Reverse Mortgages are Growing Fast
More and more senior home owners are seen to be taking up reverse mortgages across the country. The number of reverse mortgages is hitting a new high since last month. The HECM (home equity conversion mortgage) program allows senior home owners aged 62 and above to take cash out of the equity in their homes without needing to make any mortgage payments.
During February 2009, a record number of 11,261 reverse mortgage loans were taken. The recent increase in the ceiling limit for reverse mortgage from $417,000 to $625,500 has allowed more seniors to apply for reverse mortgage loans.
Seniors see reverse mortgages as an important source of income that can replace stock market investments returns. Seniors are willing to take reverse mortgages to avoid the foreclosures and continue to live in their own homes. They get additional income through reverse mortgages to pay the bills and meet the daily expenses.
The reverse mortgage loans are kind of attractive to seniors because they need no proof of income or credit report, and the borrowers do not have to make repayments while they continue to live in the same home.
The FHA (Federal Housing Administration) is now insuring the reverse mortgage loans up to $625,000, an amount double that of last year’s. The eligibility for reverse mortgages is based on owner age, life expectancy, value of property, etc.
When the home owner passes away or sells the property, the reverse mortgage lender gets the money, and any remaining money goes to the heirs or the estate of the senior.
Nationwide, reverse mortgages are becoming more and more popular, taken by seniors to meet their needs for daily expenses.
