Reverse Mortgages - Why They Are Growing in Popularity
By Daniel Nicolosi

As I approach my senior years, I realize how important planning for a comfortable retirement is. Everyday I see the difficulty my own friends, family and clients are having in making ends meet now that they are living on a fixed income--even though they have lots of equity in their homes.

After working a lifetime to be debt free, I figured there MUST be a viable solution! One solution I found that is gaining in popularity is the FHA Insured REVERSE MORTGAGE or the Home Equity Conversion Mortgage (HECM). I know what you might be thinking: "The bank could take my home!" At one time I thought the same thing. That's just a myth and fortunately, it's just not the case! In fact, the opposite is true; with a traditional "forward" mortgage if you miss payments the bank can take your home. With a Reverse Mortgage, because there is NO mortgage payment and because it's FHA Insured, your home is safe and secure!

I hear the most amazing stories of how a Reverse Mortgage has saved seniors from foreclosure, and from having to make a choice between eating or taking their medication. I'm working with one family now that by doing a Reverse Mortgage their 99 year old Mom will be able to stay in her home with a full time nurse instead of being put in a care home. They would have had to sell the home, but instead, with a Reverse Mortgage, they can use the equity she worked so hard for to be able to stay at home where she belongs and where she is most comfortable. To me, that is priceless!

So, what exactly is a Reverse Mortgage?

· A Reverse Mortgage converts home equity (not unlike a HELOC) into cash that can be received as a lump sum, a line of credit, payments for life or any combination of the aforementioned.

· As long as the senior continues to live in their home, they will never have to repay their reverse mortgage. In fact, they will retain title to their home and cannot be forced to leave as long as they pay their property taxes and insurance, and maintain their home.

· The loan amount will depend on the applicants age, available home equity, appraised value, area in which they reside and current interest rates.

· As part of the application process, the senior must speak with an independent HUD approved counselor who will make sure they are aware of all the intricacies of a Reverse Mortgage. They have the option to see a counselor in person, or speak with them on the phone.

· Although the Reverse Mortgage proceeds are tax free, it is still advisable that the senior consult a financial advisor before moving forward to ensure that the Reverse Mortgage will not affect medical or other public assisted benefits.

The proceeds from a Reverse Mortgage may be used to pay off debt, take vacations and travel, repair or remodel the home, or visit the grandchildren! No matter what the reason, a Reverse Mortgage will enable the senior to live in their home comfortably, for the rest of their life, without the worry of a mortgage payment!