HINTS FOR HOMEOWNERSReverse
Mortgages Help Seniors Stay In Their Home--And Have Peace Of Mind |
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(NAPSI)-Statistics show that nearly 22 percent of seniors retire with a mortgage--and some 5 percent of older Americans carry mortgage and home equity debt well into their retirement years. Seniors who use a reverse mortgage can pay off an existing mortgage and free up money to cover daily living expenses, home repairs or long-term health care. "More than 70 percent of our customers take out a reverse mortgage to pay off an existing mortgage--compared to just 48 percent a year ago," said Tim McDonald, head of Wells Fargo's Senior Products Group. "While the majority of older adults own their homes outright, these are not the reverse mortgage customers we're seeing today. We are hearing from seniors who want to pay off their mortgage so they don't have that heavy monthly burden weighing on them during a time of fixed income and--for some--tight finances." Now, more than ever before, there are innovative homeownership options that can help seniors optimize cash flow and promote peace of mind. One option is the federally insured Home Equity Conversion Mortgage (HECM)--a reverse mortgage. It enables seniors to borrow against their home equity without taking on a new monthly mortgage payment. "There is no reason for a senior to be house rich and cash poor," McDonald added. "Worries about money should never trouble people who are retired, especially when they have the ability to access the equity in their home." Reverse mortgages are a financial planning tool for older homeowners. Seniors can convert part of the equity in their home into tax-free proceeds without having to sell their home or give up title, as long as the program requirements are met. Unlike traditional home-equity financing, there are no income, employment or credit restrictions. The senior homeowner receives monthly payments instead of making them and keeps title to the property until he or she moves, sells the home or passes away. All costs can be financed into the loan. Further, the senior doesn't repay the loan as long as he or she lives in the house, keeps the taxes and insurance current and maintains the property to FHA standards. There are no restrictions on how the tax-free proceeds are used. Social Security and Medicare benefits are not affected. To qualify for a reverse mortgage, you must be at least 62 years of age or older and occupy the home as the primary residence. Seniors must own their home outright or only have a low remaining balance that can be paid off with their reverse mortgage proceeds. Additionally, seniors are required to participate in a reverse mortgage counseling session from a HUD-approved counselor. Friends, family members or financial advisers can participate with you. Seniors have several options when receiveing reverse mortgage proceeds, including the following distribution options: lump sum; term, or having funds released in a fixed monthly amount; a line of credit; or as a combination. Regardless of how you choose to receive your proceeds, you can adjust your plan to accommodate changing needs. Numerous consumer safeguards are built into the program, including the mandatory HUD-approved counseling, payment guarantees, capped interest rates and advanced disclosures. A consumer-friendly Web site with a reverse mortgage calculator has been created by Wells Fargo to help seniors learn about reverse mortgages, download free educational materials, and calculate an estimate of how much a reverse mortgage could provide them in retirement. Visit www.wellsfargo.com/reverse. Not all bank and mortgage companies originate reverse mortgages. Wells Fargo is the nation's leading retail originator of reverse mortgages. |
Word Count: 604 Many older Americans have discovered a way to let their house take care of them for a change. |
