Recent Changes

Reverse Mortgage Home >>> Reverse Mortgage Changes

3/10/2011

The government has been trying to find ways to protect the financial well being of the American people by imposing stricter regulations regarding bank fees and charges. They are forcing financial institutions to be more upfront about previously hidden fees which added up to an absurd amount of excessive charges.

Fortunately some of these changes have been implemented on the reverse mortgage system..  Reverse mortgages were already an attractive option for senior citizens and recent adjustments have created an even more appealing opportunity.

With a reverse mortgage you are able to enjoy the benefits of staying in your home and retaining possession while the bank pays you.  You have a variety of payment options but most seniors settle on receiving a monthly check.  Instead of sending a payment off to the bank every month, you’ll receive one from the bank to pay you for the equity you’ve built up in your home.

The newest version of the reverse mortgage program offers much lower start-up costs saving senior thousands of dollars on imposed fees.  This new loan is called a Home Equity Conversion Mortgage Saver.  The mandatory insurance premiums required for this new loan are only .01 percent of the value of your home. Other programs carried an average hefty 2 percent.  To give you an idea of what a big deal this is I’ll give you an example.  For a $400,000 home the new program would impose a fee of $40.00 to cover the required upfront insurance premium.  With one of the older programs that fee would have amounted to $8000!

Then there’s more good news.  The private lenders offering reverse mortgages have also reduced their origination fees adding additional savings to the offer.  Some lenders have even waived these fees making a reverse mortgage a very attractive financial opportunity.

One of the attractive characteristics of a reverse mortgage is the ability of senior citizens to shop around for the best offer they can find.  Lenders can set their own rates and fees giving potential consumers the advantage of shopping around and looking for the best rates.

Other changes included in this new program have put a tighter lid on the amount available for borrowing.  It comes to 10 – 18 percent less and is dependent on the age of the individual applying for the reverse mortgage.

This new reverse mortgage is very advantageous to the consumer. It is a perfect time to begin the process.