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By Nathan Johnson

The economy is going through some hard times right now and many groups are feeling the effects, especially seniors. Because of that many lenders have turned to offer Reverse Mortgages to their senior clients at a growing rate. Have you received phone calls, mail, or seen advertisement about Reverse Mortgages? Like any financial tool, there is no one size fits all so we need to take a fresh approach and get the facts. Sound good? Ok let's get started and look at the 8 facts you must know about a Reverse Mortgage and why it may or may not be the best option for you.   

• 1. A Reverse Mortgage is a government insured home loan that allows seniors age 62 or older to convert home equity into a liquid asset.
• 2. The borrower does not forfeit the title of the home and all rights as the homeowner are retained.
• 3. As long as one borrower occupies the home, and property taxes and homeowners insurance are kept current, they are never required to leave the home or sell it.
• 4. The borrower can never owe more than the value of the home, and does not leave themselves or their family in debt and there are no monthly payments required. Setting up an updated will is a great idea to make sure that the proceeds are distributed appropriately.
• 5. The proceeds are based upon age, appraised value of the home, and current interest rates and are not taxable so they will not affect Social Security or Medicare benefits. They can be dispersed as monthly payments, put into a Line of Credit for later use, taken in a lump sum, or a combination of any of these options.
• 6. Reverse Mortgages have been around for 20 years (since 1989) and are regulated by the Federal Government so all lenders have to play by the same rules which means that costs, fees, and interest rates cannot be manipulated from one to another.
• 7. Reverse Mortgages can be used to payoff mortgage balances, pay for daily or unexpected expenses, home repairs, access to cash for enhancing retirement, or purchase a home that better meets your needs. They should not be used for investing, especially in risky investments that could be lost in a poor performing market.
• 8. Reverse Mortgages have a growing balance and the final loan balance equals the total proceeds used, interest, service fees, and loan costs. The loan is paid off only when the borrower(s) die, sell the home, or refinance.
• 9. BONUS! Reverse Mortgages can also be used to PURCHASE a primary residence home now. This works especially well for seniors who want to downsize or relocate into a better house and neighborhood. Please contact me for more information in this program!

Reverse Mortgages are a little more expensive than your average FHA loan. Do not make this decision quickly and ask yourself if you want to stay in your current home. Make sure that you get information from more than one source and when choosing a lender make sure they specialize in Reverse Mortgages and have been doing so for at least 2 years.

While a growing number of traditional lenders are adding Reverse Mortgages to their menu of programs, HUD reports indicate that a small group of lenders specialize in this program; and it is these lenders who help the majority of seniors choosing to obtain a Reverse Mortgage. Although Reverse Mortgages are by nature simple, you will appreciate working with an expert as you consider which Reverse Mortgage program is best for you, and how to structure the loan that best suits your needs. Everyone has a different set of needs and desires and only a careful look at all the options will ensure the best outcome. The Reverse Mortgage is not for everyone but every homeowner age 62 or older should take a look at them and determine if it fits with their long and sort term goals.

Nathan Johnson is an Account Executive for 1^st Reverse Mortgage USA and has been educating seniors in Colorado, New Mexico, Kansas, and Arizona about all the aspects of a Reverse Mortgage for over 7 years. He can be emailed at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or on the web at www.1strmusa.com. You can also call him at .

1^st Reverse Mortgage USA is recognized regionally and nationally as experts in Reverse Mortgage lending and is among an elite group of lenders who are authorized to underwrite and close Reverse Mortgages.

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