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Reverse mortgages becoming cheaper for seniors 2010-05-26 Many retirees who feel their retirement income is inadequate may turn to reverse mortgages for relief. As the market begins to improve, securing a reverse mortgage may become less expensive for seniors, according to the Boston Globe. The maximum amount a retiree can borrow under a reverse mortgage loan is $625,000. The amount they are eligible for under the Home Equity Conversion Mortgage depends on the age of the youngest homeowner, current interest rates and the appraised value of the home, the Globe reports. Some potential borrowers have shied away from the process in the past due to confusion over lender fees and the overall transaction, but these variables may be changing. Many lenders are slashing origination and monthly service fees. Additionally, most HECM programs require borrowers to attend a no-cost counseling session to understand their rights and responsibilities under a mortgage loan agreement. Many retirees over the age of 62, the minimum qualifying age to secure a reverse mortgage, take out the loans to supplement their income or pay off debts during retirement. As the loan does not have to be repaid until the borrower passes away or relocates to another primary residence, reverse mortgages may be a good source of equity for some retirees.  |
