Reverse mortgages to grow by 30 to 40 percent next year

If you are aged at least 62 and are a homeowner, then you are sitting on a goldmine when it comes to the amount of money that you have in your home. Just ask retiree, Maurice Shapiro, he is now about to take a relaxing cruise to Alaska this summer, but this would not have been possible if he did not take out a reverse mortgage. He said “I’ll be 81 in two weeks and life doesn’t go on forever,” he said. “I got a reverse mortgage and can do things I was never able to, like travel and set up college trusts for my grandnieces and grandnephews.”

Shapiro got a reverse mortgage from World Alliance Financial, the fees on these mortgages are now up that are up to 6%. These loans are perfect for people like Maurice, who wants to enjoy life and are able to release some capital from their home to do so. Once the borrowers die, the lenders are then repaid once the house is sold. It seems that with the current credit crisis going on, many older people are looking to get a reverse mortgage so they can do the things that they wish to do.

If you have enough equity in your home, then you are able to borrow as much as $362,790 however; Congress is looking to raise this to $550,000. David Peskin, the World Alliance Chief Executive, has said that he expects the reverse mortgage market to increase by 30 to 40 percent by next year if the credit crisis subsides. He said “We’re trying to change the perception of these mortgages as loans of last resort to products that make financial sense for certain senior homeowners.” the National Association of Personal Financial Advisors chairman Tom Orecchio, added Homeowners who have enough cash flow should stay away because there are better alternatives for tapping the asset of their homes, like a home equity line of credit.”

We do have to warn older people with homes, not to try and take out too much from their nest eggs. The problem is people are now living longer, and they will want to use more of their equity to enjoy before it is too late, so be very careful.

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