By Matt Allen
The information provided in this article is intended to give a general overview of the topic and is not intended as legal advice. For information specific to your situation, please talk with your reverse loan mortgage professional.
Article #8, Seniors Making A Monthly Mortgage Payment, You Are Not Alone
According to a report from Harvard University’s Joint Center for Housing Studies, as of 2010, “40 percent of households 65 and up were still paying a mortgage.” In 1992, according to the report, there were only about 18 percent over 65 with mortgage payments. Another similar report from the CFPB states as of 2011, 21.2% of homeowners 75 and older still had mortgage debt. The CFPB report goes on to mention that housing related costs exceed 30% of household income on over half of homeowners 65 and older with mortgage debt, putting them at greater risk for financial harm.
The National Council on Aging did a survey and found one in four senior households that had credit card debt with a balance of at least $7200 in 2013. On top of that they found one third of senior households have no money left over at the end of the month or is in debt after meeting essential expenses. Is it any wonder, when you look at any of the surveys conducted over the last decade, that the number one concern for seniors is running out of or not having enough money during retirement?
As disheartening, sad and depressing as those numbers are, there is an option that homeowners 62 and older could utilize to improve their financial situation drastically. That option is to utilize a home equity conversion mortgage, also known as a reverse mortgage.
With the reverse mortgage, you could pay off your current loan and never have to make a monthly mortgage payment. This could free up a considerable amount of cash flow on a monthly basis by simply getting rid of your current mortgage payment. On top of that, depending on the amount of equity you have in the home, you may also be able to get additional cash in hand, set up a line of credit, and receive monthly payments or a combination of those options.
Unfortunately, there are many seniors that will never consider the reverse mortgage as an option. These reasons include things they have heard, read or seen about reverse mortgages being “bad” or a “scam.” They have become numb to their situation and have given up on finding a solution. Or they feel that they must leave their home free and clear to their heirs.
The reality is that a reverse mortgage can be life changing financially for many seniors. It is a safe product that was voted into existence by congress is insured by FHA and is regulated by HUD. It is a very flexible loan that can be structured to meet the needs of seniors and their situations. If you are still making a monthly mortgage payment, my question to you would be, why? How much money could a reverse mortgage free up for you on a monthly basis, $500, $800, $1500? What could you do with that extra money and how would it impact your life?
If you are a homeowner that is 62 or older and still have mortgage debt, I would highly encourage you to give me a call for a free, no cost, no obligation reverse mortgage analysis. The analysis goes far beyond numbers and includes FAQ, loan options, amortization tables, fees, charts and more.
Matt Allen 541-292-5423