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Reverse mortgages are widely available, even as regular mortgages are tightening standards 2009-12-21 Reverse mortgage volume is rising, aging expert Paula Span said in The New York Times, even as regular mortgages become increasingly tough to get. The reason, Span reported, is that reverse mortgages are insured by the Federal Housing Administration. The FHA will repay lenders even if the value of a home falls below the loan balance, she explained. And for house-rich but cash-poor seniors, reverse mortgages are an easy way to increase liquidity. Seniors are using reverse mortgages to "pay off their first mortgages [or] pay down other kinds of debt," Span said. They "invest in their houses or in other assets," too. Barbara Hilliard, a reverse mortgage specialist at M&T Bank in Maryland, was quoted as saying that many people are using the loans to pay for home modifications. Add-ons like curbless showers and stair lifts are popular, she noted. The long-term consequences of a reverse mortgage should be considered, cautioned Barb Stucki, of the National Council on Aging. Regular loans may be cheaper for short-term uses, added Span. But, she went on to say, the mortgages can be a useful tool for older homeowners. She directed interested seniors to resources provided by the NCOA.  |
