Colorado Reverse Mortgage INFO
Colorado Seniors Seek Refuge under the Reverse Mortgage Umbrella
In the last few years, plummeting stock prices and home values have left many seniors seeking relief for their financial losses in reverse mortgages in Colorado. Attempting to manage their debts with their much reduced pensions simply isn’t possible for a lot of people over the age of 62. Despite having planned and saved for retirement during their working years, the last few years’ stock losses and plummeting home values has removed home equity loans from the table. They are ready to retire, but cannot afford to do so, without sacrificing a large chunk of their lifestyle.
Banks are being much more frugal about the money they lend, and even the best credit score may not mean that a home loan is possible. Values are still very low and that means that many homes do not meet the 85%-90% criteria for loan balance to value in order to secure a loan.
The only real options for many Denver area senior is the reverse mortgage, which are now backed by the FHA due to private banks’ reluctance to offer programs. Home Equity Conversion Mortgages guarantee that the banks will see their money at the end of the loan life and can help Colorado senior homeowners find the leverage they need to obtain a reverse mortgage on their home.
How It Works
Consider a senior citizen, living in Colorado, who is over 62 years old. They’re pension is severely diminished due to falling stock prices and they are being forced to retire by their employer, due to economic conditions. Our Colorado senior owes $87,000 on their home, and the home value is estimated at $318,000. By opting for a reverse mortgage on their home, they are able to wipe out the $87,000 debt and keep the remainder of the money in the form of a loan or a line of credit. They no longer owe a monthly mortgage payment for their home. They are able to use that extra loan money for their financial needs.
What’s the Catch
Congress has recently increased the maximum home value that seniors can borrow against to $625,500 from $417,000. The new bill also keeps mortgage origination fees at 2% on the first $200,000 and 1% on any amount over that, with fees not to exceed $6,000. Insurance premiums and closing costs still apply. No real concern here.
However, in the case of death or sale of a home for a senior citizen that has opted for a reverse mortgage on his Colorado home, things can get sticky. With home prices still very low and decreasing in some areas, the possibility of the home being worth less than the loan amount at the time of the sale ir possible.
Who Should Consider a Reverse Mortgage
Talk to a loan officer at GoldenLenders about a reverse mortgage in Denver Colorado: if you are a senior, over the age of 62, have significant equity in your home and no real means of savings available.
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