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The demand for reverse mortgage lending is growing stronger every year. Many seniors are finding themselves looking for new sources to assist them in manage their expenses. One of the biggest benefits of a reverse mortgage lending is it repaid only when the homeowner no longer lives in their home.
A reverse mortgage is very similar to a home-equity loan. The homeowner has several payout options: they can receive a lump sum, get regular payments over a period of time, or a combination of the two. Depending on your future plans you will want to give the payout some consideration, so you maximize the best financial structure to fit your needs and goals. Be sure to communicate your situation and work closely with your counselors and lending institution.
Seniors are using reverse morgage lending for purchasing homes. Some seniors have elected to downsize and use a reverse mortgage to pay for the purchase of their new home. As of 2008 the new Housing and Economics Recovery Act a senior can use a HECM (Home Equity Conversion Mortgage) a to purchase a new home or condo. Concress posted new lending provisions and incentives to give reverse mortgages a boost under the Federal Housing Administration. Increasing the cost to the government, lending has fallen leaving the FHA as one of the last sources for Revers mortgages. Concurrently making reverse mortgages highly regulated.
Quick Reverse Mortgage Lending history recap:
- The U.S. Congress passes Housing and Community Development Act of 1987
- President Ronald Reagan signs FHA Reverse Mortgage legislation in February 1988
- The Federal National Mortgage association (fannieMae) created Home Keeper in 1996