Reverse mortgages poised to pick up slack
By admin | April 26, 2007
With the rising number of foreclosures and fewer home purchases the mortgage market seems poised to jump on a new way to profit, in steps the reverse mortgage. More and more older individuals are finding it hard to make ends meet with social security alone so they are finding new ways to add to their income.
As of late, the majority of reverse mortgages have been insured through the FHA. Fannie Mae has also provided services in the secondary market through its Home Equity Conversion Mortgage.
Lenders of reverse mortgages have reported a 77 percent increase in reverse mortgage origination for the year 2006 over the year 2005. Reverse mortgages come with their share of limitations and restrictions; you are required to be 62 and will receive a monthly payment from the equity of your house. There is no repayment of this mortgage until you move out, sell, or die.
With baby boomers approaching the age of 62, the reverse mortgage could be about to explode for lenders. Many mortgage marketers are eyeing this demographic with great intensity. The industry is expecting an annual growth of 50%.
Of course there is also discourse amongst the ranks. Many think it is taking advantage of seniors and there are terms and conditions in the loan that can take up to 6 months for approval to allow for the individual to fully understand the terms.
Even still, the private sector is expecting a huge growth in this niche.
Topics: Uncategorized | No Comments »
