Reverse Mortgage

Reverse mortgage possibilites are detailed here for your information. Learn about this popular home loan option and determine if it is appropriate for you.

Reverse Mortgage - A Viable Option For Seniors

What is a reverse mortgage, anyway?

An interest only mortgage is a financial option that provides you security by manipulating payments. In other words, putting forth less money now in exchange for getting hit hard later. A reverse mortgage, by contrast, functions in an contrasting way, allowing you to reap the rewards of the payments you have already made. While an interest-only loan gives you flexibility when you first start out, a reverse mortgage offers is financial stability later on in life. It will give you the flexibility to maintain ownership of your property and cash in on valuable equity during your senior citizen-years.

The origin of reverse mortgages

The biggest contributor to the popularity of reverse mortgages is the changing climate for retirement in the United States. If you are close to any people in their 60s, or have watched the news or picked up a newspaper in the past few years, you know that retirement is becoming increasingly difficult. The economy is not what it was a decade ago, and at the same time more citizens are nearing the official retirement age.

The implications of this? As the Baby Boom generation nears retirement, more citizens will be withdrawing social security subsidies and benefits from a population of fewer workers. The astronomical costs of prescription drugs are another contributing factor. As health care in the U.S. is privatized, many citizens get little relief. With all of these influences on the financial livelihood of senior citizens, it's no wonder many of them are turning to a reverse mortgage.

Putting a reverse mortgage to work

Because a reverse mortgage is so unconventional, understanding it in relation to a standard loan requires explanation of the mortgage process itself. Traditional loans work in this way:

1. After making a down payment, you borrow the rest of the real estate's appraised value from a bank, then make monthly payments on the premium (what you pay for the home itself) and interest (what the bank charges in return for its loan) until it's all taken care of. This loan is what a mortgage technically is.
2. In many cases, the mortgage is 30 years in duration and is never paid in full. Regardless, each payment you make means ownership of one more piece of the real estate. This is called equity.

Here is where the reverse mortgage deviates. By allowing you to borrow against your equity, your lender effectively makes payments to you instead. The same way you would withdraw money from a checking or savings account, you can reclaim portions of your home to help assist your living. For seniors living on fixed and/or limited income, this can make your home available as a tangible asset. Like any investments or sources of money you have stashed away, real estate is a value resource that should be leveraged according to your needs.

To learn more about these mortgage types and many other home loans, apply using the form above for a free consultation with First Empire's staff. The process is easy, secure and absolutely free. Unlike with other mortgage lenders, you will be under no obligation to continue with us at any time. Our only requirement is that you listen to what we have to say - for your own benefit! We look forward to hearing from you!