Be a Happy Senior - Reverse That Mortgage

If you are a senior citizen (age 62 years old or

older) and you currently own your own home, it is

possible that you may want to look for ways to

increase the amount of money you can expect to have

available each month.    One way to do this is by

taking out one of the reverse mortgages for seniors

that are currently available for qualified

individuals. 

Two of the reverse mortgage programs available for

you include the following plans: 

Home Equity Conversion Mortgage (HECM)

An HECM is federally insured and makes up the

majority (90%) of all reverse mortgages.  There are

limits to the amount of money that can be lent to

you and this is established by the Federal Housing

Administration.  Things that the Federal Housing

Administration considers are your current age, the

value of your home and what you will be paying for

the cost of the loan.  With an HECM, you are able to

select how you want to receive the cash.  Also,

variable and fixed rate HECMs are available to be

explored by you.  An advantage of a fixed rate HECM

is that you will not have to worry that the rate

will change of the life of your loan.  If your home

is valued under $400,000.00, HECMs generally provide

larger loan advances that other reverse mortgages. 

You can obtain an HECM loan anywhere in the United

States, including the District of Columbia.  Things

that you should look for when comparing HECM plans

are:

•    Is the interest rate competitive?
•    How much cash will you have access to?
•    How much income will you receive each month?
•    How high is the credit line growth?

Fannie Mae Home Keeper Reverse Mortgage

This program is a government-sponsored enterprise

program and in many ways similar to a Home Equity

Conversion Mortgage.  It goes beyond what is offered

by a HECM, focusing on addressing individuals with

higher property values, those who own condominiums

and seniors who might be wanting to use the reverse

mortgage money to purchase a new home.  As of 2007,

there is a $417,000.00 lending limit on Home Keeper

Reverse Mortgages, so this option may not be for

everyone.  There are three types of homes that are

eligible for a Fannie Mae Home Keeper reverse

mortgage and they are condominiums, single-family

dwellings and units that are in planned unit

developments that qualify.  An important feature of

this program is that you may choose to receive money

as fixed monthly payments for life (but only as long

as you, the borrower, occupy the home as your

permanent residence.) 

Many of today’s senior citizens have decided to live

a less stressful life by choosing one of these

plans.  Take a close look at these two programs

before deciding if reverse mortgages for seniors are

right for you.