More people than ever before in the history of United States are reaching senior citizen age.
Many seniors are relying on incomes that are fixed, whether it is an annuity, a pension, Social Security, or a combination of these fixed income sources.
There are an increasing number of seniors who are looking into reverse mortgage solutions.
In this article we will look at some of those solutions.
If you have been looking at reverse mortgages, you probably have discovered that the most widely discussed possibility is an HECM (Home Equity Conversion Mortgage).
This type of loan is endorsed and backed by the FHA.
It is available to those who are age 62 and older, either alone or have a large amount of equity in their home, and go through the counseling process at HECM.
Before selecting HECM loan, you should familiarize yourself with all of the other options, because one of them may better suit your needs.
The first option you might want to consider is a Deferred Payment Loan.
This type of loan is specifically meant for seniors who need to make major home repairs.
The purpose of this loan is so that seniors do not have to dip into their savings.
The types of repairs include things like roofing, major electrical repairs, flooring, and stairs.
It is an extremely low-cost loan, and perhaps the most attractive part is that it does not have to be repaid until the sale of the home.
These loans are not available in every state, so if you are interested in a DPL, you will need to check with your local or State Housing Authority.
There is another type of deferred payment loan for seniors that can help keep you from dipping into your savings.
It is called a property tax deferral.
When you apply for this kind of loan is for only one purpose, and that is to pay your property taxes.
Once again, this kind of loan is only available in certain states, so you need to check with your Housing Authority find out if it is available in your area.
In order to qualify for a PTD, you will again have to check with your local Housing Authority because the rules for this type of law are not universal.
The good thing about this type of loan is that it does not have to be repaid until you sell your home.
The bad thing about it is that it can only be used for one purpose, that being property taxes.
Interest rates are typically very low, and rather than being compound interest, they are calculated on a simple interest basis.
The final type of loan to be considered in this article is a Proprietary Reverse Mortgage.
This is very similar to the first product mentioned, the HECM, except that it has some different parameters and it is not backed by the Federal Housing Authority.
The good thing about this type of loan compared to HECM's is that you can borrow on a home at a much higher value.
In other words, the loan will be base on the value of the home but there is no upper limit.
While this does sound more attractive, it may be a more expensive proposition for the homeowner.
This is not an exhaustive list of opportunities for senior homeowners, and before deciding on any method for helping your fixed income, make sure you do as much research as possible.