Sadly, there are many senior homeowners who have seen a percentage of their retirement disappear as the effects from the recession are still being felt in many homes across the nation and have led to the senior homeowners considering a reverse mortgage as a way to either recoup losses from the economic downturn, and meet various financial obligations that have arisen later in life, like medical costs, or some homeowners have even reportedly used funds from a reverse mortgage to purchase a second home.
However, the ongoing debate over whether reverse mortgages are the best option for seniors continues as there are, again, many senior homeowners who are suffering from financial distress due to either unexpected costs or troubles related to their personal finances. Yet, new reverse mortgage options that may offer a more affordable reverse mortgage plan for senior homeowners have arisen over the past months and are hoped to attract more homeowners into this reverse mortgage plan as, again, there are some benefits which may be experienced for senior homeowners.
Financial counselors still make a point of mentioning that a reverse mortgage is a debt that must eventually be repaid despite the fact that the reverse mortgage borrower does not have to make payments as with a traditional mortgage or home equity loan. Also, homeowners who continued to remain in their home or can claim their home as their principal residence will never have to make a repayment on the reverse mortgage loan as long as they live. Typically, when a reverse mortgage is properly executed by a homeowner, funds from their estate or through the sale of the property will repay the mortgage debt and no problems will arise.
One of the main concerns with housing counselors or financial advisers typically centers around these difficulties that may arise if homeowners become ill and must find alternative living arrangements, can no longer pay their property taxes, or if their home falls into disrepair, as this will require they repay this reverse mortgage debt obligation. Yet, options like the HECM Saver reverse mortgage loan offers homeowners a more affordable option as this type of home loan will be smaller in amount and come with a smaller mortgage insurance premium.
Luckily, homeowners who are considering a reverse mortgage can opt for either a traditional Home Equity Conversion Mortgage plan or the HECM Saver option will have to go through reverse mortgage counseling, which can make more homeowners aware of benefits and drawbacks to a reverse mortgage and how it would apply to their personal financial situation. Many homeowners who are struggling financially and feel that a reverse mortgage is their best option are usually counseled to explore alternative options and weigh the pros and cons of a reverse mortgage as there are other ways which homeowners may lower costs, like relocating to a more affordable living arrangement.
Yet, homeowners who are considering a reverse mortgage do have the option to benefit from these funds that will not have to be repaid, if guidelines are adhered to, and this can lessen financial burdens that may become present later in life and help these homeowners avoid financial strain in other areas or could allow for a safety net if costs unexpectedly arise.