Reverse Mortgages Explained at SeniorClarity.com

SeniorClarity is a free public service website sponsored by Seniors for Senior Homeowners, their families, friends, financial advisors and non-profit counselors. The goal of the website is to provide trustworthy reverse mortgage information so seniors can decide if they should consider a reverse mortgage. This website is not affiliated with or subsidized by any federal agency.

Reverse mortgages came about in 1989 by the U.S. Department of Housing and Urban Development (HUD) in an effort to give older Americans greater financial security. The Federal Housing Administration’s mortgage insurance guarantees to the borrowers that they will continue to receive their Home Equity Conversion Mortgages (HECM) loan proceeds even if the reverse mortgage lender goes bankrupt. The FHA insurance also guarantees lenders that they will get their money back with interest and fees even if the homeowners outlive the longevity projections or the property values decrease. Even though the FHA mortgage insurance increases the initial cost of getting a HECM reverse mortgage, it lets lenders sell home equity conversion mortgages at interest rates well below those of Fannie Mae and private lenders.

Reverse mortgage loans are becoming increasingly popular in America, although there are reverse mortgage pros and cons. Many people believe reverse mortgages are a practical solution to the impending financial burden of 78 million baby boomers reaching retirement age. With SeniorClarity, those baby boomers can decide for themselves if a reverse mortgage is right for them.

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