Why It Is A Good Time To Get A Reverse Mortgage

Contrary to what many people believe, it is a great time to consider getting happily involved with a reverse mortgage.

Often you hear property values are going down. "I will not get as much as I hoped, if I get a reverse mortgage today".

Often one hears that an adjustable rate reverse mortgage is no different than a subprime or alt-a loan. An adjustable rate reverse mortgage loan is light years better than the aforementioned mortgages. Those that seek to conflate the Alt-a and subprime mess with reverse mortgages clearly lack an understanding of the issues.

So let's dissect the component parts of a reverse mortgage and compare it to those mortgages that caused the melt down in the mortgage industry. I will debunk "the home values are going down so it is not a good time to get a reverse mortgage" issue later in this article.

There is no income, asset or credit requirements with a reverse mortgage. The ability to make monthly mortgage payments to the lender is a non issue because this is NOT REQUIRED with a reverse mortgage.

Some of the Alt-a and subprime mortgages had such loose underwriting guidelines that it appeared that there was no income, asset or credit requirements either. However, the borrower had to make monthly mortgage payments to the lender. AND because interest rates adjusted at a point in time, this affected the amount of the monthly mortgage payments that the borrower had to make. Because the borrower was qualified on the lower teaser rate, (that was the only way they could meet the loose underwriting guidelines) they did not have the money to continue to make mortgage payments at the higher rate.

Let me repeat: MONTHLY MORTGAGE PAYMENTS ARE NOT REQUIRED TO BE MADE TO THE REVERSE MORTGAGE LENDER. IN FACT, IT IS THE LENDER THAT MAKES PAYMENTS TO THE BORROWER PURSUANT TO THE BORROWERS' WISHES.

The "value" argument as above noted, is a false argument as well for those homes that are valued above the FHA limit for their community. Those homes that have a value above the FHA limit (in their county) will receive the maximum dollar benefits even though the home has lost some of its value. The reason is that the decreased home value remains above FHA's magic number.

Also it is important to know that reverse mortgage note rates are currently in 3% plus range. The recent Federal Reserve action is partly responsible for these low rates.

Because of the money flocking into the bond market, the yields on the bonds are also at a low level. These yields help determine the benefit amounts. These yields are currently below the FHA floor. This means that benefit amounts are being maximized.

So it is a wonderful time to be CONSIDERING a reverse mortgage. Low interest rates, value's often still remain above, at or just below FHA's limits, and these loans are safe and secure because you do not have to make monthly mortgage payments.

for more information on a reverse mortgage, visit: www.secureseniorliving.org or for fha loans: www.fhastreamlineonline.com