervent desire to remain in possession of a cherished home, this device can make it possible. After acknowledging this, the question to be answered is: At what cost?

Most certainly, one thing to be said about this concept is that it's not cheap borrowing. As with any endeavor where sophisticated professionals negotiate with unknowledgeable clients, the playing field is far from level. Just as representatives of the life insurance industry regularly foist whole life and endowment policies onto an unsuspecting public, marketers of reverse mortgages aggressively promote this product to naïve and vulnerable seniors. The National Reverse Mortgage Lenders Association (NRMLA), an organization formed in 1997 by the industry, enthusiastically touts the benefits while ignoring any detriments.

A visit to their website, http://www.reversemortgage.org/, reveals a bevy of enticing declarations such as: "The funds from a reverse mortgage can be used for anything; there are no income or medical requirements to qualify; no monthly payments are due on a reverse mortgage" and other reassuring palliatives. Although a section of their site prominently itemizes many of the costs to be incurred, nowhere will you find a hint of the many complex and possibly disadvantageous clauses that may be buried in a contract. p> As one example, some reverse mortgages incorporate a provision by which the lender is entitled to a share of the property's equity appreciation. Under such circumstances, there is no way to predict what costs a borrower may actually incur. Just such an unhappy misfortune befell 83-year-old Berta Grey of San Mateo, California, whose reverse mortgage with Transamerica Corporation soared as a result of a "shared appreciation fee."

Some of the things the industry is trying to do to make it look like they are alleviating the issues:

As a way to imply that borrowers are fully informed as to the complexities of these agreements, the industry has instituted the concept of mandatory counseling. The NRMLA website proudly declares: "Before applying for a reverse mortgage, you must first meet with a counselor. The counselor's job is to educate you about reverse mortgages and offer alternative options depending on your situation." Despite this assertion, the fact is that the majority of approved counselors are not neutral parties, but rather are affiliated with lenders, much the same as credit counselors are a part of the credit card industry and function primarily as debt collectors. In actuality, the average reverse mortgage borrower is thoroughly unaware of the agreed upon terms. This is not by accident; it is designed that way.

esources: Brought to you by Reverse Annuity Mortgage Blog and Reverse Annuity Mortgage Guide.

Free Reverse Mortgage Informational DVD

Reverse Mortgage of America, a division of Seattle Mortgage Company, today announced the release of a new informational DVD to help seniors and their families better understand reverse mortgages. This free DVD, titled "Understanding Reverse Mortgages", will address frequently asked questions and dispel myths and misperceptions related to reverse mortgages.

"Understanding Reverse Mortgages" features several one-on-one interviews with senior homeowners who have completed the reverse mortgage process, thus providing insight into the process from the homeowners perspective. It also presents industry experts as they weigh in on how a reverse mortgage can serve as a useful financial tool. The 18-minute informative video explores all aspects of the lending process, including mandatory counseling, matters for consideration and the benefits of a reverse mortgage loan.

"Seniors across the nation are eagerly seeking alternate sources of additional income," says Sarah Hulbert, Senior Vice President and National Director of Reverse Mortgage of America. "It is important that seniors understand and fully examine their options. As our population ages, reverse mortgages will supplement retirement and enhance the quality of life for many more of our community's senior homeowners."

Seattle Financial Group, a growing network of innovative financial services, is dedicated to constantly meeting the consumer's ever-changing needs. Comprised of Seattle Mortgage, Seattle Savings Bank, Seattle Escrow, Seattle Capital, Reverse Mortgage of America and other brands, the company provides real estate financing, savings products, and associated services for all stages of life. General information about the company can be found at www.seattlefinancialgroup.com or by calling 800-643-6610.

Information brought to you by www.reverse.settle-today.com and reverseannuity.blogspot.com

Renting Your Reverse Mortgaged Home?

The following article from Bob Bruss contains some excellent information on what happens when someone with a reverse mortgage moves into a nursing home. In this case, this could mean having to sell her home.

Q: DEAR BOB: My 90-year-old mother-in-law, who recently moved into a nursing home, has a reverse mortgage on her home to pay her living costs. My husband is to inherit her house after she dies. We plan to demolish the house and put a new house on the property. What are the financial ramifications of renting the house to tenants until her death? My husband is reluctant, but I don't want to see the house sitting there vacant, when it could bring in $2,000 monthly rent. -- Elaine H.

A: DEAR ELAINE: Because your mother-in-law moved out of her principal residence, her reverse mortgage will become due and fully payable in full after 12 months of her not occupying the house. Reverse mortgage lenders periodically check up on their borrowers to see if they are still alive and are occupying their primary residence, except for absences less than 12 months.

If the house is rented to a tenant, when the reverse mortgage lender discovers the owner no longer lives there, the lender can require the loan balance be paid in full or it will be put into foreclosure. For more details, read the reverse mortgage documents and consult a lawyer.

Readers with questions should write Robert J. Bruss at 251 Park Road, Burlingame, Calif. 94010, or contact him via his Web page, http://www.bobbruss.com

Benefits of the Reverse Mortgage for the Florida Senior!

There are many benefits of a reverse mortgage for the senior over the age of 62 who has about 45-50% equity in their primary residence. In Florida Reverse mortgages are on the rise due to the increased availability of education and the benefits they provide the average senior.
Below is a list of things the average senior can consider when deciding if a reverse mortgage in Florida is right for them.

A lifetime stream of additional monthly income. This income never stops until both you and your spouse pass. This simply assumes you are both living in the home and both on the mortgage note which is true for almost all of the seniors who apply and execute a reverse mortgage. So, would a lifetime of additional monthly income change your life? Would it make your daily expenses a bit easier to handle? Would it provide you with the money needed to get medical care or prescriptions you need with a bit less stress? Would it allow you to stay in the home you’ve been in for so many years? The ability for the senior to simply stay in their home is often so comforting that just this one benefit alone provides so much peace of mind. Imagine if you can simple never have to worry about the value of your home, a mortgage payment you currently make or dealing with a physical move of all your personal belongings. At 65 or 70 or what ever age, a senior is looking to enjoy life, not be stressed by money or being forced to move from the home they love.



from WordPress http://ift.tt/1ge53tr
via IFTTT