I am sharing a brief summary of an article that was recently published by CNN about why more financial advisors are reconsidering the FHA loan as an option to extend retirement funds.
Overall, the article is good but it does make a mistake in regards to Closing Costs that I discussed in a previous post.
The Origination fee CAN be as much as $6,000 but depending upon which loan program is used and the interest rate associated with it, the fee drops and in some cases the borrower can receive a credit towards the fee. Reducing the Closing Costs overall.
CNN Money: Reverse Mortgages Poised to Be Mainstream Strategy
Posted By Jason Oliva On May 20, 2014 @ 4:25 pm In News,Retirement,Reverse Mortgage |
“Reverse mortgages, what were once considered options of last resort, are now poised to become a mainstream financial strategy for older adults looking to shore up their retirements, reports CNN Money in a recent article .
Now that reverse mortgages have undergone a variety of program changes, financial services companies are aiming to make these loans more appealing to consumers, with some advisors even touting them as standby credit.
‘“Home equity is key to Americans’ retirement security, so it’s crucial to responsibly offer reverse mortgages,” said Christopher Mayer, a Columbia Business School professor and CEO of Longbridge Financial, in the article.
The article also encourages readers to weigh the costs of reverse mortgages, among other considerations, to determine if these loans are a good fit for one’s own financial situation. ”
A federally appointed Commission on Long-term Care recently published their recommendations to Congress about the concern of the future of the aging population of our country and how their needs will be met as they age.
Its a very serious concern and could be very costly to state and federal agencies, as most people are unprepared to meet the process of aging. Part of their findings and recommendations, would be to use the funds from a Reverse mortgage to essentially, “self-insure” and to be able to afford the costs of aging.
Here is the second part of the article.
Committee Touts Reverse Mortgages Amoung Solutions to LTC Crisis
Alyssa Gerace September 18, 2013
“The need for LTSS and the cost to governments will grow dramatically over the next two decades with the population aging, increasing the burden on already underfunded government health care programs. Preparing to meet the LTSS needs of the population and ensuring adequate financial resources will take time,” it says. “The process should begin now.”
The use of reverse mortgages and a funding source for long-term care was named as one alternative approach to strengthening LTSS financing through private options, among other recommendations.
“Use reverse mortgages to enable seniors to use the value of their home equity to fund long-termcare services, including while remaining in their homes,” says the report. “Enable retirees to pre-qualify so funds would be available when needed.”
The following article was written last September, but is certainly still relevant now as it was then, drawing attention to the pending crisis on how to pay for long-term-care as the population ages.
10,000 Boomers are turning 62 each day and most of them won’t have enough savings to pay for any medical crisis that could occur as they age and most of them have not purchased Long Term Care insurance.
Federal and state governments are concerned about the financial impact that will effect programs, many of which have already been discontinued due to lack of funding and the families of seniors.
Here is the first part of the article and I will share the rest of it in two more posts.
Committee Touts Reverse Mortgages Among Solutions to LTC Crisis
Posted By Alyssa Gerace On September 18, 2013 @ 6:14 pm In Reverse Mortgage
“The federally-appointed Commission on Long-Term Care included reverse mortgages as a way to fund long-term services and supports among other recommendations to Congress on how to address the needs of the aging population.
On Wednesday, the committee submitted the final report to Congress following a Sept. 12 vote in favor of its recommendations, which are meant to renew national discussion regarding how to address the issues and challenges of the aging American population. The vision is to create “a more responsive, integrated, person-centered, and fiscally sustainable LTSS delivery system that ensures people can access quality services in settings they choose.”
Currently, the federal and state governments pay for 62% of paid LTSS, amounting to more than $130 billion a year, the Commission’s report says.”