Reverse Mortgages Offer Financial Flexibility to Seniors

Article submitted by Jennifer Pate, Reverse Mortgage Specialist, Wells Fargo Home Mortgage.
For more information, they cane be reached at 1-800-246-2418, or visit her website: www.reversemortgages.net.

Reverse mortgages are growing in popularity as a smart home-financing alternative for homeowners 62 and older who want to convert a portion of the equity in their houses into tax-free proceeds*. With a reverse mortgage, you can turn the value of your home into cash without having to repay a loan each month.

A reverse mortgage works much like a traditional or forward mortgage, but, as the name implies, in reverse.** Rather than making monthly payments to a lender, the lender makes payments to the homeowner. Seniors don't sell their homes or give up title. No monthly payments are made on a reverse mortgage during its term and there is no fixed maturity date - as long as one of the borrowers lives in the home. The loan simply becomes repayable when the house is sold or vacated. Homeowners never owe more than the value of the house or the amount borrowed under the terms of the loan, whichever is less.

"If you own your own home and want to stay there, a reverse mortgage makes sense," said Jennifer Pate, a reverse mortgage consultant for Wells Fargo Home Mortgage based in Brentwood, Tennessee. "Why not access the equity that is already there? There are virtually no restrictions on what can be done with the money obtained through a reverse mortgage."

"People have dreams about the way they want to spend their retirement years - pursuing hobbies, traveling the country, spending quality time with their children and grandchildren," Pate said. "Unfortunately, many Americans in their "golden years" are not finding this time to be very golden. Instead, they are making a lot of financial compromises."

"In some cases, we are taking people who are just getting by on their Social Security checks and helping them find a way to enjoy retired life," Pate said. "For those people who are nearing retirement, now is a good time to talk to a financial advisor to see if a reverse mortgage is in their best interest."

*Consult a tax advisor regarding deductibility.
**Reverse Mortgage borrowers are required to obtain an eligibility certificate by receiving free counseling sessions with a HUD-approved agency. Family members are also strongly encouraged to participate in these informative sessions.