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Home Equity Loan - A Reverse Mortgage Could Provide a
Comfortable Retirement!
While only comprising about 1% of all mortgages, the reverse
mortgage has gained in popularity in recent years. Federally
insured since the late 1980's, the reverse mortgage allows owners
of paid-off homes to borrow against the equity in their homes in
the form of a lump sum, a line of credit, or in the form of
monthly payments. The loan is repaid when the owners die or when
the home is sold or no longer occupied.
In the early years of its existence, the reverse mortgage was
regarded as a "last resort" step to avoid foreclosure, pay medical
expenses or keep the home from disrepair. More recently,
however, retirees have been finding creative ways to use the
equity in their homes to allow their retirement years to be more
enjoyable.
The huge growth of the housing market during the last five years
has left millions of homeowners with large amounts of equity in
their homes. Californians who bought homes in the early 1960's at
modest prices are now retiring; many of them have home equity in
the mid-six figures. With that sort of equity, homeowners are
using their equity to buy recreational vehicles, boats, luxury
vacations, and even second homes. The structure of a reverse
mortgage makes it possible for some homeowners to pay cash for a
vacation home, while continuing to live in their primary
residence for as long as they like, or are able. Once they die,
the primary residence would be sold to pay pack the loan, while
the second home would become part of their estate.
This has provided a rare opportunity for many couples, who
struggled to raise families and pay mortgages during the working
years, to enjoy a few luxuries in their retirement years. Couples
who could never afford to travel can now dip into their home
equity and see Europe or take that cruise that always eluded
them.
While this may seem like a win-win situation for all involved,
those in the lending industry express caution. For most people,
the equity in their home is their single largest asset, and
borrowing against it should done only after careful
consideration. What if a lengthy hospital stay became necessary?
Would the homeowner have sufficient funds to pay for that after
buying a second home through a reverse mortgage? What if a
husband or wife became incapacitated and required permanent
housing in a nursing home? These are things that must be
considered before using home equity for a houseboat or RV, and
those considering such a move should consider discussing their
plans with a financial advisor.
Despite the potential drawbacks, the use of the reverse mortgage
to fund a fun and adventurous retirement seems to be growing.
With interest rates still near all-time lows, the trend will
almost certainly continue in the near future.
©Copyright 2005 by Retro Marketing. Charles Essmeier is
the owner of Retro Marketing, a firm devoted to informational
Websites, including http://www.End-Your-Debt.com/
and http://www.HomeEquityHelp.net/
 MORE RESOURCES updated Thu. February / 09 / 2012
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Decision Time: Home
Equity Loan or Home Equity Line of Credit?
Home equity loans and home equity lines of credit continue
to grow in popularity. According to the Consumer Bankers
Association, during 2003 combined home equity line and loan
portfolios grew 29%, following a torrid 31% growth rate in
2002.
When is the Right Time
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You've heard that interest rates are down and you think it
could be time to refinance your existing mortgage, but the
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Available?
It isn't difficult to get a homeowner loan if you own your
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to Value of your property and some as much as 125% Loan to
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If you're actively looking for cheap homeowner loans, there
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No money down mortgage loans enabled more people to own
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Trying to find a quick homeowner loan can seem difficult at
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First Time Home Buyer
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When it comes to first time home buyer loans, a little
research can save you thousands of dollars over the life of
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Bad Credit Home
Loans
There was a time that seems like decades ago when people
with less than pristine credit were not able to get home
loans. At that time people with bad credit were all but
assured that their dreams of homeownership would never come
to fruition.
Poor Credit Home
Mortgage Loans - The Role of the FICO Score
If you have bad credit history and are looking to get a
home mortgage loan, then chances are you are going to need
to know all about how the FICO credit scoring system
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Mortgage Refinancing -
Does Size Matter After All?
Hopefully your ego has never had to experience the words,
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People with bad credit that are looking to get a home
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approved. Adverse credit history can mean a little more
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Reverse Mortgages - A
Tax Free Income For Senior Citizens
I fully realize if it sounds too good to be true, it
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How To Save Money On
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Obtaining a home loan is arguably the most expensive
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worth pursuing.
What Exactly Is A
Reverse Mortgage And How Does It Work?
A reverse mortgage is a certain loan that allows the older
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With this type of loan the bank is actually paying you
monthly out of the equity in your home.
Essence of Self
Certified Mortgages
Your search for a mortgage isn't leading results. Check for
any impediments.
Home Loans For People
With Adverse Credit History
Whether you are planning to purchase a home for the first
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you have adverse credit history. Sub prime lenders
specialize in offering loans to people who have a high-risk
credit history.
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