Feed: Reverse Mortgages and Senior Retirement Tips - AggScore: 73.6

AARP - Inside E Street - Discusses Reverse Mortgage

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"AARP - Inside E Street," is a half hour talk show featured on Retirement Living TV, the only network dedicated to adults 50 and older. The weekly program delves into issues that impact health, financial security and retirement. Each week, "AARP - Inside E Street" host, Sheilah Kast, investigates important issues before congress and state legislatures and discusses hot political topics of the day that affect retirees and senior citizens.

This week's show topic is reverse mortgage. The segment includes interviews with Judy Biggert, Illinois Representative and Massachusetts Representative, Barney Frank both of whom say a reverse mortgage as a positive financial tool for many seniors, particularly in today's economic environment.

You can watch the entire show below.

Seniors Could Get Another $250.00 Stimulus Check

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If the Obama administration gets its' way, 57 million seniors could be getting another $250.00 check from the government. If approved, the proposal calls for a one-time lump sum payment scheduled for sometime next year.

The justification for the $250.00 check for seniors is due to the fact that there will be no cost of living raise for Social Security recipients next year because there was no increase in inflation. This will be the first time since 1975 that Social Security benefits have not increased. This is a stark contrast from last year's increase, which was one of the highest on record at 5.8 percent.

$250.00 per recipient is equivalent to approximately 2 percent of the annual benefit for the average Social Security retiree. The proposed payments will also be paid to Supplemental Security Income recipients, Veterans, railroad retirees and government retirees.

The administration is not calling this proposed payment another "stimulus" package but instead they refer to it as an "economic recovery payment." According to Richard Fiesta, director of government and political affairs at the Alliance for Retired Americans in Washington, "The extra $250.00 is sort of in lieu of COLA, (cost of living adjustment) and we hope it will be enacted soon."

Economists say that a second round of $250.00 checks to folks that are primarily on fixed incomes will give a temporary boost to the economy, while other analysts worry that sluggish consumer spending could derail the economic recovery.

It remains to be seen how quickly, or if at all, the $250.00 proposal will be enacted. Partisan wrangling in Congress continues as usual, with even relatively uncontroversial bills such as extending jobless benefits for three more months, being held hostage by never ending bickering over ideology.

HECM Reverse Mortgages Suffer Big Blow From HUD

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HECM (Home Equity Conversion Mortgage) reverse mortgages have suffered a big blow by Congress and HUD this week. HECM loan limits will be slashed by 10%, effective October 1, 2009.

In the face of declining home values nationwide, decimated stock market portfolios, and the weakest economy since the Great Depression, HUD announced that they are cutting loan limits on all HECM reverse mortgages by 10%. The announcement was made September 23, 2009 in their mortgagee letter 2009-34.

This is highly disappointing news for senior homeowners that are barely eligible to qualify for HECM reverse mortgages, due to property values versus outstanding mortgage debt. If you happen to be one of those people that is boarder line on having sufficient equity in your home to qualify, it's quite possible that after October 1st, you will no longer be eligible for a HECM loan, unless you have the ability to contribute some of your own money to the closing.


Leaves Us Scratching Our Heads

It's puzzling to many of us, how Congress and HUD could embrace a 10% reduction in lending limits to senior citizens during such a vulnerable economic time. There is abundant evidence that many closed HECM reverse mortgages have rescued countless seniors from foreclosure and saved their homes through the use of HECM reverse mortgages.

This move, will no doubt be devastating for many senior homeowners that were in the process of considering a reverse mortgage loan, but simply had not made the commitment to act on it in time.

Combine the 10% reduction in lending limit with the expiration of the temporary HECM maximum loan amount of $625,500. reverting back to $417,000. at the end of this year, and once again, we are witnessing a perfect storm in the making.

If you need more information about how this effects your eligibility, please feel free to contact us today.

AARP Reverse Mortgage - Five Things To Consider

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AARP has worked tirelessly with HUD to improve consumer protections and safeguards for FHA insured reverse mortgages, commonly referred to as HECM (home equity conversion mortgage) reverse mortgages. AARP has authored an extensive array of great reverse mortgage consumer guides as well as short reports and tips to assist seniors in making the right decision when considering a HECM reverse mortgage.

One AARP reverse mortgage report is entitled: "5 Questions To Ask Before Considering A Reverse Mortgage"


The Five Questions Covered In The Report Are:

* Do you really need a reverse mortgage?

* Can you afford a reverse mortgage?

* Can you afford to start using up your home equity now?

* Do you have less costly options?

* Do you fully understand how these loans work?


Here is the link to the AARP reverse mortgage report.

As always, AARP is doing its' best to educate you and make sure that you proceed with caution if you are considering a reverse mortgage. Reverse mortgages are not the end all and be all for everyone. But for those that they are right for, they can be exactly the appropriate financial tool to help sustain a comfortable lifestyle during retirement.

HECM Reverse Mortgages Could Be The Answer

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As a result of the stunning loses experienced by many seniors all ready in retirement and relying on fixed incomes, it has been increasingly necessary for many retirees to take a serious look at tapping into home equity through the use of HECM (home equity conversion mortgage) reverse mortgages in order to replace lost dividend and investment portfolio income.

HECM reverse mortgages are government insured loans that allow seniors age 62 and older to receive monthly income based on the amount of equity in their homes. The current financial meltdown could be the reason that government reverse mortgage production has increased nearly 20 percent over the same period last year.

For older Americans who intend to stay in their homes long-term, HECM reverse mortgages could very well be the financial vehicle they need in order to sustain their cash flow during their retirement years.


Qualification Is Easy

This can be a very attractive choice because there is no repayment required on HECM reverse mortgages as long as the seniors remain in the home as their primary residence. There are also no income or credit qualifications in order to be eligible for a government reverse mortgage.

If you or a family member would like additional information about HECM reverse mortgages, please contact us by clicking below or call our office at: 1-888-269-1098

Planning For Retirement - Has The Model Changed?

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The foundation for a solid retirement plan has traditionally been characterized as a three-legged stool. The three legs are pensions, Social Security, and personal savings. However, recent financial trends suggest that the three-legged stool approach may becoming less reliable.

The savings rate for Americans has significantly declined sine the 1980s. It reached its lowest level since the Great Depression in 2004. Recently, however, it has been gradually trending upward. (Probably out of fear and devastating investment and asset loses.)


Exacerbating the savings shortfalls is the near elimination of defined benefit plans by corporate America. This reality leaves many Americans facing a retirement with less guaranteed income.

As the cost of living continues to rise, many retired Americans find it hard to make ends meet. To maintain their standard of living, some older homeowners are beginning to turn home equity into monthly income through a reverse mortgage home loan. This approach is gaining momentum and is just now starting to be explored by financial planners and financial advisers. It is becoming obvious that a new paradigm is emerging as a result of the greatest loss of wealth since the 1930s.

Researchers estimate that close to 78% of older households do not have sufficient assets to sustain them through retirement. Baby Boomers are also concerned about their ability to maintain their standard of living as they get older. People that expect inadequate or unreliable retirement income are more likely to plan to use a reverse mortgage home loan as a vehicle to access home equity in later life.

If you are one of those people that are stressing over how to supplement your retirement income, you may want to find out how much of your home equity might be available to you from a reverse mortgage home loan. Ask for your personalized reverse mortgage loan quote today.

HECM Reverse Mortgages - Quick Overview

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Although HECM (home equity conversion mortgage) reverse mortgages have been in existence for more than 20 years, the general public still finds them a bit mysterious. They actually are not that difficult to understand, once you start grasping the basic facts about how they actually work. Once you have an understanding of the basics, you will be able to determine whether HECM reverse mortgages are worth considering for your situation.


Facts At a Glance

*You retain title to your home. The bank does NOT own your home and
the bank does not get your home after you pass away. Your home remains part of your overall estate and can be passed to your heirs.

* The are NO monthly mortgage payments required.

* You do not have to repay the loan as long as you live in your home.

* The money you receive from your home is TAX-FREE.

* The money can be used for whatever you like...no restrictions.

* The money you receive does not affect your Social Security or Medicare benefits.

* HECM reverse mortgages are often times used to pay off an existing mortgage balance.

* Reverse mortgage loans can substantially improve the quality of your retirement life.

* You or your estate are never financially responsible if your home is worth less than the balance of your reverse mortgage at the time you permanently leave your home.

* HECM reverse mortgages are considered "non-recourse" loans, meaning that the home stands alone for the debt.

* You can buy a house with a reverse mortgage and never make a monthly mortgage payment on the new house as long as you live there.

* HECM reverse mortgages do not require credit, income, or medical qualifications.

* All owners on the title to the home must be a minimum of 62 years old.

* The home must be your primary residence.

* HECM reverse mortgages require substantial home equity, usually at least 40% or more.


Now that you have glanced over the basic facts, you may wish to find out if you qualify for one of the HECM reverse mortgages that are currently available. Just click the button below for your personalized reverse mortgage quote.

HECM Reverse Mortgage Calculator

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A HECM reverse mortgage calculator is needed in order to determine how much money you can borrower against the equity in your home using an FHA insured HECM reverse mortgage.

We often hear the question; "What is the maximum loan-to value for a reverse mortgage?" The problem with that question is that it cannot be answered with a straight forward percentage amount.

A reverse mortgage is a difficult concept to grasp. It's different from a traditional mortgage in so many ways, not the least of which is calculating the maximum loan amount.

A reverse mortgage calculator is programmed with a complicated mathematical algorithm that is constantly changing as market interest rates fluctuate. Additionally, each reverse mortgage loan amount must be custom calculated to fit the age of the specific borrowers. The borrower's ages along with the current interest rates and the market value of the home, must be input into a reverse mortgage calculator before the maximum loan amount can be determined.


Online Reverse Mortgage Calculator - Strictly an Estimate

If you are trying to get a ball-park idea of whether you have enough equity in your home to qualify for a HECM reverse mortgage, you can use this reverse mortgage calculator WITHOUT OBLIGATION! You will not be required to fill out a contact form or provide your contact information before you can use our reverse mortgage calculator.

Many online sources for HECM reverse mortgage loans will not allow you to access their reverse mortgage calculator tool without first registering or filling out a contact form, (which of course means that you will be contacted whether you intended to be or not.)

Our reverse mortgage calculator is updated whenever interest rates change. However, it is important to know that our reverse mortgage calculator results are not a commitment to make a specific loan. It is simply a starting place so that you know generally if you are eligible and approximately how much of a loan you might be able to get.

If you like the numbers that you see after you use our reverse mortgage calculator, your are welcome to request a more comprehensive and personalized HECM reverse mortgage quote and summary. The summary will be customized specifically for you, based upon your home value estimate and your age. It will also provide you with a detailed cost breakdown and an amortization schedule so that you will have a glimpse into the future, if you decide to access your home equity through a HECM reverse mortgage.

Request your personalized HECM reverse mortgage quote here.

HECM Reverse Mortgage Interest Rates

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Below are the interest rates for HECM reverse mortgage loans effective August 18, 2009. This week's rates are unchanged from last week. Seniors will receive the same initial loan benefit amount that they would have received last week.

AARP-HUD Approved Reverse Mortgage Counseling

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Anyone interested in applying for a HECM (home equity conversion mortgage) reverse mortgage loan must first complete mandatory reverse mortgage counseling and obtain a counseling certificate of completion. The reverse mortgage counseling certificate is valid for 6 months. AARP-HUD approved reverse mortgage counseling is a highly recommended resource for obtaining your required reverse mortgage counseling certificate.

The borrower must provide the reverse mortgage counseling certificate to whatever lender he or she chooses to use to obtain the reverse mortgage loan. The lender is not allowed to begin the application process until the borrower presents them with a reverse mortgage counseling certificate of completion.


Is Reverse Mortgage Counseling Really Necessary?

Reverse mortgage counseling is one of the safeguards that HUD implemented to insure that reverse mortgage borrowers and their families have a full understanding of the pros and cons of a reverse mortgage loan. HUD worked closely with AARP and other groups when designing the criteria for the reverse mortgage counseling sessions as well as the training program for the HUD certified counselors.

Because of AARP's involvement in setting up the criteria mentioned above, it is understandable that some of the best qualified counselors can be contacted directly through AARP Reverse Mortgage Counseling offices. The toll free number for AARP reverse mortgage counseling is - 1-800-209-8085.


You can read more about AARP Reverse Mortgage Counseling here.

HECM Reverse Mortgage Counseling Protocol

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The Federal Trade Commission (FTC) is recruiting the assistance of HUD approved HECM Reverse Mortgage Counseling agents to help them in their efforts to detect fraudulent and misleading offers relating to FHA reverse mortgage lenders and loans.

While conducting the required HECM reverse mortgage counseling session, the FTC is asking reverse mortgage counselors to look and listen for false or misleading claims relating to reverse mortgage offers that the borrower may have received. They are asking HUD reverse mortgage counselors to be on the alert for unscrupulous lenders that may try to mislead potential reverse mortgage borrowers about the key features of this type of loan.

When reviewing the paper work provided to the borrower from the reverse mortgage lenders, the counselors are being asked to look closely at the key features of the loan, like the interest rate, fees, loan payments and total reverse mortgage costs. If they see a large discrepancy between the terms being offered and what would typically be offered, the counselors are advised to view this as a sign of possible deception, and request permission from the borrower to report it to the authorities.


Keep an Eye Out For Intentional Misrepresentation

Other areas of concern that the HUD reverse mortgage counseling agents are being asked to be on the alert for are; company names, logos, seals and other representations of the lenders' that may give the impression that the lender or broker are affiliated with a government agency or a government program.

The counselors are being asked to inquire whether the borrower has been pressured in any way to use their reverse mortgage loan money to buy other products or services such as an annuity, long-term care insurance, home improvements, or investments. The FTC's concern is that some reverse mortgage lenders may try to convince senior borrowers to get this type of loan just so that the borrower will have the ability to purchase other products that they are selling in addition to reverse mortgages.


The FTC Business Alert can be read in its' entirety here.

Retirees Unable to Sell Their Homes and Downsize

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The worst economic crisis since the Great Depression is taking its' toll everywhere you look these days. One segment of the population - retirees, are finding themselves stuck in their homes. Many, had planned to sell the "large family home" for a substantial profit and downsize to a home or community that would be more suitable for their golden years' lifestyle.

One component of the retiree's previously well thought-out plan, may have been affording to live in an assisted living community or having in-home-care assistance. For many, those things are now simply unaffordable and unobtainable. Home values have declined across the country, and in some areas drastically declined, (i.e. Florida, California, Nevada, Arizona, Michigan, Ohio.)

Seniors are not able to sell their homes for anywhere near the values that their homes were just a year or two ago. Furthermore, if they are willing to list their homes at drastically reduced prices, many are still not selling or even receiving any offers. Consequently, many senior citizens are trapped in their homes. They are not able to access their home equity through a sale, and the sale if it did take place, would yield far less profit to feather their retirement nest egg than they had planned.

One thing that a senior homeowner can do is, get a reverse mortgage. A reverse mortgage home loan allows seniors, 62 years or older to tap into the equity that still remains in their homes, without ever having to make any monthly mortgage payments for as long as they live in the home. The money they get from a reverse mortgage can be used for whatever purpose they choose. So, if in-home-care is a priority, then at least through this financial tool they might be able to afford it.

Find out if you still have enough equity left for a reverse mortgage loan.

Or use our reverse mortgage calculator.

Free Reverse Mortgage Counseling

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Two major credit counseling agencies that offer HECM (home equity conversion mortgage) reverse mortgage counseling for senior homeowners considering getting a reverse mortgage loan, have announced that they will offer reverse mortgage counseling for FREE.

The usual fee for reverse mortgage counseling is $125.00 and is normally required to be paid by the reverse mortgage borrower. Lenders are not allowed to pay for reverse mortgage counseling on behalf of the senior borrowers. For some seniors, this is a financial hardship.


The Good News Is

Good news for reverse mortgage borrowers was recently announced by NCOA (National Council on Aging) and MMI (Money Management International.) Both of these organizations are now offering reverse mortgage counseling at no charge to senior homeowners applying for a reverse mortgage loan.

Both of these agencies have counselors that are certified by HUD and AARP to conduct reverse mortgage counseling in order to assist older homeowners in evaluating the pros and cons of getting a reverse mortgage loan.

Reverse mortgage counseling is a mandatory requirement for all FHA/HECM, government insured reverse mortgage loan applicants.

Find out more about AARP HUD Reverse Mortgage Counseling here.

Providing Financial Assistance to Aging Parents

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Over the weekend The Wall Street Journal Report with Maria Bartiromo, aired an interview with Andy Cohen, CEO and co-founder of Caring.com. During the interview Mr. Cohen highlighted the challenges that many baby boomers are struggling with while providing care and financial aid to aging parents.

Currently, 45 percent of adult children in the U.S. are providing financial assistance to their aging parents. Mr. Cohen cautions that there are three major mistakes that people routinely make while helping their parents.

1. Not maximizing all the entitlement benefits that their parents are eligible for. Caring.com provides access to a "benefits check-up" which accesses 1600 sites to check for various benefits or entitlements, that your aging parents might be eligible for.

2. Not spending parent's assets before contributing their own, such as using life settlements, a reverse mortgage, or the parent's retirement savings. Cohen says for tax reasons this approach is advised, even though it's a tough conversation to have with aging parents, especially if the parent feels strongly about leaving an inheritance.

3. Not having all the legal documents in place in order to manage aging parents' health directives as well as make financial decisions for parents.

Reverse Mortgage Money Can be Distributed Several Ways

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Reverse Mortgage borrowers are offered several choices of how to take the cash distributions from a HECM (Home Equity Conversion Mortgage) reverse mortgage loan. Each borrower is able to make this decision for themselves, unless the entire reverse mortgage home loan amount is required to payoff an existing "forward" mortgage balance on their home.

For this discussion, let's assume that most or all of the reverse mortgage loan proceeds will NOT be needed to payoff a current mortgage debt. In this case, the borrower has five options for how to receive the money from the reverse mortgage home loan.

• Tenure - Equal monthly payments as long as at least one borrower continues to live in the home as a primary residence.
  
• Term - Equal monthly payments for a fixed period of months that the borrower selects.
  
  
• Line of Credit - Unscheduled payments or installments, at times and in amount of the borrowers choosing, until the line of credit is depleted.
  
• Modified Term - Combination of the line of credit option plus monthly payments for a fixed period of months, selected by the borrower.
  
• Modified Tenure - Combination of a line of credit with monthly payments for as long as the borrower remains living in the home.
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Understanding these options and then making a selection that will be the right choice, is sometimes confusing and a bit intimidating for some borrowers. However, one of the GREAT things about the government insured reverse mortgage is that at anytime during the course of the loan, a borrower can call the loan servicer and request a change to the way he/she receives the reverse mortgage home loan benefits.

The borrower is not locked in forever. So when "life happens" and circumstances change, this type of loan comes with the flexibility of easily making a change to the way equity is paid out.

Request a complimentary reverse mortgage loan quote today. It will be customized to suit your individual specifications.