Saturday, September 06, 2008
Notes on reverse mortgages
An important financial device available to some seniors is the Reverse Mortgage. There are some variations on the theme, but generally they require age at least 62, can be used with a home only with significant equity, and do not require mortgage payments from the senior as long as he or she lives in the home. Generally, the mortgage debt would be the responsibility of the heirs.
The Bank of America, for example, offers two products. The Home Equity Conversion Mortgage (HECM) would be available for manufactured homes, but not for getting a loan for a new home or leaving an inheritance. For those two needs, the Senior Reverse Equity Mortgage Platinum is available. The site is here.
The Department of Housing and Urban Development (HUD) has a fact sheet of “ten things to know if you’re interested in a reverse mortgage”, link here. For example, there are five options for getting payments: tenure, term, line of credit, modified tenure, modified term.