Tag Archives: Senior Reverse Loan

Reverse Mortgage Closings to Rise Above 80,000 Units in 2011

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As the senior citizens in Eugene/Springfield gets older each year, the opportunity of using an FHA Insured Reverse Mortgage might be the answer to many monetary problems.

The New York Daily news is reporting that while the number of Reverse Mortgages originated nationwide fell 35% to 72,683 in 2010, demand is expected to rise with the release of the HECM Saver. However, as with all Reverse Mortgage products, consult with us for advice on which one is best for you.

Reverse Mortgages require no monthly payments from borrowers. Loans are made for up to just over half of the value of borrowers’ homes, less any outstanding liens against the property. The maximum property value to lend on is currently $625,500.00; the loan is due and payable when the borrowers die, move out or are gone for 12 consecutive months.

Insured by FHA since 1989, reverse mortgages gained popularity in the past decade. But their use dropped sharply last year.

The decline occurred, in part because in late 2009, the FHA reduced the amount of money borrowers could receive from reverse mortgages by 10%. At the same time, home values remained depressed. Both factors make it more difficult for would-be borrowers to qualify for loans.

Demand may likely get help from a new, lower fee version of the loan called the Home Equity Conversion Mortgage Saver. Industry experts are expecting a rise in reverse mortgage closing to climb to between 80,000 and 85,000 units nationwide, up from 72,683 units closed in 2010.

The Saver loan has about 1/3 lower fees than the traditional reverse mortgage product. The tradeoff, however, is that the Saver loan payout is smaller than the standard loan’s.

For cash-strapped seniors looking for a short term solution, the HECM saver may be a benefit.

Contact Us

If you have questions about a Reverse Mortgage we will not pressure you to take one out, but it may be in your best interest to check out one now, rather than later. Please contact one of us today at 541-342-7576. Alpine Mortgage Planning is located at 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. You can also e-mail Laurie here or Fred here. We are here to help you make the decision that is right for you. Reverse Mortgages are not for everyone, but they are an excellent choice for some people. Isn’t it time that you checked out the advantages of a Reverse Mortgage?

Remember, we offer information and sound advice with no pressure.

Reverse Mortgages are down for year nationally

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Given the amount of advertising being done for reverse mortgages in Oregon and nationwide, it is surprising but the number of reverse mortgage is actually down.  “This article explains a lot of the reasons behind reverse mortgages actually being off nearly 40 percent so far this year. Not only that, but the annual pace translates to only 70,000 transactions nationally for the entire year.

Wholesale and retail lenders active in the reverse mortgage market are less than half of past year’s lenders, according to Reverse Mortgage Insight, watching industry trends.”

In my opinion, reverse mortgages should be on the rise as interest rates are at all time lows, fees are lower than they have been on reverse mortgage, stock portfolios are oftentimes cut in half or worse and baby boomers reach retirement age. So, the question is, Why?

The first answer has to do with property values. A lot of seniors that still owe money against their home no longer have enough equity to qualify for a reverse mortgage due to falling property values, but that doesn’t explain the large number of seniors that own their homes outright. It may be for them that they believe they can’t get enough from their home now, with the reduced values, but in reality, with the changes in the program to mostly fixed rates from the primarily adjustable reverses in the past, more money is often available.

Some may think waiting for the recovery of the housing market may be their best bet, however, there are possibilities that FHA will change maximum mortgages for reverse mortgages in the future (down) and make this the wrong choice. There are others that are taking advantage of historic low rates on forward mortgages, but this still leaves them with monthly payments.

So, what does that leave? I think it is a lot of an public relations problem. A number of critical reports in 2010, from the National Consumer Law Center, Consumer Reports, US News & World Report, and the Comptroller of the Currency, put a lot of people off of reverse mortgages. The report from the Comptroller of the Currency even compared reverse mortgages to subprime mortgages which I believe is a injustice to the program. I believe sentiment on reverse mortgages has swung too far in the opposite direction – from complacent acceptance to paranoid rejection – and will at some point swing back.

One bright spot for reverse mortgages was reported in Reverse Mortgage Daily in that for the first time since December 2009, reverse mortgage were on the rise in July. This could mean that the market has hit bottom. Continued erosion of retirement accounts and low rates and fees on reverse mortgages could be just the ticket for many seniors in the days to come.

It has always been Laurie and my belief that an informed consumer can make a better decision than one that is making their decision based on feelings. These articles and reports are worth reading and should be considered before taking out a reverse mortgage. Reverse mortgages are not for everyone, but they are for more people than are taking advantage of them currently.

Contact Us

If you have questions about a Reverse Mortgage we will not pressure you to take one out, but it may be in your best interest to check out one now, rather than later. Please contact one of us today at 541-342-7576. Alpine Mortgage Planning is located at 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. You can also e-mail Laurie here or Fred here. We are here to help you make the decision that is right for you. Reverse Mortgages are not for everyone, but they are an excellent choice for some people. Isn’t it time that you checked out the advantages of a Reverse Mortgage?

Baby Boomers and the effect on US economy

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(Editor’s Note: The following article is by Samantha Taylor, a Community Mentor with experience writing about the mortgage industry. Today, she explains the effect baby boomers will have on the US economy. As one, I can tell you we are going to be a major financial force to be reckoned with.)

How baby boomers will affect US economy in the forthcoming years

Baby boomers, who’re US citizens born between1946 and 1964 are expected to have a great impact on the economy. Here’s how the baby boomers will affect the US economy as a whole.

How inequality among boomers may affect the economy

Most of the baby boomers are affluent and educated thus controlling about $7 trillion of the overall household wealth of the nation. However, there is significant inequality in the group; most of them don’t have the required education. Moreover, the boomers in general are less educated than the present generation. So, a considerable portion of the boomers have been hard hit by the economic recession with most of them not being educated enough to sustain their job. Among the relatively old boomers, only one in four has the graduated degree. So, those without the required college degree have already experienced involuntary unemployment. The division between the educated and uneducated is quite imminent and more so with the immigration during 20th Century.

The women and disadvantaged minorities in the Boomer generation are however at higher risk of not receiving pensions at retirement. This, in turn, is likely to increase the demand for public assistance programs, such as, subsidized housing and Medicaid, in order to help the boomers sustain themselves in the forthcoming years. The experts believe that it’ll affect the state budgets, Social Security benefits and social safety net for the younger generation as well.

How consumer spending may affect the economy

As per the US Blue Chip Consensus forecast, the real consumer spending will grow by only 2% in the decade ending in 2015 as compared to 3.7% growth annually in the10-year period that ended in 2010. According to experts, it is the slowest long-term growth rate since 1940. Real after-tax personal income is also expected to get reduced from 3.3% (in the period that ended in 2000) to 2.4% in the decade ending in 2015.

However, experts are of the view that the baby boomers will try to increase savings, which in turn, is expected to benefit financial services. Due to the recession and the collapse of asset values, the boomers have tried to cut back expenses and increased savings as much as they can. Most of them have been able to save for retirement though many of them have experienced a big dent in their 401(k) and other retirement plans.

This boomer psychology is expected to affect different sectors of the economy in the forthcoming years. Read on to know how it’ll affect the health care and housing sector.

· Home renovation – Home improvements and renovations may also be the key focus of spending among the baby boomers. Hence, we may find an increasing number of baby boomers applying for reverse mortgage loans.

· Health care – Boomers are likely to spend more on health care. The spending on health care is expected to jump from 4.6% in 2010 to about 7.2% in 2018.

The industry experts are of the view that the baby boomers are likely to spend on daily necessities rather than using their saved amount to purchase luxury items, such as, jewelry, clothing, watches, fashion accessories, etc. According to the Bureau of Labor Statistics Consumer Expenditures Survey, there will be about 27% overall drop in the spending on luxury and decorative items for the house.

How migration of boomers can affect the economy

As per industry reports, boomers more than 55 years of age are migrating to different  places within US. Due to immigration, the senior population of Georgia is expected to increase by 40% by the year 2020. Whereas, out-migration have reduced dramatically in several northern cities like Chicago, Boston, Philadelphia and New York.

The growing number of boomers in a specific geographical location may increase the demand for transportation, health and senior oriented services that in turn will affect the economy as a whole. Federal aid is distributed on the basis of population. So, if the migration trends continue, then certain regions and states are likely to experience serious economic consequences in the forthcoming years.

Samantha Taylor is the Community Mentor of MortgageFit and has been contributing her suggestions to the Community since 2005. Not just that, she has also made notable contributions through the various articles written on different subjects related to the mortgage industry. This article takes an economic view of reverse mortgages.  Few of her popular articles would include names like ‘Mortgage that you can afford’, ‘Mobile Home Loan with Bad Credit’, and ‘How much mortgage can I borrow?’

Contact Us

If you have questions about a Reverse Mortgage we will not pressure you to take one out, but it may be in your best interest to check out one now, rather than later. Please contact one of us today at 541-342-7576. Alpine Mortgage Planning is located at 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. You can also e-mail Laurie here or Fred here. We are here to help you make the decision that is right for you. Reverse Mortgages are not for everyone, but they are an excellent choice for some people. Isn’t it time that you checked out the advantages of a Reverse Mortgage?

How Oregon Financial Planners View Reverse Mortgages

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When researching what our Oregon Seniors can expect with retirement, I found out that a record low of only 13% of responding seniors (in an Employee Benefit Research Institute survey) said they are very confident that they have enough money to live comfortably in retirement. Because retirement assets may continue to dissipate and entitlement programs may dwindle, many financial analysts view reverse mortgages as one tool to buoy finances.

When baby boomers are in their 70’s they may have to look to their houses for needed income support. Statistically speaking, at that time pensions may be gone and people will have to create their own income stream. It’s important to make sure you don’t outlive your assets; it’s not about stock market returns, but about how you are going to get a paycheck for the rest of your life.

For those better off baby boomers, reverse mortgages can be viewed more as a financial safety net, but, with time, experts believe the product’s popularity will continue to rise. For many of our senior citizens in financial difficulty, an Oregon Reverse Mortgage may be the only way out.

In the next 10 or 15 years Oregon Reverse Mortgages will be as common as the standard forward mortgages. Two of the biggest assets for retirees are homes and retirement accounts and once the retirement account is spent, an Oregon senior is only left with the home. Many seniors will have to access this equity to continue their income stream and possibly could not qualify if trying for a forward mortgage due to income or credit. Neither of these are a problem with an Oregon Reverse Mortgage.

In deciding whether to advise an Oregon Senior on a reverse mortgage, it’s critical to know their desire to stay in their home, whether they are in danger of depleting his/her assets, or might be facing a catastrophic event. That is why all of our Oregon Reverse Mortgage applications are one-on-one with our clients so that we can determine how best to help them.

Contact Us

If you have questions about a Reverse Mortgage we will not pressure you to take one out, but it may be in your best interest to check out one now, rather than later. Please contact one of us today at 541-342-7576. Alpine Mortgage Planning is located at 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. You can also e-mail Laurie here or Fred here. We are here to help you make the decision that is right for you. Reverse Mortgages are not for everyone, but they are an excellent choice for some people. Isn’t it time that you checked out the advantages of a Reverse Mortgage?