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Reverse Mortgages Becoming More Affordable

Published on 09/27/2010

The reduction in reverse mortgage out of pocket costs means that seniors will be able to easily access more money by using reverse mortgage to tap into home equity.

Reverse mortgage fees have been significantly cut as they are either waived on fixed rate HECM reverse mortgages or are often paid by the lender. Because of this, fees have been reduced by more than half in many cases.

"Several thousand dollars ends up back in the homeowners pocket," said Judith Smith, a mortgage broker with Cendera Funding.

The introduction of the Home Equity Conversion Mortgage Saver Option by HUD will also enable even more seniors to access money through reverse mortgage. This new product allows consumers to use only part of their home equity at reduced costs.

These changes have drastically strengthened the HECM product which has resulted in increased reverse mortgage applications in recent months.

"Reverse mortgages are becoming more mainstream." said Scott Norman, president of the Texas Mortgage Bankers Association. "A reverse mortgage is not for everybody, but every extended family in Texas has a member that could benefit from one."

AAG is ecstatic about these developments as they mean that more seniors will benefit from utilizing reverse mortgage to become more financially secure. Our AAG specialists are ready to answer any of your questions about the changes being made to improve the reverse mortgage product.

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