Due to the mounting negative press associated with reverse mortgages, the National Reverse Mortgage Lenders Association (NRMLA) is planning a public affairs campaign to further educate homeowners and to spread the benefits of the loan to those who have only heard about its alleged downfalls. NRMLA does not want the negative press and misconceptions about the loan to prevent homeowners who could benefit immensely from a reverse mortgage from even considering the loan.

As part of the upcoming campaign, data about current reverse mortgage borrowers will be collected, including how they use their reverse mortgages and how it has affected their lives in terms of how the loan has helped them financially. This information will be shared with the public in order to portray the truth behind this type of financing and to show what a positive impact the loan can have on a homeowner’s life.

Despite Their Portrayal in the News, Reverse Mortgages Have Many Pros

This type of financing has plenty of advantages for homeowners, especially those who need assistance making their monthly mortgage payments. This loan does not require the homeowner to make any monthly mortgage payments as long as he or she meets the requirements of the loan. The homeowner can remain in the home without worrying about missed mortgage payments that could potentially lead to foreclosure. And the loan does not have to be repaid as long as the homeowner remains living in the residence.

If the homeowner has sufficient home equity, this loan enables the equity to be converted to cash. The homeowner can receive funds in varying forms for whatever expenses he or she desires. The homeowner can remain in his or her home without making monthly payments and receive money! Various lenders are now offering even greater incentives to homeowners that can help them gain access to more of their home equity, including elimination of the origination fee, elimination of the servicing fee, or both!

Reverse Mortgage Cons

There are effects of this loan that some may consider to be disadvantages. Because the homeowner does not make monthly mortgage payments, he or she will acquire debt over time. The accrued interest is added to the loan balance and must be repaid once the homeowner no longer lives in the home. Any part of the balance that exceeds the sale value of the home will be covered by the FHA unless the homeowner’s heirs wish to retain the home. Also, if a homeowner receives funds from his or her reverse mortgage, the amount of available equity in the home will decrease over time. If a homeowner is not planning on living in the home for a significant length of time, this type of loan would not be very beneficial because it is designed for long-term use.

Find Out If a Reverse Mortgage Could Benefit You

This loan requires that the youngest owner on the title is at least 62 years old and that the home being financed is used as their primary residence. Homeowners should conduct research and speak with a loan specialist to discuss available options to determine if he or she could benefit from this type of financing. This loan offers many benefits to homeowners and could potentially be a lifesaver. Homeowners should not let negative press persuade them from considering a reverse mortgage, but should instead research the facts and make their own informed decision.

Author Bio: Victoria Belle-Miller is the newest member of the Senior Reverse Mortgage writing staff. Her background in journalistic writing and ability to evaluate the issues that Americans face in daily life make her a strong addition to the team and a valuable source of sound mortgage advice.

Category: Finances
Keywords: reverse mortgage, NRMLA, FHA reverse, home loan, HECM, pros and cons, seniors, equity