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Funny thing is, that the falling home prices have an influence on the reverse mortgage market. I wonder this, because the financial needs of a senior should be the only reason to take a reverse mortgage loan, not the market circumstancies. If the home equities have fallen, the maximum loan amounts have fallen too, but on the other hand the interest rate levels are on a historically low level, which makes the reverse mortgage a good deal. Those seniors, who took the loans on the high economy time, i.e. 2008 or earlier, have situations, when the loan sums are higher than the home prices without having any troubles with the lender. If they have had a variable interest rates, they have really enjoyed about their good deals. 1. The Lender Will Always Get The Whole Sum Owed. If a borrower will move away, sell the home or die, the home will be sold and the selling price is used to pay away the reverse mortgage loan capital and all the expenses, including the interests. In that case, that the selling price will not cover the costs, the obligatory mortgage insurance will pay the missing part. This means that the lender will always get, what the borrower owes and the borrower is safe, because his other assets will never be used to pay the reverse mortgage. So the home equity and the insurance are the only guarantees for the loan. 2. Why The Falling Home Prices Are An Opportunity For A Senior? Because the reason to take the reverse loan is the financial situation of a senior, not the general economic circumstances, the timing is good, when a senior has calculated that he will need some extra cash. The down economy offers the lower interest rates and the up economy the bigger loan sum. 3. The Main Reasons To Take The Reverse Mortgage. When earlier seniors have taken the reverse loans to build up a stable and realistic financial plans for the rest of their lives, today more and more seniors 62 or over are after the lower monthly payments. There are also seniors, who would have sold their homes, if the economy would have been different, but because of the low home prices and low demand, they have rather taken the reverse loans. 4. The Reverse Mortgage Can Save Those Close To The Foreclosure. If a senior has a normal mortgage and he is unable to make the monthly payments, the reverse loan can bring a great help. If he has enough equity in the appraised value of the home, then he can think to take the reverse loan. This is a good move, because the reverse loans have no monthly payments. Another benefit is, that when a senior will take the reverse loan, he has to pay away the normal mortgage, which will bring him even more disposable money every month. Juhani Tontti, B.Sc., Marketing. When you think the reverse mortgage, the time is right, when you need that money from the reverse loan. Visit: reverse mortgage loan
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