Reverse Mortgage
The Complete Guide to Reverse Mortgages: Turn Your Home Equity into Instant Income!
by Tyler Kraemer

This book was so helpful in informing myself and my parents as to the options available for them. It was easy to read and easy to understand. It gave many helpful hints and helped us figure out if a reverse mortgage was approriate for them.

It is essential if you or someone in your family is considering, or wants to learn more about, a reverse mortgage loan. It walks you through the process from borrowing to repayment in a conversational, easy-to-read format. You can read about real life situations that are very helpful for you to see how a reverse mortgage can work for you.

The book provides precise information on each of the types of reverse mortgages that are available. You will find information about the ways in which you can receive your payments, and all of the incumbent fees and costs that may come with this kind of loan are revealed. It outlines how to protect yourself and how you are already protected. Checklists are provided covering all the points to consider before making each decision, such as how to choose a lender.

     

Reverse Mortgage - Reverse Mortgage For Suckers

Reverse Mortgage * Reverse Mortgage For Suckers

Reverse Mortgages - Are They Only For Suckers?   
Felicity Walker

It sounds too good to be true- a home loan that you never need to pay back.

No monthly repayments, nothing - for as long as you're alive or live in your home. Welcome to a reverse mortgage - it may sound incredible, but that's basically what a reverse mortgage is about.

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More People Skipping Mortgage To Pay Credit Cards (Market Watch)
U.S. consumers are starting to look like a frugal, debt-fearing lot as they pay down billions of dollars in credit-card obligations. But an alarming trend is emerging: A small but growing number of people...

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Basically, reverse mortgages have been developed in recent years because of the "greying" of the population. People are living much longer lives, which means that many older people are barely surviving day to day, and yet are living in houses that over an extended period of time have risen enormously in value. It's a classic case of asset rich, cash poor.

The idea of a reverse mortgage is to give that elderly person a chance to use some of the equity in their home, and hopefully make life a little easier for them. It may give them the chance to perform much needed maintenance on their home, or perhaps buy a car or go on a holiday. The loan can be used to set up investments to help supplement their income.

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Seniors Cope With Social (in)Security Struggles (The Palladium-Times)
Sen. Charles Schumer, D-N.Y., announced recently that he is pushing for legislation that would provide a $250 check to Social Security recipients who were denied a cost of living increase in 2009.

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As most older people are no longer working, they were previously locked out of the mortgage market because they had little income. A reverse mortgage, however, doesn't require any monthly payments, and so the borrower's level of income is unimportant. Basically, instead of the borrower making a payment each month, the interest is added to the outstanding balance of the loan. Then, when the borrower dies or sells the house, the loan is paid out. Simple, and very effective.

You can draw the money from your reverse mortgage in a couple of different ways. You can draw down all the funds immediately, and so have a large lump of cash to invest or spend. Or, you can receive a monthly cash advance on the loan. So, for example, if you had a reverse mortgage of $50,000, you could draw down $1,000 a month for 50 months. That sort of cashflow could certainly make a difference to the lives of many elderly people.
Some reverse mortgages also operate like a huge credit account. Basically, you can withdraw an amount whenever it's required, rather than having any set arrangements. It's also possible to set up your mortgage with a combination of payout methods.

The important thing to remember is that no matter how you draw down the loan, you don't need to make any monthly repayments. In some ways, it's better to draw down the funds over time, simply because the interest that accrues against the loan will be lower to begin with. This means that the balance of the loan won't rise quite as quickly.
But don't get too excited unless you're at least 60 years of age - generally that's the minimum age at which you can apply for a reverse mortgage. Also, the older you are, the higher the percentage of your home's value that you can borrow. So at 60 years old you may only be able to borrow 15%, but at 70 years old you may able to borrow 30%.
As with anything that sounds too good to be true, there is a downside. With a reverse mortgage you are effectively spending the equity you have in your home, and not repaying it. That means that over time your equity will decrease. As time passes, the interest accrues more quickly, and the debt will rise faster. So if you're planning on leaving a nice little nest egg to your children when you pass away, that nest egg may be seriously depleted. It also means that if you need funds to buy into an aged care facility, your equity in your home will be much lower, which may restrict your choices.
Of course, there are always going to be exceptions to this. Some houses can rise in value fast enough to keep ahead of the loan, and so equity levels may remain the same or even rise. However it's always best to be prepared for the worst case (i.e. very little or no equity remaining) and also read all the fine print. If the fine print doesn't make sense, get your legal professional to explain it to you.
A reverse mortgage can be a wonderful way to improve the later years of your life, particularly if you're struggling to make ends meet each month. Just make sure you understand exactly what you're doing and how it works, and what effect the reverse mortgage will have on your equity in your own home over time.


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Index of Articles about Reverse Mortgage

What Other Authors say about Reverse Mortgage

The Disadvantages of Reverse Mortgages by Charles Kirkendall

A reverse mortgage can be an attractive option for many home-owning seniors that are having a hard time making ends meet. With a reverse mortgage, a senior homeowner will receive money for their home equity...

How To Buy A Home With A Reverse Mortgage by Imtiaz.s

A reverse mortgage loan is very much like a home equity loan. First we'll look at the similarities between the two and then let's discuss how to buy a home with a reverse mortgage. First a reverse mortgage...

Getting Equity Out Of Your Home for Retirement by Barry Waxller

What is the one thing you read over and over? Buy a home! The advice makes sense in this case as a home is a good long term investment. The question, however, is how do you get the money out when you need...

Creating Consider with Reverse Mortgages- A history lesson and paradigm shift by Angella Conrard

Who ever thought that it would make sense to get a mortgage that would decrease your home equity? Well in certain instances it does. Lending philosophies have changed over history and they will continue...

How To Choose The Right Type Of Mortgage by Bob Backstrom

A house is an important investment in your lifetime. Besides meeting your basic need of providing shelter, it can also provide you a source of cash if you have no other source of income. A loan taken to...

Everything You Need To Know About A Reverse Home Mortgage by Terry Edwards

Reverse home mortgages have risen in popularity as of late. They offer a great opportunity for the senior homeowner to get a loan against the equity of their home. What makes it more special is the loan...

What is a Reverse Mortgage Loan? by Brian Ankner

Reverse mortgages have increased in popularity in the past few years. Economist report that due to the increase in housing cost, the amount of money people are saving in their 401(k) and savings accounts...