Reverse Mortgages

Taking equity from your home in the form of a reverse mortgage seems like a wonderful way for seniors to obtain extra cash, especially since many have lost money in retirement funds.  But there is a cost to using that money and other things to consider.
The new federally backed Home Equity Conversion Mortgage Saver Loan has smaller borrowing limits, higher interest ratesthe loan is cheaper than older versions (0.01% of a home's value vs. 2%), borrowing limits are smaller and interest rates are higher.  In addition, annual insurance costs of 1.25% of the home's value, closing costs, and upfront fees could mean big bucks.
Payback on the loan is when it is sold or the owner moves.  The longer a senior plans the stay in their home, the more the expenses are spread out.
Alternatively, another more practical way for seniors to get cash might be to sell.  Many seniors are living in a home that is much larger inside and out than they need.  They may also have a home that has more steps than they utlimately need.  Ray Brown, co-author or Mortgages for Dummies says that "Downsizing into a smaller home is one way to free up equity in your big, old empty nest".
Need to downsize for whatever reason, give us a call.  We specialize in helping seniors.