Housing And Urban Development 's Home Equity Conversion Mortgage ( Hecm ) Program

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In 2008, 78 million baby boomers will turn age 62 and qualify for a reverse mortgage. These seniors have 4 trillion dollars in home equity available to them in an illiquid asset, their house. In fact, these retirees have 50% of their net worth tied up in their homes. Estimates indicate that there is a target population of some 15 million senior households that both qualify for and are good potential candidates for the Department of Housing and Urban Development 's home equity conversion mortgage (HECM)program. The HECM is when a lender advances, a senior age 62 or older and a current homeowner, money based on the houses equity. The senior homeowner can take the cash as a monthly payment all at once in a single lump sum of cash, as a …show more content…

Needless to say if you can be aware of the many factors that play into this decision making it may be easier for you to objectively look at a reverse mortgage and make a better decision of it 's effectiveness for you.

The fear of losing the equity in your house. Seniors grew up with the American dream of owning a house. They spent their lives focused on making their home free and clear of any liens. Paying off the mortgage was priority number one so it is counter-intuitive to add debt to it. By taking out a reverse mortgage you would be doing a 360 degree turn and actually be growing a mortgage versus paying it off. No matter how much sense a reverse mortgage may seem it will not make sense to a lot of seniors because of how they were financially raised.

Another fear seniors have is the complexity of taking out a Wisconsin reverse mortgage. With the program being so new and so few taken out there is not a whole lot of information available to seniors who are looking for more knowledge. For many people the unknown is the worst of all fears and will cause hesitation in making decisions. That is why HUD requires all seniors to participate in counseling sessions to ensure they understand reverse mortgages and the process of taking out that kind of mortgage. The funny thing about that is the well intended counseling will actually scare off some potential applicants.

A general fear of having flexibility in a seniors retirement years is a concern when

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