The Communications Factors

Mortgage broker Harry Gordon takes on the problem which is common to many seniors – kids are grown and have moved away, leaving their typically large homes virtually empty. There is a relatively new type of loan called a “REVERSE MORTGAGE” which can provide many seniors with the supplemental income they need and want during their golden years.

Most people know what a mortgage is, but few know about a reverse mortgage. Harry Gordon of Lake Tahoe Mortgage indeed knows the concept of the reverse mortgage. He is called the “ Reverse Mortgage Guru.”

The reverse mortgage is a relatively new type of loan against the value of a home, which provides payments to the owner over the course of his/her lifetime.

What is a “reverse mortgage?” With a regular mortgage, the would-be home-owner can incur debt with which to purchase a home, which would provide equity.

With a reverse mortgage, the home’s equity provides owners with income. The bank would actually pay the home-owner monthly. When there was income and little or no equity, a regular mortgage provides the home-which leads to equity.

Later in life, the equity of the home, with a reverse mortgage, can provide the income which will allow people to retire.

Most seniors have worked diligently over the years to pay off their mortgages, and the thought of another mortgage – or even a reverse mortgage – makes them cringe. Rather than making a mortgage payment, the home-owner would receive money for the home, so it is impossible to lose your home. Simply put, the home’s value is the only asset that can be tapped to pay the reverse mortgage debt balance. If a home’s value does drop below the amount owed on the reverse mortgage, the lender must absorb the loss and look to HUD for reimbursement.

Why shouldn’t you take out a home-equity loan or a second mortgage?

In a word, no. Suppose you own a $250,000 home outright with no mortgage debt. If you were to take out a $100,000, 15-year mortgage at eight percent, you would take on monthly payments of $956. Most government or high-grade corporate bonds yield between five and six percent, so even if the senior invested the $100,000 immediately, the return would be short of the monthly mortgage payment. Additionally, the return from stocks or bonds is considered by the IRS to be income and is, therefore, taxable. Though the reverse mortgage is “income,” it is non-taxable.

Anyone can receive a reverse mortgage, provided he/she meets a few stipulations. First the required age to get a reverse mortgage is 62. The home on which one gets the reverse mortgage must be the principal residence. Essentially, one must live in the home for at least six months of the year. Additionally, the home must be a single family, a 2- to 4-unit building, or a federally approved condo or planned unit development. The home must qualify to satisfy any existing liens. Any debt or liens must be paid off at the time of the reverse mortgage settlement.

Harry Gordon, a reverse mortgage guru, can provide seniors with supplemental income with the reverse mortgage. There is no possibility of losing one’s home as a result of obtaining a reverse mortgage. There is no need to repay any portion of the loan as long as one lives in the home.

Contact Information:

HARRY GORDON, CMPS
www.reversemortgagecoach.net

www.LakeTahoeMortgage.net
HarryG@LakeTahoeMortgage.net