Time May Be Right For Savvy Seniors To Tap Home Equity (NAPSA)—How long can a good thing last? That’s the question home-owning seniors might want to ask themselves right about now as the current deadline for taking advantage of higher loan limits for reverse mortgages fast approaches. The limits were raised to $625,500 from $417,000 nationwide as part of the recent economic stimulus package; however, barring some last-minute extension, they’re slated to expire at the end of this year. “There’s no guarantee how long that benefit will last,” notes Jeff Lewis, chairman of Generation Mortgage Company, a nationwide reverse mortgage lender. And with most experts seeing interest rates rising and home values remaining unsteady, that makes the decision on whether to act even more pressing for seniors. For those who haven’t read the stories about seniors whose lives were in some way saved by them, reverse mortgages are uniquely designed to allow homeowners age 62 and older to access the home equity they’ve built over the years in their traditional “forward” mortgages. Meaning that, instead of making monthly payments to some financial institution—as is normally the case—seniors who opt for one of these Federal Housing Administration-insured mortgages receive “reverse” payments on the money they’ve already put into their homes. Loan amounts are based on the borrower’s age, current interest rates, the appraised home “We did our research and learned that reverse mortgages would enable them to eliminate those payments and, instead, get paid back the money they’ve put into their mortgages over the Reverse mortgages can help relieve financial stress for seniors and their families. value and the amount of equity in the home. Also setting them apart from traditional mortgages: There are no credit or in- come qualifications. “We’re seeing homeowners use reverse mortgages for a variety of situations—from wardingoff financial shortcomings to strengthening their financial outlooks,” says Lewis. “Nowis the time for seniors to regain their financial independence. Interest rates are at historic lows and loan limits may never be as generous, boosting potential payouts.” One family that’s already benefited from a reverse mortgage illustrates how the decision process often involves multiple generations. “My parents and mother-in-law decided that reverse mortgages were the right solution for their unique situations,” says Victor Seaman of St. Petersburg, Fla. “My wife and I wanted to ensure that our parents could stay in their homes without having to worry about the expense of monthly mortgage payments. years. It was a win-win for many generationsof our family.” According to Generation Mortgage Company, the top five reasons people take out reverse mortgages are: To pay off an existing mortgage. * To pay down debt, which could include anything from credit card bills to medical expenses. * To supplement their income. To help their children or grandchildren financially. To pay taxes and insurance. Whether homeowners select a lump sum, line of credit or month- ly payment plan, the reverse mortgage loan has to be repaid only when they pass away, sell or permanently vacate the home. Homeowners will never owe more than their homes are worth as long as they or their estates sell the property to pay off the loan. Should the homeownersor estates decide to keep the home, they may pay off the remaining balance. Only FHA-approved lenders can offer reverse mortgages insured by the government. To learn more about reverse mortgages and which type might be right for you, contact FHAapproved lender Generation Mortgage Companytoll-free at (866) 733-6089 and ask for a free DVD info packet or visit www.generationmortgage.com.
