Helen Young is a lender with Choice Lending Corp. as well as a CPA. I had an educational meeting with her recently to discuss the products they offer. Of great interest to me was an area of specialization for Helen, Reverse Mortgages. This type of mortgage was something I thought of as a "last resort" for seniors who want to live in their homes but can't afford them. While there may be some truth to that, Helen opened my eyes to the other ways a Reverse Mortgage can help with financial planning for seniors. What is a Reverse Mortgage? In a nutshell, it is a financial vehicle which allows a homeowner who is at least 62 years old and has a good amount of equity in their home to take out a mortgage which pays them in exchange for ownership of the equity (some or all) in their home. A Reverse Mortgage can then take the form of supplemental income, a line of credit, financing for the purchase of a more suitable home.
According to Helen, "Reverse mortgages are becoming increasingly recognized by homeowners and financial advisors as a smart and safe way to access an important retirement asset: home equity. Most reverse mortgages are government-insured Home Equity Conversion Mortgages (HECMs). You will often hear the terms used interchangeably. Available exclusively to people age 62 and older, a reverse mortgage could help you live more comfortably and be more financially prepared for the future."
One of the most interesting points for me was that the HECM is insured by the Federal Housing Administration. This insurance feature guarantees that you will never owe more than the value of your home when the loan becomes due. No debt will be left to your heirs and if the loan balance is less than the market value of the home, the additional equity is retained by the homeowner/heirs if the home is sold. That was something I had not known.
If you are interested in learning more about this type of mortgage contact Helen Young at (619) 787-4453. She is a great resource if you are considering this as a tool for retirement planning.
Tracey Stotz has no ownership in Choice Lending and receives no referral fees.
