Why Haven’t Se­nior Home­own­ers Been Told These Facts?

Bet­ter read this if you own a home in the U.S. and were born be­fore 1954.

Daily Local News (West Chester, PA) - - BUSINESS -

It’s a well-known fact that for many se­nior ci­ti­zens in the U.S. their home is their sin­gle big­gest as­set, of­ten ac­count­ing for more than 50% of their to­tal net worth.

Yet, ac­cord­ing to new data from the Na­tional Re­verse Mort­gage Len­ders As­so­ci­a­tion, se­nior home­own­ers in the U.S. are now sit­ting on more than 5 tril­lion dol­lars of un­used home eq­uity.1 With peo­ple now liv­ing longer than ever be­fore and home prices back up again, ig­nor­ing this “hid­den wealth” may prove to be short sighted.

All things con­sid­ered, it’s not sur­pris­ing that more than a mil­lion home­own­ers have al­ready used a govern­ment-in­sured Home Eq­uity Con­ver­sion Mort­gage or “HECM” (more com­monly known to­day as a re­verse mort­gage loan) to turn their home eq­uity into ex­tra cash for re­tire­ment.

How­ever, to­day, there are still mil­lions of el­i­gi­ble home­own­ers who could ben­e­fit from this FHA in­sured loan but may sim­ply not be aware of this “re­tire­ment se­cret.”

Some home­own­ers think HECM loans sound “too good to be true.” After all, you get the cash you need out of your home but you have no more monthly mort­gage pay­ments.

NO MONTHLY MORT­GAGE PAY­MENTS?2 EX­TRA CASH?

It’s a fact: no monthly mort­gage pay­ments are re­quired with a re­verse mort­gage loan;2 the home­own­ers only have to pay for main­te­nance, prop­erty taxes, home­owner’s in­sur­ance and, if re­quired, their HOA fees.

An­other fact many are not aware of is that HECM re­verse mort­gages first took hold when Pres­i­dent Rea­gan signed the FHA Re­verse Mort­gage Bill into law 28 years ago in or­der to help se­nior ci­ti­zens re­main in their homes.

To­day, HECM loans are sim­ply an ef­fec­tive way for home­own­ers 62 and older to get the ex­tra cash they need to en­joy their re­tire­ment.

Although to­day’s HECM re­verse mort­gages have been im­proved to pro­vide even greater fi­nan­cial pro­tec­tion for home­own­ers, there are still many mis­con­cep­tions.

For ex­am­ple, a lot of peo­ple mis­tak­enly be­lieve the home must be paid off in full in or­der to qual­ify for a HECM re­verse mort­gage loan, which is not the case. In fact, one key ben­e­fit of a HECM is that it au­to­mat­i­cally pays off your ex­ist­ing mort­gage, which frees up cash flow, a huge bless­ing for se­niors liv­ing on a fixed in­come. Un­for­tu­nately, many se­nior home­own­ers who could ben­e­fit from a HECM loan don’t even bother to get more in­for­ma­tion be­cause of ru­mors they’ve heard.

That’s a shame be­cause HECM re­verse mort­gages are help­ing many se­nior home­own­ers live a bet­ter life.

In fact, a re­cent sur­vey by Amer­i­can Ad­vi­sors Group (AAG), the na­tion’s num­ber one HECM lender, found that over 90% of their clients are sat­is­fied with their re­verse mort­gages.

While these spe­cial loans are not for ev­ery­one, they can be a real life­saver for se­nior home­own­ers like Betty Carter, who re­cently took out a HECM loan with AAG so that she could fi­nally get the ex­tra cash she needed to fix up her house.

“With the help of AAG, I have been able to re­pair my home’s foun­da­tion that I had been putting off for sev­eral years, re­fin­ish the hard­wood floors, paint the in­te­rior and will have the ex­te­rior painted within a few days. My house is start­ing to look like my home again and it feels good,” says Carter.

The cash from a HECM loan can be used for any worth­while pur­pose. Many peo­ple use the money to save on in­ter­est charges by pay­ing off credit cards or other high-in­ter­est loans. Other com­mon uses in­clude mak­ing home im­prove­ments, pay­ing off med­i­cal bills or help­ing other fam­ily mem­bers. Some peo­ple need the ex­tra cash for ev­ery­day ex­penses while oth­ers sim­ply use it as a “safety net” for fi­nan­cial emer­gen­cies.

If you’re a home­owner age 62 or older, you owe it to your­self to learn more so that you can make an in­formed de­ci­sion. Home­own­ers who are in­ter­ested in learn­ing more can re­quest a free 2016 HECM Re­verse Mort­gage In­for­ma­tion Kit and free Ed­u­ca­tional DVD by call­ing Amer­i­can Ad­vi­sors Group toll-free at 1-866-584-2703.

At no cost or obli­ga­tion, the pro­fes­sion­als at AAG can help you find out if you qual­ify and also an­swer com­mon ques­tions such as: 1. What is the govern­ment’s role? 2. How much money might I get? 3. Who owns the home after I take out a HECM loan? You may be pleas­antly sur­prised by what you dis­cover when you call AAG for more in­for­ma­tion to­day.

FACT: In 1988, Pres­i­dent Rea­gan signed the FHA Re­verse Mort­gage bill into law.

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