This is the final post on a rather long article that discusses a recent report that was published by the Department of Housing and Urban Development that expressed concern about the amount of housing debt seniors are carrying.
Some made the decision in the last few years to either do a traditional mortgage and take some money out at the close of escrow or they applied for a LOC from their bank because they needed additional money for their monthly expenses.
The problem with this idea is that eventually they run out of that “cash” and still have a mortgage payment each month when a much better option would have been for them to apply for a Reverse loan.
Here is the remainder of the article that was written by Jason Oliva.
“The Home Equity Conversion Mortgage (HECM) enables homeowners age 62 and older to convert their home equity into tangible funds that can be used to pay a variety of living expenses, including paying off existing mortgage debt.
But although HECMs have undergone substantial changes in recent years that have made them safer products for borrowers, not many eligible homeowners are aware of these new updates, let alone know how a reverse mortgage could supplement their retirement.
“The HECM program currently serves a relatively small number of older homeowners, but many more households could potentially benefit from the program,” HUD writes. “Although FHA endorsed fewer than 1 million HECM loans between 1989 and 2015, HECM may be an effective option for some seniors looking to access their home equity.”’