Reverse Mortgages Help Seniors
By John Leu
[October 2019 | San Juan Silver Stage]
Americans are living longer—a real issue for millions who don’t have enough money saved to retire comfortably. The U.S. Census estimates there will be 75 million people older than 65 by 2030.
Longer life spans mean rising costs for housing, health care, and more. With declining employer pensions, retirees need options for meeting these expenses. A federally-insured Home Equity Conversion Mortgage (HECM) is a reverse mortgage that can provide a lot of financial flexibility.
Here’s another statistic. According to the National Reverse Mortgage Lenders Association, older Americans are flush with home equity- reaching a record total of $7.14 trillion in the first quarter of 2019.
For those individuals 62 or older, the HECM is a loan against that equity. HECM’s are designed to supplement income and savings when other resources aren’t enough. It can be a useful financial planning tool and a way to maintain an accustomed standard of living.
Funds from a HECM can be distributed as a line of credit, a lump sum, monthly payouts, or in a combination of those options. A reverse mortgage can also be used to purchase a retirement home as seniors relocate or “right-size” their primary residence.
Homeowners retain full ownership of their home, and the loan doesn’t come due until the borrower moves, sells the home, or passes away. Reverse mortgages do not require a monthly payment, but borrowers do have some financial requirements: they must pay their property taxes, homeowner’s insurance, and any HOA dues. They also need to perform basic maintenance of the home.
Education is the key—consulting family and your financial advisor can give you a good starting point. Additionally, education from a federally-approved consultant is not only required for a HECM, it ensures you receive unbiased information about Reverse Mortgages.
At Fidelity Mortgage, we meet many seniors who are seeking information on reverse mortgages’ options. Our goal is to inform borrowers about the loan programs available and provide access to educational materials, so they can determine whether a HECM is the right solution for their needs. We’re here to get you home; call us today for a free mortgage consultation. 970-252-7325. (Please see ad, page A-18.)