How the Economic Crisis is Affecting Senior Homeowners
With the economic problems getting ever tighter and the value of homes dwindling one would expect seniors should be rushing off to sell their homes to meet up with expenses. When one however takes a close look, one might be surprised that wise seniors are not running around putting for-sale signs up. Many argue that this may be due to the fact that many seniors are stuck in the homes and getting buyers in this hard times is not so easy. The economic crises are still rampaging and so it is worth asking, how are some seniors coping even with the lowering value of their retirement accounts?
Many seniors would not want to sell their home even if they had a choice, for a number of reasons. The usual reasons or excuses (however you want to look at it) include the pride of retaining their homes which they see as a symbol of their life’s hard work and savings. Others includes, emotional ties to the home, the time and effort needed to move, the fear of the unknown and the fear of meeting up with monthly repayments.
Though seniors with the above reasons for not moving are not cushioned from the economic effects, they would gladly look at another alternative before considering a move. The answer for seniors within this category has been reverse mortgage loans. With a reverse mortgage loan they do not have to move out of their homes and do not need to worry about monthly payments.
Reverse mortgage loans are unique mortgage loans designed for seniors above 62 years of age. Once a senior meets the age criteria and owns their home outright or have very low pending mortgage balances they can opt for a reverse mortgage loan. With this loan they can reserve the equity on their home and access fixed regular income to cover their bills and needs. The seniors are also not required to repay the loan nor is there any risk of their losing the home as long as they reside in it.
During these hard times many seniors are rightly seeing reverse mortgage loans as the best option to retaining their homes and getting much needed income.
What about seniors who for their own reasons would have loved to move? Some seniors are not moving out of their homes now because the lack the financial power, and believe that they can’t find buyers or are waiting for the value to increase. Can reverse mortgage loans still put smiles on their phones? Well since January 1, 2009 the answer to that question is yes.
This is because FHA just released a new HECM loan for purchase product. This new loan, just like the regular reverse mortgage is for seniors who at least up to 62 years of age and own their home or have just a little mortgage amount left to pay off. With this new FHA insured HECM loan seniors can now purchase a new home and not need to bother with monthly repayments.
For a example if a senior owned a home valued at $200,000 looking for a home worth $250,000 a reverse mortgage loan for purchase would come in handy. By the time they sell the old home and cover closing costs, they would be left with about $186.000. They simply use an FHA reverse mortgage loan for purchase to cover the extra $89,035 and purchase their new home. The interesting part is that they do not need to move out, do not risk losing the homes and do not have to worry about making any monthly payments as long as they keep taxes, association and insurance fees current.
If you are senior who qualifies for a reverse mortgage loan you should take steps to join the group of seniors smiling during these hard times. All you may need to do now is educate yourself on reverse mortgage loans. The loans can help you retain or move out of your present home into a new one with minimum stress. Now is the time to consider booking an appointment with an approved HUD reverse mortgage counselor.
