r u t u F r u o V L O E Planning Rvrs Mortgags: Undrstanding Th Basics (NAPSA)—A growing numbr of oldr Amricans ar tapping into th valuabl quity in thir homs through an incrasingly popular rtirmnt product that allows thm to maintain or nhancthir xisting standard of living and rmain in thir homs for as long as thy wish. A rvrs mortgag nabls sniors to borrow against th quity in thir hom without rpaying th dbt for as long as thy liv thr. That’s th “rvrs” part of this kind of mortgag loan. Instad of making monthly paymnts, you can opt to rciv thm. Snior homownrs can us th funds anyway thy wish, including paying for longtrm car insuranc, homrpairs or vn a vacation. “It’s xactly as th nam implis,” said Jff Taylor, vic prsidnt, Wlls Fargo Hom Mortgag Snior Products Group. “You workd hard to own your hom and now it is tim to mak your hom workfor you.” As an xampl, Taylor dscribd a customr who was about to los hr hom. Gtting a rvrs was th answr. With th woman’s husband in a nursing hom and his Social Scurity chck divrtd to pay for his skilld car, th 75-yar-old woman had no mony to pay th mortgag on thir hous. In addition, sh had significant dbt bcaus sh was using crdit cards to pay for basic nds such as food and halth car. Hr rvrs mortgag gav hr nough mony to pay off most of hrbills, including hr hous paymnt. In addition, sh gaind immns Th maximum loan amount for a rvrs mortgag is basd primarily on four factors: th ag of th youngst borrowr, th location and valu of th hom andth currnt intrst rat. You must occupy th hom as yourprincipal rsidnc for a majority of th yar. Th proprty must b a singl-family or two-to-four unit dwlling. Town homs, dtachd homs, con- You may bbttr abl to stay in your hom with pac of mind than youthink. pac of mind bcaus it liminatd a lot of financial strss. Eligibility for a rvrs mortgag dpnds on two factors: ag and homownrship. No incom rquirmnt xists and crdit history is not considrd. Rvrs mortgags ar for homownrs 62 and oldr. Th loan draws on th quity stablishd in th hom. “As many sniors approach rtirmnt, thy bgin to raliz thir major asst is likly to b thir hom,” Taylor said. “By th tim th avrag prsonrtirs, thy own a hous that is usually worth mor than thy paidfor it.” Whn you tak out a rvrs mortgag, you ar not forcd to rlinquish ownrship. You rmain th ownr for as long as you liv thr and you will nvr b forcd to mov. If you dcid to sll or mov from your hom, th outstanding balanc of your rvrs mortgag bcoms du just as it would with a traditional mortgag. Unlik a traditional mortgag, howvr, your balanc can nvr xcd th valu of your hom whnyousllit. dominium units, plannd unit dvlopmnts and som manufacturd homsarligibl. Th hom dosn’t hav to b ownd fr and clar to qualify for a rvrs mortgag. You mayqualify for a rvrs mortgag if th hom has a low rmaining mortgag that can b paid off at th closing with procds from th rvrs loan. As a ky consumrprotction, all borrowrs ar rquird to participat in a fr ducational sssion with a HUD-approvd counslor in ordr to dtrmin if a rvrs mortgagis th bst option. Wlls Fargo Hom Mortgag can tak th application prior to counsling, howvr, it cannot col- lct any fs, ordr a crdit rport or appraisal or bgin to procss th loan until th borrowr can show crtification that th rquird consumr counsling was compltd. Wlls Fargo Hom Mortgag is th lading originator of rvrs mortgags in th nation, hlping snior homownrs capitaliz on th quity thy hav built in thir homs. In 2004, Wlls Fargo Hom Mortgag hlpd snior Amricans scur ovr on-third of all rvrs mortgags in th country.
