Finding Hidden Cash

Article submitted by Linda Jaikes, CSA, American Reverse Mortgage. Call 888-453-8803 for a 3 minute recorded overview. She can be reached at 263-9195 or through their website www.AmericanReverse.com

Many seniors don't realize that one of the biggest assets they have is right under their feet. Yes, It's their home! But how do you get extra cash without selling your home or making expensive monthly home equity loan payments?

The answer is the REVERSE MORTGAGE.

You can put an end to monthly cash flow problems, take more vacations, visit friends and relatives or do some home improvements. There are no requirements as to where the money is spent. This misunderstood program doesn't require you to give up any ownership in your home. You retain 100% ownership and will never be required to repay the loan until you pass away, move or sell the house. If you are over the age of 62 and have substantial equity in the house, you may qualify.

There are several types of Reverse Mortgages. The most popular is the Home Equity Conversion Mortgage (HECM) which is an FHA insured reverse mortgage designed by the US Department of Housing and Urban Development (HUD). A significant feature of the HECM is that they are insured under this government Federal Housing Administration (FHA) insurance Program. The FHA insurance guarantees that you will receive all payments due while living in your home. It also protects both borrowers and lenders against the risk that the loan balance might exceed the value of the home. As a borrower you will never owe more than the loan balance or the value of the home whichever is lower, and no other assets can be required to repay the loan. There are several ways to receive your money. You can receive monthly income, line of credit or a combination of both.

This is a powerful tool to obtain tax free income. From a financial planning point of view, many seniors use some of the income to fund a long term care policy, thereby guaranteeing they can stay home well into their golden years in the event their health should change. It is a common sentiment that when the need for long term care arises, most prefer to stay in their home. A good comprehensive long term care policy with care coordination benefits helps you to accomplish that goal. That is why more and more older homeowners are utilizing this financial vehicle. Although there are some costs involved with this, it is in line with traditional forward mortgages. The experts agree the Reverse Mortgages and Long Term Care Insurance policies are the wave of the future for smart seniors.