Older Americans Pushed Below Poverty Level Could Get Aid from Reverse Mortgages

More Americans are living below the poverty level as a result of the recession. The U.S. poverty rate rose 13.2% in 2008 to the highest level in 11 years, according to the U.S. Census Bureau. An annual report on income shows that 39.8 million Americans of all ages lived in poverty last year. For some homeowners over 65 who find themselves living below the poverty level, a reverse mortgage could be a way to boost their income.

What Can a Reverse Mortgage Do for You?

A reverse mortgage allows you to convert some home equity into cash. Only homeowners over 62 can apply for reverse home loans on their principal residence. For many people, the most appealing aspect of reverse mortgages is that the money can be used for any purpose. Some seniors are even using Home Equity Conversion Mortgages(HECMs) to purchase a smaller residence.

What Are the Drawbacks to Reverse Home Loans?

Not everyone believes reverse mortgages are a good deal. Some have cautioned that some homeowners sign up without understanding all the fees and terms. Others fear homeowners that they could use up all the money from a reverse mortgage if they have a long lifespan, or have nothing left to leave their heirs. These are all legitimate concerns that should be discussed with a qualified reverse mortgage counselor. Homeowners can get all their questions answered about these loans by scheduling an appointment by phone or in person with a reverse mortgage counselor.

Because so many Americans have lost their source of income and/or seen their retirement savings dwindle, it’s likely that more seniors will turn to reverse mortgages. Begin your fact-finding mission about reverse home loans here to compare deals.

This entry was posted on Monday, September 14th, 2009 at 7:17 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.