Juhani Tontti asked:




The biggest figures came from California, Florida and Arizona. The senior American, who cannot pay their mortgage loan payments, the special loan called a reverse mortgage can offer a great help, because by taking a reverse mortgage loan, they can avoid the monthly payments of the loan.

1. When The Foreclosure Threatens, Act Quickly.

The home foreclosure is a very serious thing. It will drop the credit score by 250 or 300 points for 10 years. Additionally a senior will lose the home. So there is so much on stake. If the reason, why a senior cannot pay the mortgage loan, which has been taken against the home equity, is the lack of the monthly cash, the reverse mortgage loan offers a real help.

If the mortgage loan payments are 3 months behind, you really must act quickly and take contact with your lender. When the initiative comes from the borrower and he has a suggestion, how he is going to solve the financial problem, the lender will do his best to avoid the foreclosure process.

The idea is to pay away the usual mortgage loan with the reverse mortgage and in this way to avoid paying the monthly back payments. If this is enough to carry a senior over his financial troubles, then it is worth taking the reverse loan.

2. Who Can Qualify?

The idea is to take the reverse loan against the equity of the home. So there must be enough equity left. This means, that the credit score nor the income level of a senior has no meaning, they are not even asked. The only requirements are, that a senior is at least 62 and the owner of the home, where he has equity left.

3. What Is The Real Help?

The real help to a senior is, that with the reverse loan he can turn a part of the home equity into cash money and in this way to avoid losing his home and a good credit information. When he has paid the mortgage loan for years, it is fair to use a part of it to save his rest life. And he will stay as an owner.

4. How Many Borrowers Are Allowed?

A couple or maximum three persons are accepted as the borrowers. They have not to be relatives to each other, but all borrowers must be the owners of the home and to use it as their permanent home. Of course all must fulfil the qualifications, i.e. to be American and at least 62.

5. From Where Can A Senior Get Help.

The U.S.Government has organized this in a great way. There are lots of federal counselors all over the country. These counselors are not in the payrolls of the lenders, but they are independent and thus free to give guidance to seniors.

Raul

Jayson asked:


The term ‘reverse mortgage loan’ is not particularly descriptive of the kind of financing involved. It implies that the homeowner is lending money to the mortgage company.

With a regular mortgage, the usual pattern works like this: the total price of a property is $100,000. Of this amount, let’s say $10,000 (10%) is put down by the prospective homeowner – the other $90,000 is supplied by a bank or other financial institution. Then, over a period of 15 to 40 years (depending on the loan term), the homeowner pays back the $90,000 in regular monthly payments including interest.

With a reverse mortgage loan, a homeowner with equity in their home or who has paid off their existing mortgage, requests a cash sum from a lending institution. The big difference from a regular mortgage is that there are no monthly payments involved. In fact, there are no payments during the homeowner’s lifetime; the total loan amount is paid back only upon the death of the homeowner. This amount will also include interest accrued over the lifetime of the loan.

There are several ways in which the homeowner can enjoy the benefits of a reverse home loan. He or she can take out a single lump sum in cash, or alternatively, a regular monthly cash advance. Another option is to use the available loan as a line of credit and use it as needed; a homeowner could also choose to combine some of the options above.

Reverse mortgage loans can be of particular help to many older Americans who may be poor in terms of available savings or monthly income, but who are wealthy in terms of the equity that has built up over the years on their real estate property. For example, if a person is retired and purchased their house 30 years ago for $10,000, they have paid off their mortgage and the house is now valued at $100,000. They could take out a reverse home loan and have access to much of that equity, with no monthly payments.

Therefore, unlike a regular mortgage, with a reverse mortgage, such things as credit score and income are not particularly relevant as there are no monthly payments involved. Obviously, these loans are generally made to senior citizens who can use the equity in their home to help finance them on a monthly basis, or perhaps to pay off their medical bills, or maybe even to travel the world.

These reverse mortgage loans are usually tax-free and are officially known as ‘Home Equity Conversion Mortgages’ or HECMs. They are backed by HUD (The Department of Housing and Urban Development). This kind of loan can also be obtained from private institutions such as banks and many other mortgage lenders, who are not backed by HUD.



HARRIS