In case you are a senior citizen considering a reverse mortgage at the moment, it is natural in case 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 stock markets these days is unprecedented.
However, your fear is not really justified. Reverse mortgages and the lenders that offer options are not part of the sub-prime credit crises.
This segment of the market failed to get involved in originating the risky loans who have came up with chaos on Wall Street and also the unprecedented number of foreclosures on Main Street. Reverse mortgage lenders are certainly not at risk of needing to jot down huge losses on their own reverse home mortgage portfolios. Therefore, in the event 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, would be that the general public, especially seniors, are certainly not differentiating between these two market segments. Recently We have heard several senior homeowners say such things as; “I might never consider acquiring a reverse mortgage now, with everything else that is occurring.” Or “I can’t obtain a reverse mortgage now and risk my house to foreclosure in today’s’ market.”
Thinking this way is similar to throwing the child by helping cover their the bath water. Reverse mortgages are completely different from traditional conventional “forward” mortgages. A reverse mortgage along with a forward mortgage are not at all the same. You should not dismiss out of control, the idea of obtaining a reverse mortgage currently, because the merchandise name provides the word “mortgage” in it.
Firstly, reverse mortgages require no monthly installments or repayment of any kind, as long as the senior lives in your home.
Consequently, you can never lose your house to foreclosure for insufficient payment. The reality is that numerous seniors have actually saved their homes from foreclosure through getting a reverse mortgage to switch a regular forward mortgage they had difficulty making payments on. As long as you keep your property and pay your premises taxes, your home 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 personally, considering the recent bank losses and hedge fund failures, is that if your lender were to fall out of business for any reason, the FHA insurance fund steps in to make sure that you still get the money and advantages from your reverse mortgage.
One third safety feature of reverse mortgages, is the fact anyone thinking about applying for this sort of loan must first complete HUD counseling. HUD counseling is supplied by FHA/HUD approved non-profit credit counseling agencies which are not owned by or connected to lenders. The counseling covers the advantages and disadvantages of reverse mortgages and highlights possible alternatives that seniors should think about rather than a reverse mortgage. HUD counseling is totally free towards the senior and may be conducted personally or by telephone. Seniors ought to have adult children, trusted advisors or anyone that may help with their decision, attend the counseling session too. Right after the senior completes the counseling, a certificate is issued which must be presented to the lending company before an application to get a reverse mortgage may be processed.
Even though it is understandable that most people thinks that is now not a great time to take into consideration any sort of mortgage, it is certainly not true when the mortgage you are considering is actually a reverse mortgage. In fact, getting this sort of loan sooner rather than later could really be a benefit. This is because an important ingredient in determining the amount of money you kbfshn receive coming from a reverse mortgage hinges on the amount of equity you may 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 lesser benefit amount from the if your property is worth less down the road than it is today.
In essence, don’t let fear or anxiety about the unknown prevent you from educating yourself about this unique financial planning tool if you believe a reverse mortgage is one thing that can help you. Furthermore, tend not to let friends and neighbors influence your final decision unless they may be experts on the topic. Education and solid facts are steps to make an informed decision. Tend not to listen to rumors or nay sayers if you believe you could possibly boost your lifestyle by acquiring a reverse mortgage.