Why Are Reverse Mortgages Important to Senior Citizens? by Craig Castle

In Texas and many other parts of the country, senior citizens are being  squeezed. They receive, on average, $965 per month in social security. And,  while property taxes vary, a senior in many Texas cities with a home valued at  $100,000 will pay more than $200 per month in property taxes alone. Add to that  the high cost of necessities like health care, prescription medicine, utilities,  and mortgage payments, and the financial picture can be very bleak. It’s no  wonder that many seniors face foreclosure or tax liens on their homes.

“Reverse mortgages are important to Texas seniors because they allow them to  obtain a loan against the equity in their home—often their single largest  asset—without making monthly payments to repay that loan. That means that with a  government-insured reverse mortgage, a senior will never lose his or her home to  a bank simply because he or she could not make a payment,” said Craig Castle, a  San Antonio reverse mortgage specialist for the past four years.

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So why don’t more Texas seniors take advantage of this financial product?

Castle says that in his experience, seniors shy away from reverse mortgages  for three reasons:

  • 1. Fear
  • 2. Bad advice
  • 3. The availability of other, more well-advertised, loan products

 

“I have had many clients elect not to complete the reverse mortgage process  because of fear,” Castle says. “Usually, the additional cash could have improved  their lives significantly.”

Seniors’ fear is not unfounded. They are often the targets of scams and  fraud. But, reverse mortgages have one important safe-guard built into them to  protect even those who are uncomfortable making financial decisions. In order to  obtain a government-insured reverse mortgage, a senior must have counseling by a  HUD counselor with the local housing authority or the Consumer Credit Counseling  Office. This unbiased person can help the senior determine whether a reverse  mortgage makes sense for his or her individual situation.

And, sometimes well-meaning family and friends give bad advice.

“I have had ministers tell clients that they heard that you could lose your  home with a reverse mortgage,” Castle said. “It isn’t true, but advice isn’t  always based on facts.”

The availability of home equity loans also clouds the picture for many  seniors. “Home equity loans can be appropriate for people who have an income,  but they often spell disaster for seniors,” Castle said. “I talk to potential  clients every week who tell me that they are having problems keeping up with  their payments.”

“My experience has been that most home equity clients who are over 65 and  have taken the maximum 80% of their home value will eventually lose their  house—if they live at least 3-5 years beyond the date of loan origination,”  Castle added.

With a reverse mortgage, the homeowner can access from 40-60% of the  appraised value of their home, but the loan is not repaid until they die or  leave the home permanently. Then the home is sold and the proceeds are used to  repay the loan, with any remainder going to the owner’s estate.

To find out more about the benefits and requirements for a reverse mortgage,  visit [http://www.SouthTexasReverseMortgage.com] and request the free Federal  Trade Commission publication, Facts for Seniors about Reverse Mortgages.  Or call Castle at 210-789-3685.

“Misinformation has prevented many seniors from getting a reverse mortgage  when it would have provided them with greater financial stability—and peace of  mind. That’s why I like to have the family involved and why I often spend  several hours at my clients’ home explaining and re-explaining how a reverse  mortgage works and how the various pay-out options can make their lives better,”  Castle said.

Craig Castle is a Reverse Mortgage Specialist with Financial Freedom in San  Antonio and the South Texas area. He holds a BA in Economics from the University  of Missouri, is a former Licensed Stock Broker, and has worked with reverse  mortgages for the past four years. He is also chairman of the Not Forgotten  Coalition, a not-for-profit organization that provides services and advocacy for  senior citizens in San Antonio. For more information, visit   [http://www.SouthTexasReverseMortgage.com] or phone 210-789-3685.

Article Source: http://EzineArticles.com/?expert=Craig_Castle

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