IT'S TIME TO LISTEN TO THE SOUNDS OF A REVERSE MORTGAGE

By Max Sattanathan, President & CEO of Reverse Ultra

Five years ago, when I would mention "Reverse Mortgage" to certain financial professionals, I was basically ignored. Today, when I utter the same two words, the response is something like that old E.F.Hutton commercial where the room comes to a dead silence and everyone perks up their ears.

The fact that a Reverse Mortgage is an excellent way for elderly homeowners to convert equity into a steady income stream hasn't stopped the inherent fear that there's something nefarious about a Reverse Mortgage.

With today's global economy in shambles, seniors may well need a way to supplement income from Social Security, pension plans and life savings.

Reverse Mortgages are becoming popular in America according to the U.S. Department of Housing and Urban Development (HUD).

Those applying for a Reverse Mortgage must be at least 62-years-old, own the home they live in or have a low mortgage balance that can be paid in full when the Reverse Mortgage is closed.

The advantages of a Reverse Mortgage include living in the home as opposed to moving out, if the home is sold to raise cash. Also, a Reverse Mortgage allows for a steady non-taxable income stream to help with anything such as home remodeling, medical bills, or any other purpose.

The pay-out on a Reverse Mortgage can be via equal monthly payments as long as at least one borrower lives in the home, fixed monthly payments over a selected number of months, via access to a line of credit or through a line of credit as unscheduled payments or installments.

A Reverse Mortgage does not have to be repaid as long as the homeowner lives in the home.

Many objections to Reverse Mortgages come from the heirs of the homeowner. They worry that they may be responsible for repaying the Reverse Mortgage if the homeowner passes away. But, in that situation, the Reverse Mortgage can be satisfied by the heirs selling the home and repaying the loan. If the mortgage is upside-down, they can just let the bank take it back with no penalty.

While not for everyone, for some, a Reverse Mortgage can be music to their ears!