Once thought to be an exotic loan product for the cash-strapped, reverse mortgages have evolved into not only a common and powerful financial tool but are now being factored into seniors’ retirement plans. Home Equity Conversion Mortgages or HECMs are exclusive to those 62 or older and can help fund longevity.
With the federal government regulating the industry, reverse mortgages are safe. In fact, nearly 90 percent of reverse mortgage loans in the U.S. are insured by the Federal Housing Administration. Among the primary benefits borrowers will find is the elimination of their monthly mortgage payments. The proceeds from a reverse mortgage can be made available through a lump sum payout, line of credit or through monthly installments.
As senior home equity reached $6.8 trillion this year, it is no small wonder that more retirees are looking to a reverse mortgage.
Today, convventional conforming no-point 30-year fixed mortgage rates are averaging 4.625 percent, 15-year rates are near 4.125 percent and the 5-year ARM is averaging 4.125 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.