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Harbor Mortgage Solutions

Mortgage Services for Massachusetts and Rhode Island

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  • Conventional Mortgages
    • Buying a Home
    • Home Equity Financing
    • Refinancing Your Home
  • Reverse Mortgages
    • Types of Reverse Mortgages
    • Reverse Mortgages for Condominium Owners
    • Reverse Mortgage Information
    • Navigating the Reverse Mortgage Process
    • Reverse Mortgage Rules
    • Reverse Mortgage Myths
  • Resources
    • Blog
    • Webinars
    • FAQs
    • Glossary of Terms
  • About Us
    • Meet Our Team
    • Professional Network

Record Setting Home Values – A Godsend To Savvy Seniors Who Want To Age In Place

June 22, 2021 //  by George Downey

Ideal market conditions empower senior homeowners the ability to lock in historic home values and increase financial security without selling or moving.

The combination of the historic rise in home values in 2021 coupled with record low interest rates have significantly increased the financial benefits reverse mortgages provide for senior home owners. 

Often disparaged and misconstrued, the HUD/FHA insured Home Equity Conversion Mortgage (HECM)reverse mortgage was created to help aging home owners utilize a portion of their home equity (housing wealth) to increase financial security.  The HECM terms, uniquely designed to bolster retirement finances, are often misunderstood and thought to be inappropriate.  That is changing as more financial advisors and homeowners are enlightened and learn the facts.

REVERSE MORTGAGE FACTS VS. FICTION
FICTIONFACT
Bank owns the home – borrowers must transfer title to the lenderBorrowers never give up ownership
Loan of last resort – only suitable for those who are desperate or not eligible for traditional financing.A valuable financial resource to increase access to cash and extend retirement security without monthly payment obligations.
Home must be owned free and clear to be eligibleMost borrowers use proceeds to pay off existing mortgages and eliminate payment obligations
Loan costs are significantly higher – lenders charge excessive feesFHA regulates costs, which include standard loan costs + FHA insurance premiums. Lenders cannot charge excessive fees.
If the loan balance grows to exceed the home value, the borrower or the estate is liable for the differenceReverse mortgages are non-recourse loans – neither the borrower or the estate will ever owe more than the property value at the time of repayment.
Funding can be reduced or frozen if/when financial or real estate markets decline.Access to funds and loan terms are guaranteed by FHA insurance – can never be changed as long as loan remains in good standing 

Reverse Mortgage Benefits

  • No monthly payment obligations – prepayments are permitted without penalty but not required. Monthly charges are deferred and accrue.
  • Credit line growth – the undrawn balance of the credit line grows (compounding monthly) at the same rate charged on funds borrowed.
  • No maturity date – repayment not required until no borrower resides in the property.
  • Non-Recourse loan – neither borrowers nor heirs incur personal liability.  Repayment of loan balance can never exceed the property value at the time of repayment.  If loan balance exceeds property value at time of repayment, the lender and borrower(s) are protected by FHA insurance.
  • Access to funds and loan terms are guaranteed – cannot be frozen or cancelled as long as the loan remains in good standing.
  • Borrower obligations (to keep loan in good standing) are limited to:
    • Keeping real estate taxes, liability insurance, and property charges current
    • Providing basic home maintenance
    • Living in the property as primary residence

To Learn More

While a reverse mortgage offers valuable and distinctive benefits, it is not suitable for everyone. To determine if one could be a good fit, consult a Certified Reverse Mortgage Professional (CRMP).  Extensive information about reverse mortgages and a list of CRMPs is available at www.ReverseMortgage.org, the website of the National Reverse Mortgage Lenders Association, Washington, DC.

George Downey, CRMP, (NMLS 10239), is the CEO and founder of Harbor Mortgage Solutions, Inc., Braintree, MA, a mortgage broker licensed in Massachusetts (MB 2846), Rhode Island (20041821LB), NMLS #2846.  Questions and comments are welcome.  Mr. Downey can be reached at (781) 843-5553, or email: GDowney@HarborMortgage.com

Category: UncategorizedTag: age-in-place, reverse mortgage, seniors

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Recent Posts

  • Historic Home Prices Benefit Seniors Who Don’t Want To Sell
  • How To Eliminate Mortgage Payments and Increase Financial Security Without Selling the House
  • Senior Homeowners Relieved from Making Mortgage Payments
  • Draining Retirement Savings to Pay Debt is Dangerous – There May Be a Better Way
  • Record Setting Home Values – A Godsend To Savvy Seniors Who Want To Age In Place

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Braintree, MA 02184

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