Financial Solutions for Aging-In-Place
Generously Shared By: Andrew Wallace & Bill Krone
Finance of America
One option to remain independent, stay in your home and make affordable some technology tools that meet your needs, is a Home Equity Conversion Mortgage (HECM) otherwise known as a reverse mortgage. Whoa! Hold on there you are saying to yourself aren’t reverse mortgage bad. I’ve seen few things in my life as misunderstood or poorly understood as reverse mortgages, and the more I’ve learned about them, the more impressed I’ve become. I’ve come to realize that reverse mortgages aren’t just for people in some sort of financial trouble, in fact I think just about every homeowner over 62 could use a reverse mortgage to achieve something important in their lives.
First, when qualifying for a reverse mortgage your FICO score is irrelevant… it doesn’t matter at all. Secondly, taking out a reverse mortgage does not mean that you lose your home after you die, or that you won’t have anything to leave to your heirs. With a reverse mortgage you retain title to your home and continue to be responsible for paying the property taxes and insurance, but you aren’t required to make any payments of principal or interest on the loan… unless of course you want to… in which case you can.
The proceeds you receive from a reverse mortgage are not taxable, nor do they affect your Social Security or Medicare benefits in any way.
In fact, there’s really nothing scary or risky about reverse mortgages; and, if you’ve heard things like “they’re expensive,” which is what I had heard… well, in my opinion they’re just not. When you compare a reverse mortgage’s costs to other types of loans, there’s just not all that much of a difference.
I think the primary reason that many have heard negative things about reverse mortgages in the past comes from the days before they were so closely regulated… they are almost exclusively under the purview of the U.S. Department of Housing and Urban Development or HUD, for short. Like all mortgage products, the way they are marketed and sold can make any type of loan a “bad loan,” so it’s always important to be doing business with reputable lenders.
Today’s reverse mortgages, at least many of them, are known as Home Equity Conversion Mortgages (HECMs), and their remarkable flexibility makes them a source of cash that can be received and used in all sorts of ways.
Nothing else lets you go so far forward, while staying in reverse.
I can’t think of anything that’s anything like a reverse mortgage. And the more I think about how they work and can be structured, the more uses for them come to mind. And in a world where home equity lines of credit are difficult if not impossible to get… the idea of an open line of credit that you can tap into as you see fit for any reason and at any time, but that you never have to make a payment on…well, why wouldn’t just about every single qualified homeowner want to have access to something like that whether they needed it or not? I mean, it can’t be a bad thing to have an open credit line that never requires you to make a payment on borrowed funds, can it?
A study by AARP revealed how homeowners feel about having a HECM:
94% reported that the HECM has “given them peace of mind.”
89% said the HECM has “helped them have a more comfortable lifestyle.”
87% said that the HECM “improved their quality of life.”
79% reported that the HECM “helped them remain at home.”
If you’d like further information or want to discuss how a Home Equity Conversion Mortgage can be the solution for you, contact Andrew or Bill at:
FINANCE OF AMERICA
Andrew Wallace
Mortgage Advisor / Reverse Mortgage Specialist
NMLS – 150660
c: (602) 826-7340
andrew.wallace@financeanceofamerica.com
Bill Krone
Mortgage Advisor | Reverse Mortgage Specialist
NMLS-199750
c: (602) 790-4309
bill.krone@financeofamerica.com
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