Reverse Mortgages

Article submitted by Ted Johnson, CSA of American Reverse Mortgage.
For more information, he can be reached at 239-357-3402.

As you start 2005, you are likely making resolutions and plans for the goals you want to accomplish, such as paying for a grandchild's college education, taking a trip around the world, investing in real estate or stocks, contributing to charity, being debt free and never making a house payment again. These are just some of the things seniors have achieved with funds from their reverse mortgages.

The U.S. Department of Housing and Urban Development (HUD) created a federally-insured private loan, a reverse mortgage that is safe and can give Americans 62 years or older greater financial security.

Reverse Mortgages are becoming increasingly popular in this country in part because the borrower(s) makes no payments to the lender as long as the home is used as the primary residence. Also, there are no restrictions on the use of funds from a reverse mortgage, nor do they affect social security or taxes. According to the Wall Street Journal, Fannie Mae estimates that 16 million households will seek reverse mortgages by 2010.

There is lots of consumer information available about reverse mortgages, for example, AARP publishes a free guide "HOME MADE MONEY" available from them on request. FannieMae also has a free booklet "MONEY FROM HOME". Additionally, the American Bar Association has published a comprehensive book to aid attorneys that can be purchased directly from the ABA. One of the best sources of information, due to their knowledge and training, is a qualified reverse mortgage advisor.

American Reverse Mortgage (ARM) is the largest reverse mortgage originator in Florida and the fifth largest in the United States. ARM is a member of the National Reverse Mortgage Lenders Association and is headquartered in Ocala, Florida. ARM Advisors are fully trained to assist seniors; many are Certified Senior Advisors dedicated to personal service, providing quality information with the highest level of confidence.

A reverse mortgage is a federally-insured home loan that lets you, the homeowner, convert a portion of the equity in your home into cash. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow. FHA requires that you own the home as the primary residence, and the youngest borrower be 62 years of age or older to be eligible for the reverse mortgage. Unlike traditional home equity loans or second mortgages, you make NO payments until the home is no longer your principal residence; additionally there are NO income or credit requirements to qualify for a reverse mortgage.

The reverse mortgage is different because it pays you. You have several options for receiving your payments that can be changed at any time throughout the life of the loan, including equal monthly payments for a term or for life, one lump sum payment, line of credit, or any combination of these.

The reverse mortgage is a non-recourse loan; the lender cannot take your home if you outlive the loan. The loan will not become due as long as you continue to live in the home and keep the taxes and insurance current. You can never owe more than your home's value. When you no longer use your home for your primary residence, you or your estate will repay the cash received plus interest and normal closing costs, as in any conventional mortgage, to the lender. The remaining equity in your home belongs to you or to your heirs. This debt will never be passed along to your estate or heirs. HUD requires all borrowers to receive a third party counseling certificate from a HUD-approved counselor prior to obtaining the loan to ensure that you fully understand all aspects of your reverse mortgage.

American Reverse Mortgage is 100% dedicated to the reverse mortgage business; it's the only mortgage business we do. Our trained staff offers the best customer care, the most timely and accurate information and fastest loan closings, all in the convenience of your home. ARM Advisors can make the experience of setting up your reverse mortgage easy and enjoyable. It is time to achieve your dreams.