Reverse Mortgage Demand Expected To Soar

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<h1>Reverse Mortgage Demand Expected To Soar</h1> <p align=right>by N. Sioris</p> <div align=justify>The number of federally insured reverse mortgages jumped a stunning 77 percent in 2006, and legislators and lenders are bracing for another huge increase in 2007. Reverse mortgages allow homeowners age 62 and older to turn the equity in their home into tax-free cash without having to move, sell their home or make monthly mortgage payments. There are no credit or income qualifications for a reverse mortgage. Social Security and Medicare benefits are not affected by taking out a reverse mortgage. With 78 million baby boomers about to turn 62 in the next couple of years, reverse mortgages are expected to become a pivotal part of many retiree's overall financial planning formula. More seniors are recognizing that traditional retirement tools, such as IRA's, pensions, 401(k)s and meager Social Security benefits are not going to provide sufficient income to help fund everyday living expenses and health care over their life expectancy. The federal government is also recognizing that the strain that 78 million baby boomers will place on the existing entitlement programs; Social Security and Medicare is a disaster waiting to happen. Lawmakers are so concerned about this looming problem that they are actively encouraging the use of reverse mortgages. They are lowering the HUD costs on a reverse mortgage if the senior uses some or all of the loan proceeds to purchase long term care insurance. The House and Senate are expected to pass legislation that will lift the cap on the number of reverse mortgages that can be federally insured at any one time. Brian Montgomery, FHA commissioner and assistant secretary of Housing at HUD, said that he anticipates reverse mortgages will one day be as commonplace as 401(k)s and other retirement planning tools. Because of the increasing demand for reverse mortgages, more and more lenders are entering the market place. In addition to the HUD insured reverse mortgage, known as HECM, there are also privately insured reverse mortgages, known as proprietary loans. Typically the proprietary loans allow for higher loan amounts and more flexibility in payment streams. One of the bad raps that reverse mortgages have had in the past is that the costs for obtaining a reverse mortgage are two to three times higher than obtaining a regular forward mortgage. Although, there are good arguments to be made to justify the costs, competition in this growing market is working to bring the costs down for consumers. Meanwhile, the federal government is making an effort to push down the costs for HECM reverse mortgages as well. According to HUD officials, the Department of Housing and Urban Development, which insures most reverse mortgages, is looking into lowering the origination costs and mortgage insurance premiums that homeowners pay. At the same time, Ginnie Mae, a federal housing finance agency, announced that it will begin packaging reverse mortgages for sale on Wall Street. Ginnie Mae's move is widely expected to lower interest rates that consumers pay, since studies have shown that Ginnie Mae's guarantees in the traditional mortgage market lower rates by between 0.5 percent and 0.8 percent. Competition in the reverse mortgage market is going to be good for consumers. As with all mortgages, remember to study the contract details before jumping in because there may be lower-costs between lenders and loan types. There are many myths and misconceptions regarding reverse mortgages. To find in depth information regarding reverse mortgages or to locate a lender or loan advisor in your area please visit us at http://www.letyourhomepayyou.com You will find unbiased information as well as a reverse mortgage loan calculator, so that you can see approximately how much money you might qualify for. </div> <p align=center>Article source: <a href="http://www.ArticlePros.com/finacces/Retirement-Planning/article-59002.html">ArticlePros.com</a></p> <table align=center width=550 cellspacing=1 bgcolor=silver cellpadding=5> <tr bgcolor=antiquewhite> <td> <p align=center><b>About the author</b></p> <p align=justify><br /> N.Sioris is a senior reverse mortgage specialist and the administrator of the reverse mortgage informational website called, Let Your Home Pay You.com<br /> 1-888-269-1098</p> <p align=left><a href="http://www.letyourhomepayyou.com" target="_blank" title="will open in new window" class=blue>http://www.letyourhomepayyou.com</a></p> <p align=center><input type=button class=asubm value="Other articles by N. Sioris" onclick="document.location='http://www.ArticlePros.com/author.php?N. Sioris'" style="height:20px;cursor:hand"></p> </td> </tr> </table>