Over the past 5 years almost 500,000 seniors have taken out Reverse Mortgages. And, it is with good reason. People often retire with sufficient funds to live on, but as time goes on a gap begins to develop between one’s available fixed retirement income and the cost of living.

With a Reverse Mortgage one can pay off an existing home loan, obtain up-front cash and also establish an interest-bearing line of credit all at once! Is life good, or what?

There are two basic types of Reverse Mortgages: Fixed and Adjustable. The fixed-rate option provides the most cash and you must take all of the cash at the time your loan closes. With the Adjustable option you can pretty much write your own ticket in that you can take up-front cash, monthly income or you can park your money within an interest-bearing line-of-credit – or any combination of the above.

Your specific needs will dictate which option is best for you.

The FHA (Federal Housing Administration) has recently introduced a “Saver” version of both basic types of Reverse Mortgages. The objective of the “Saver” option is to save you money up-front by reducing the mandatory FHA insurance premium from 2% to .01% of the loan amount. Your closing costs go down by almost 2%. The only drawback to the “Saver” program is that you receive less cash.

Let me show an example: if you own a home valued at $450,000 and owe $100,000 on a mortgage and you are 70 years old you would recieve almost $180,000 (with today’s interest rates) in cash after paying your mortgage. With the “Saver” option you would recieve $138,000 after the paying off of your mortgage. Similarly, with the Adjustable you also receive less money with the “Saver” program.

To wind up – if you need to maximize your cash out you would select the “Standard Fixed Rate” Reverse Mortgage. If you do not need much money at the present time – but anticipate needed funds down the line you should choose either the “Standard” or “Saver” Adjustable option. With each of these programs you “park” your funds within an interest-bearing line of credit and watch your funds grow over time.

I have had the pleasure of helping seniors with Reverse Mortgages for many years. I love the product and enjoy working with seniors. Indeed I am a senior myself! The Reverse Mortgage loan is not right for everyone, but for many people it is a lifeline to a better quality of life.

Please call or e-mail me at any time with questions. I would be delighted to help you obtain a Reverse Mortgage.

All the Best,

Bert Morrison

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