If you are a senior citizen considering a reverse mortgage at this time, it is natural in case 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 within the stock markets today is unprecedented.
However, your fear is not really justified. Reverse mortgages and also the lenders which provide these are not part of the sub-prime credit crises.
This segment in the market failed to get involved in originating the risky loans that have created the chaos on Wall Street as well as the unprecedented variety of foreclosures on Main Street. Reverse mortgage lenders are certainly not at risk of being forced to take note of huge losses on their reverse mortgage loan portfolios. Therefore, if you require reverse mortgage Medford Oregon currently you must not be deterred by scary sound-bites on the nightly news.
The matter though, would be that the average person, especially seniors, are not differentiating between these two market segments. Recently We have heard several senior homeowners say things like; “I might never think about acquiring a reverse mortgage now, with everything that is going on.” Or “I can’t get a reverse mortgage now and risk my the place to find 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 control, the thought of getting a reverse mortgage at the moment, because the merchandise name has got the word “mortgage” inside it.
Firstly, reverse mortgages require no monthly installments or repayment of any sort, so long as the senior lives in the house.
Consequently, you could never lose your property to foreclosure for absence of payment. The fact is that many seniors have actually saved their properties from foreclosure by getting a reverse mortgage to change a regular forward mortgage they had difficulty making payments on. Providing you maintain your property and pay your premises taxes, your property is virtually foreclosure proof if you take out a government insured reverse home mortgage.
Secondly, should you get a HECM (Home Equity Conversion Mortgage) it is insured by FHA (Federal Housing Administration.) What this means for you personally, in light of the current bank losses and hedge fund failures, is that if your lender were to go out of business for any excuse, the FHA insurance fund steps in to make sure that you carry on and receive the money and benefits from your reverse mortgage.
One third safety feature of reverse mortgages, is that anyone considering obtaining this kind of loan must first complete HUD counseling. HUD counseling is supplied by FHA/HUD approved non-profit consumer credit counseling agencies which are not belonging to or connected to lenders. The counseling covers the advantages and disadvantages of reverse mortgages and highlights possible alternatives that seniors should consider rather than a reverse mortgage. HUD counseling is totally free towards the senior and may be conducted in person or by telephone. Seniors should have adult children, trusted advisors or anyone that may help making use of their decision, attend the counseling session also. Following the senior completes the counseling, a certificate is issued which must be shown to the financial institution before an application for any reverse mortgage can be processed.
Even though it is understandable that the public thinks that now could be not a good time to consider any sort of mortgage, it is actually definitely not true in the event the mortgage you are considering is a reverse mortgage. Actually, getting this type of loan sooner rather than later could actually be a benefit. This is because a vital ingredient in determining the amount of money you kbfshn receive from a reverse mortgage hinges on the level of equity you might have in your home. If your house is declining in value because of the current housing and credit crises, you will realize a lower benefit amount from the if your home is worth less down the road than today.
The end result is, don’t let fear or fear of the unknown prevent you from teaching yourself concerning this unique financial planning tool if you believe a reverse mortgage is one thing that may assist you. Furthermore, do not let friends and neighbors influence your final decision unless they may be experts on the topic. Education and solid facts are how to make a knowledgeable decision. Usually do not pay attention to rumors or nay sayers if you feel you might be able to enhance your lifestyle by getting a reverse mortgage.