Reverse Mortgage Home Loan Lending And Benefits Homeowners Are Seeing

Reverse mortgage home loan lending opportunities are one option that senior homeowners have explored over the past months in situations where additional income may be needed, an injection of cash could be of assistance in their personal life, or simply as a way to access funds for personal use, but a reverse mortgage home loan can be a controversial issue for some and, with changes in the industry, there are lenders who are beginning to exit the reverse mortgage market.

Not long ago the Home Equity Conversion Mortgage and HECM Saver options were introduced to homeowners who may have been in a position to qualify for a reverse mortgage. These individuals have to be 62 years old and must have equity built up in their home before they can acquire a reverse home loan, but senior homeowners who may have needed financial assistance for everyday expenses after they have retired or to meet medical costs have considered reverse mortgage home loans to be a viable option when it comes to acquiring these funds.

Obviously, one of the main draws to a reverse mortgage is the fact that homeowners who meet these requirements and remain in their home, pay their property taxes, and keep the property in good condition usually are able to avoid repaying the funds on this reverse home loan as many homeowners have been able to claim their home as their primary residence until they passed away. In many cases, this reverse mortgage is repaid through either funds from the homeowner’s estate after they passed away or through the sale of their home by their heirs, so this has allowed homeowners to access funds from their equity without having to repay this debt.

However, many advisers and counselors are quick to point out that a reverse mortgage home loan is a debt that must be repaid eventually, and if a homeowner fails to meet these requirements, they could owe not only the principle on their reverse mortgage home loan but interest which has accrued as well. However, the HECM reverse mortgage has been one way that homeowners have been able to get this type of home loan, and the HECM Saver has been a more affordable option for certain homeowners looking to take advantage of this type of particular home loan.

Yet, some financial institutions, like Bank of America, have decided they will longer originate reverse mortgages and it has also been reported that Wells Fargo will be changing their lending channels through which a reverse mortgage may be available. However, the FHA HECM reverse mortgage has become one of the more widely known options for acquiring this type of home loan and one of the benefits is that homeowner reverse mortgage counseling is required. It’s understandable that there are some individuals who could benefit from a reverse home loan as access to funds can be helpful for senior homeowners, but those who may be considering this reverse home loan need to not only look at the benefits that can be gained for their personal situation, but also must strive to understand what the drawbacks of a reverse mortgage will be if a homeowner cannot meet continued requirements so that they can avoid making repayments.