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Reverse Mortgages get Better says Kiplinger.com

by Jeffrey L. Bangerter
November 06, 2008

There is a decent article today on Kiplinger.com but it has a mistake in the first paragraph! “Retirees concerned about their decimated savings should take a second look at reverse mortgages.

As of November 1, 2008, homeowners everywhere may borrow up to $417,000.

Previously, the Home Equity Conversion Mortgage program assigned various lending limits, ranging from $200,160 in rural areas to $362,790 in the most expensive housing markets.”

Now the facts, you cannot borrow up to $417,000 the numbers are incorrect for the old rules as well.

HUD (US Department of Housing and Urban Development) places a maximum home value that it allows reverse mortgage lenders to use to calculate how much money we can lend you and that number is now $417,000 in the continental US.

That is a lot different than saying that you can borrow up to $417,000 because the calculation for the reverse mortgage loan amount is based on the age and current expected interest rate blended with the new $417,000 limit.

The older you are the more you can get and the lower the interest rates the more you can get, to get $417,000 you would have to be age 100 and the interest rate would have to be 0%!

Everyone will get something less than $417,000, you need a quote to be sure or you can get a rough idea by using our reverse mortgage calculator on our web site.

It is a good thing HUD has raised the limits, too bad most homes have lost so much value that it might be too little too late.

None the less if you are considering a Home Equity Conversion Mortgage (HECM) “reverse mortgage” now is a good time, in fact I have never seen the reverse mortgage get better for someone because they waited.

It is true that you qualify for more money as you get older but if you do the reverse mortgage now and let the money stay in the credit line it will grow to more than if you just wait to get older and then do the reverse mortgage.

Waiting also has the risk that home values will continue to go down.

The last paragraph has the “media required scare”.

“In a recent investor alert, the Financial Industry Regulatory Authority, or Finra, warned seniors to consider all of their options carefully before committing to a reverse mortgage.

“Home equity is often a homeowner’s most valuable asset and most precious source of retirement security,” the Finra alert states.”

Have these people been living under a rock?

Home values have fallen off a cliff and they think you should be careful about accessing it while you still can, had you done a reverse mortgage two years ago and had the money in the credit line you would be wealthier today by far.

I don’t have a crystal ball and I don’t think you do either, but do you think home prices are going to jump back up to their levels of 2006 right away or might it be a while before that happens?

The bottom line in my opinion is you should get your facts from an expert in reverse mortgages not the media.

We have helped thousands of senior’s live better lives using the reverse mortgage, we will talk to you by phone with no pressure to do anything, we will give you a quote over the phone and if you decide the reverse mortgage loan is right for you we have Loan Officers in 20 States to help you with the process.

You may call us from 8:30 AM to 5:00 PM Pacific time and talk to a live person, no voice mail or recorded messages, give us a call and get the straight answers.