Los Angeles, CA -- (SBWIRE) -- 07/21/2014 -- Reverse Mortgages or Home Equity Conversion Mortgages (HECM) have been in the media in recent years for all the wrong reasons. Instead of highlighting and generating awareness about the immense benefits senior people could get out of a reverse mortgage, the media focused on its minor negative aspects. The two specific cases talked about were widows of senior men who had taken out reverse mortgages and passed away. After the death of these men, their widows faced foreclosure because they could not pay for the mortgage. The important point here - that was completely missed out in the article - is that in neither cases the widows were part of the HECM loan contract, which would have otherwise protected them from such problems.
The reverse mortgage is governed by the department of Housing and Urban Development (HUD), it has very simple and crystal clear rules, i.e. the senior people who want to take out HECMs, will be entitled to live happily in their homes without having to pay monthly payment on the reverse mortgage as long as they live. In case the home has two or more joint owners, both (or all - as the case may be) need to be covered under the contract of HECM loan agreement.
The reverse mortgage payment is directly proportional to the age of the applicant, i.e. the older the applicant is the more can be borrowed. When there is more than one owner everyone must be covered by the HECM loan contract in order to benefit from the protection offered by the HECM. In such case, the draw amounts would be decided according to the age of the youngest among the persons on title, the youngest being 62 years old.
The HECM loan comes with no obligations whatsoever; all the fees are reimbursable from the HECM loan payout itself. There are no mortgage payments whatsoever that the seniors have to pay during their lifetime; however, property taxes and insurance must be maintained.
The HECM loan is indeed the best financial tool that seniors can use to enjoy a comfortable retirement; the proceeds from the HECM loan would ensure that.
Seniors who are not financially challenged could significantly improve the quality of their lives using the reverse mortgage loan as an option to enhance their retirement, with no risk (all risk would be covered by FHA), no repayment worries, and shot in the arm financially, seniors could live a more meaningful and happy retirement.
For more information please visit http://www.reversemortgage101.org.
Press contact: Jeremy Roberts
Address: Po Box 341
Los Angeles, Ca 90004