Few financial products generate as much debate and confusion as reverse mortgages. It is not a resolution for immediate financial difficulties. But for seniors who want to stay in their home for the long term, it may be a decision worth considering. Like any major financial decision, people have to do their homework before determining if it is the right tool.
Pierce County Aging & Disability Resources will host an information-only presentation about the pros and cons of reverse mortgages. Participants will learn about the basics of the program, pitfalls and advantages, steps and time needed for application, how the long-term costs and benefits are realized, and why some consumers end up in default. “Reverse Mortgages: The Upside and The Downside” will be held twice this month:
• Jan. 12 – 12 to 1 p.m. at the Pierce County Annex, 2401 S. 35th St. in Tacoma
• Jan. 13 – 10 to 11 a.m. at the Pierce County Sound View Building, 3602 Pacific Ave. in Tacoma
“It’s often said that home is where the heart is,” said Aaron Van Valkenburg, Pierce County Aging & Disability Resources manager. “Staying at home may be difficult without effective financial supports. A reverse mortgage can be a wise choice or a terrible alternative. It requires homeowners to do their homework, evaluate alternatives and follow through on obligations.”
With a Home Equity Conversion Mortgage (HECM), you pay an FHA-approved lender an upfront fee and then have access to a percentage of your home equity. The loan is repaid when you move, sell the home, die, or fail to pay property taxes or homeowners insurance to maintain the property. The maximum size of a reverse mortgage depends on your age, home value, interest rate, and upfront costs.
In the last year, a number of significant changes have been instituted. With the goal of strengthening the program and reducing foreclosures, new limits on borrowing have been set, upfront mortgage insurance premiums are changing and annual mortgage insurance premiums are dropping.
“Reverse Mortgages: The Upside and The Downside” presentations are free and open to the public. No RSVP is required. In case of bad weather, on the day of each presentation call 253-798-8787 for possible weather postponement. For more information about the presentation, call 253-798-4600.