The Reverse Gear - Reverse Mortgages More Appealing & Affordable

GETTING credit is no simple task these days, even under the best of circumstances — just ask anyone who has applied for a mortgage. But it can be even more problematic for those who are retired, with many facing the triple whammy of declining income, falling home values and dwindling savings from Wall Street’s meltdown.

Looking for a way around the continuing credit crunch, more older people are exploring reverse mortgages, which allow homeowners 62 or older to borrow against their equity.

The Sunday, March 15, 2009, New York Times discusses the new interest in reverse mortgages as an alternative to conventional mortgage refinancing. A sidebar sums up the program:

• They can help older homeowners who are house-rich but cash-poor, allowing them to remain in their homes indefinitely, and even finance their retirement.
• Borrowers convert the equity in their homes into cash while retaining ownership. The reverse mortgage does not require monthly payments. It’s usually repaid when the house is sold or the borrowers move out.
• Borrowers must be at least 62 years old and own their home as their primary residence.
• The sole financing source right now is the Federal Housing Administration, an arm of HUD.
• Several factors determine how much can be taken out, including the age of the youngest borrower, current interest rates and property value.
• There are several options on getting your money. Borrowers can choose to be paid all at once, in a lump sum of cash; through a monthly cash advance; through a line of credit to be taken out at any time; or via a combination of these methods.
• Fees are steep, running from $7,000 to $20,000, which is why many financial advisers consider reverse mortgages a financing source of last resort.

To read the full story, go to The Reverse Gear.

Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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