What is a Reverse Mortgage?
A Reverse Mortgage is a type of loan that allows homeowners age 62 and older to turn their home equity into cash, while still living in and owning their own home.
Do you need extra money for a single big expense, or just a little more money each month? With a Reverse Mortgage, you have the flexibility to choose how you want to be paid. You can choose a lump sum, a monthly payment, or even a line of credit.
Reverse Mortgages that conform to FHA guidelines are also called HECM loans - Home Equity Conversion Mortgages.
The government has established a few basic requirements that everyone must meet in order to be eligible for a Reverse Mortgage:
• You (and your spouse) must be at least 62 years old.
• Your home must have enough equity to consolidate all existing mortgages.
• The type of home must be FHA-approved, such as a single-family home.
Individual lenders also have their own criteria. By using reverseourmortgage.com, you can quickly find the lender and mortgage that is best for you.
*President Obama's Extension of the Reverse Mortgage limit
"Fifteen executive departments — each led by an appointed member of the President's Cabinet — carry out the day-to-day administration of the federal government." The responsibility of each appointed member is to "advise President [Obama] on any subject he may require relating to the duties of each member's respective office."
HUD (Housing and Urban Development), one of the executive departments that advises President Obama, announced on December 2, 2011 the extension of the $625,500 limit for Home Equity Conversion Mortgages (HECM), which are better know as Reverse Mortgages.
Why a Reverse Mortgage is Helpful in Today's Economic Environment
In September 2011 the President announced a plan to slash the federal deficit by more than $3 Trillion. The plan calls for $1.5 Trillion in new taxes as well as $580 Billion in cuts to Medicare and Medicade. If our deficit grows, additional cuts could be coming to Medicare and other social programs. A Reverse Mortgage could provide income to offset the possible short falls in these government programs.