Dallas Home Appraisals News and Information

The reverse mortgage used to be thought of in the same way as predatory loans and other high-risk amortization loans.  However, with new guidelines to protect seniors and better information to help consumers understand the them, these loans have become very popular for seniors and, for some, an absolute lifeline.

With reverse mortgages, lenders are generally less interested in your credit history than in the balance remaining on your mortgage and the market value of the home.  Under the new economic stimulus package, the limits on reverse mortgages have been raised from $417,000 to $625,500, so seniors with more valuable homes can draw down more cash. New federal reverse mortgage guidelines also cap fees and provide credit counseling.

With a reverse mortgage, the lender makes payments to the (senior) homeowner, based on the property's equity when the reverse mortgage is put into place. Homeowners usually stay in their residences and use the income stream to pay bills. But under newer reverse mortgage guidelines, it's also possible for homeowners to use a reverse mortgage to buy another primary residence. This makes it possible to buy a new home without making two monthly payments or having to try to sell your current home in today's depressed market, especially attractive for seniors looking to downsize.

There are four ways in which payments can be made:  a lump sum; a monthly cash advance; a line of credit to be taken out at any time; or through a combination of these methods. Even if the value of the home declines, the total debt will never exceed the property's value. The reverse mortgage company absorbs any losses, not the homeowner or the homeowner's heirs.

If you're interested in finding out more about reverse mortgages, you can get more information from AARP, HUD, and the Federal Trade Commission.  You can also contact us, at Blue Star Appraisals Inc., for a referral to a lender or broker who can help guide you through the process of applying for a reverse mortgage.