Senior reverse mortgage

The dilemma that is faced by senior people in the United States and the world over is on what will happen to them after retirement.  They have genuine fears about their future state, thanks to rising oil prices, insecurity and of course, being abandoned by the state and their children.

The state had to protect them.  Through several efforts to amalgamate the commercial securities available in the market, the senior citizens reverse mortgage was discovered.  Ted Butler, a senior reverse mortgages and securitization adviser, observed that American senior citizens are living longer and healthier lives and that reaching retirement age no longer necessarily means growing weak.

Financial security and reverse mortgages for seniors

Any form of security can help to ensure that the lives of citizens is well lived. For senior citizens, financial security is even better.  It is an important player in determining a better quality life.

The US Department of Housing and Urban Development (HUD) and other affiliated Government agencies extend services that range fro advisory to regulation of the senior reverse mortgage sector.
The difference of this from a conventional mortgage is that, in a reverse mortgage, the home owner makes no payments and all interest is added to the lien on the property. If the owner receives monthly payments, then the debt on the property increases each month.

How senior is senior?

Anyone who has attained the age of 62 years and above is considered a senior in most of the Jurisdictions that offer reverse mortgages to their populace.  Age is the major factor considered by major lending institutions.  In fact, the higher the seniority, the higher the chances of accessing the loan.

Home Equity Conversion Mortgages (HECM) loans are the most popular type of reverse mortgage.  It may be important to know the meaning of home equity at this stage.  This is the amount remaining after the property’s worth has been calculated against what it owes banks and other lenders.

The lender will gauge the level of home equity and determine the value of money that can be advanced.  The senor citizens have power too.  They will choose these fro a variety which includes lump sum payments, credit line, monthly payment or a combination of the above. 

Wisdom is essential in this exercise for the simple reason that if one chooses a system that is not favorable it may mean misuse of money leading to eventual desolation.

A senior will also be in a position to elect how he/wants to use the money.  Normal choices are usually home repairs and maintenance, healthcare and day to day subsistence.

Control and guidance

There are several organizations tht offer advice on how to handle these loans.  These include HUD accredited agencies and other non profitable organizations.  It may be important to advice potential senior citizen applicants of the need for thorough ground review.

Subsequent mortgages using the same property

If a property has increased in value after a reverse mortgage is taken out, it is possible for a senior to acquire a second reverse mortgage over the increased equity in the home. But in certain countries (including the United States), a reverse mortgage must be the first and only mortgage on the property. (www.wikipedia.com)

Refernces

1. http://www.senior-reverse-mortgage.blogspot.com - Ted Butler
2. http://www.wikipedia.com – Reverse mortgages