There’s been a lot of talk and media coverage as of late about reverse mortgages and the opportunities they present senior citizens. In all, American borrowers will assume about 120,000 of the most popular reverse mortgages this year, according to the National Reverse Mortgage Lenders Association.

With reverse mortgages, homeowners receive a lump sum, a monthly amount or a line of credit and don’t have to repay the debt for as long as they live in their homes. Dozens of the national organizations and advocacy groups, such as the AARP and the National Council on Aging, have touted these unique mortgages as way to use equity to cover costs such as health-care and other long-term needs.

The reverse mortgage loan has appeal to a homeowner that has been in their home a long period of time. When considering a reverse mortgage, it is important to investigate the details of the mortgage. Upfront costs can be high when the loan is very high, and the pay off time is over a long period of time as opposed to a shorter period of time.

With an FHA-insured reverse mortgage, you must pay a 2 percent loan origination fee plus a 2 percent fee for mortgage insurance.

To learn more about reverse mortgages and how they can help seniors, contact one of the experts at Mortgage Loan Place today.

During the refinancing boom in 2003 and 2004 millions of Baby Boomer homeowners refinanced their mortgages and took out new 15 or 30 year loans.  This is problematic because many homeowners in their late 50’s or early 60’s still have big mortgages running for another two or three decades.

How will Boomers with these massive loans be able to pay them off?  Will they be forced to sell their homes when their monthly mortgage payments get too high?  The Federal Housing Administration says “No”.

The FHA has a reverse mortgage loan designed specifically this problem.  A reverse mortgage lets homeowners convert equity in their homes into cash payments.  The FHA, typically known as a heavily bureaucratic government agency, has turned that perception around and is currently booming.

Last year alone, total Home Equity Conversion Mortgages (the official name for the FHA’s reverse mortgage) jumped 49 percent to almost 72,000.  The program has become so popular there is new legislation meant to increase the FHA’s loan limits pending.  To find out more about Reverse Mortgages and other types of FHA loans check out our lending guide.