Reverse Mortgage Loan Blog

If you’re still watching your favorite programs on an old TV set, perhaps you’re looking at upgrading to a high-definition model.

You’ve heard prices have tumbled. Should you buy now or wait in hopes that prices will fall more?

Homeowners considering a reverse mortgage face a similar dilemma. In recent months, lenders have slashed closing costs and fees and added new features for reverse mortgages.

A reverse mortgage is a loan against home equity that doesn’t have to be repaid until you move, sell your home or die. You can receive a lump sum, line of credit, monthly payments or a combination. To qualify, you must be 62 years old or older. If the home is owned jointly, both owners must be at least 62.

The amount you can borrow is based on your home’s value, current interest rates and your age.

One reason for the growing interest in reverse mortgages is that seniors with home equity can use the loans to pay medical bills or increase retirement income while staying in their homes.

In the past, costs and interest rates for those reverse mortgages were higher than for federally insured ones. But that’s changing.

For homeowners who don’t need the money immediately, patience could pay off, says John Rother, director of policy and strategy for AARP.

A reverse mortgage “should be done very carefully and only for certain urgent situations,” Rother says. “We think that the increasing competition in the next year or two will lower these costs.”

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