Reverse Mortgage Opportunities 2012

Economic consultants are advising consumers that the 2012 housing market is showing indications that it is climbing out of its plunge of the 21st century’s first decade. This means that the economic climate offers good opportunities for people who want to apply for a mortgage. This advice includes Home Equity Conversion Mortgages (HECM) options, also called “Reverse Mortgages.” Interest rates are low and the Federal Housing Administration has extended the 2011 lending limits through 2012, creating a prime opportunity for seniors to obtain ready cash against the value of their home.

Reverse Mortgages are available to seniors, aged 62 or older, who wish to obtain a cash payment, monthly payments or a line of credit against the value of their home. The lending institution which holds the mortgage can take possession of the home only when the borrower(s) are no longer living in the home. Borrowers agree to accept responsibility for the HECM mortgage’s origination costs and normal house expenses, including home insurance, upkeep and property taxes. In exchange, the cash that the borrower(s) receive can be put towards normal living expenses, travel or even providing financial assistance to children.

This advice comes with the recommendations that borrowers carefully research the Reverse Mortgage program and the pros and cons of the loan. Individuals who are considering taking out a Reverse Mortgage should consult with qualified professionals who can provide needed guidance for people who are trying to navigate the world of real estate.

The conditions of a HECM loan include a regulation mandating that borrowers participate in a counseling session with an HECM-approved counselor who will provide them with all the information about the loan, its benefits and its obligations. In addition, potential borrowers should speak to other seniors who have taken out an HECM loan, representatives of different lending institutions and perhaps even a real estate lawyer.

In addition, experts advise that potential borrowers make sure that they know their credit profile. Borrowers who have a good credit score can often negotiation better terms for the Reverse Mortgage. Even if the credit history is problematic, borrowers may be able to explain the reasons for the difficulties and reach a deal for better terms for their Reverse Mortgage.

To access a credit score as the first step in negotiating HECM terms, borrowers should click into the AnnualCreditReport which is operated by the three credit reporting bureaus (Equifax, Experian and TransUnion) to obtain a free copy of their credit report. All individuals are entitled to such a free report once every 12 months.  Then the borrower can either use the report to demonstrate responsible credit history or delay the mortgage while he improves his credit score. Either way,  HECM borrowers must know where they stand vis-à-vis their credit history before they apply for a Reverse Mortgage.

In short, 2012 offers many opportunities to make wise real estate choices for individuals who have the correct data and know their Reverse Mortgage responsibilities, rights and options.