Tribune: Saver Presents New Reverse Mortgage Options

A Chicago Tribune Q&A, “New Reverse Mortgage Opens Option for Seniors,” addresses reverse mortgages as a retirement option, and cites the Saver as a new choice for seniors considering a reverse mortgage.

The question poses the financial problem of many seniors who are “brick rich and cash poor,” and cites a case of an elderly widow with a $400,000 home she owned free and clear, but whose income was so low, she could not afford $2 Meals on Wheels payments.

“If reverse mortgages had been in existence then, it would certainly not have been a last resort. ‘Godsend’ would be more like it,” the question states. “She could have lived like a queen (albeit a modest one) for the rest of her life tax-free.”

Advertisement

While the author of the answer still says reverse mortgages are a “last resort,” he further says that new laws and the new FHA product are slowly changing his mind.

“Last year Congress increased the loan limits on reverse mortgages to $625,000,” he writes. “Additionally, the FHA announced a new version of the old reverse mortgage, the HECM (home equity conversion mortgage) Saver program. Although this new product does not allow homeowners to take as much money under the program as with the older version, the upfront closing costs are considerably lower. If you are 62 or older and have a house that is free and clear, or only has a small mortgage, you may be a candidate for this program.”

Read the Chicago Tribune article.

Written by Elizabeth Ecker

Join the Conversation (2)

see all

This is a professional community. Please use discretion when posting a comment.

  • The article seems to be divided into a question by one person with an answer by another. The answer starts at the sixth paragraph from the end of the article. The “question” seems to be about 10 paragraphs long starting at the beginning of the article.

    It is odd how few writers and financial reporters recognize the higher note interest rates on almost all Savers. They only discuss lower upfront fees versus lower principal limit factors. Why? Is it that we do not make that issue as significant as the other differences? If we are not, how is that fulfilling our responsibilities to borrowers, especially those of us who have fiduciary (or near fiduciary) responsibilities here in California, Minnesota, and perhaps other states as well by now?

    The person providing the question makes a very valid point when that person says: “Lump-sum payments, I agree, may create real problems and should be a last resort.” It is that particular payout which should be considered the choice of last resort, not the HECM itself.

  • The article seems to be divided into a question by one person with an answer by another. The answer starts at the sixth paragraph from the end of the article. The “question” seems to be about 10 paragraphs long starting at the beginning of the article.

    It is odd how few writers and financial reporters recognize the higher note interest rates on almost all Savers. They only discuss lower upfront fees versus lower principal limit factors. Why? Is it that we do not make that issue as significant as the other differences? If we are not, how is that fulfilling our responsibilities to borrowers, especially those of us who have fiduciary (or near fiduciary) responsibilities here in California, Minnesota, and perhaps other states as well by now?

    The person providing the question makes a very valid point when that person says: “Lump-sum payments, I agree, may create real problems and should be a last resort.” It is that particular payout which should be considered the choice of last resort, not the HECM itself.

string(96) "https://reversemortgagedaily.com/2011/04/25/tribune-saver-presents-new-reverse-mortgage-options/"

Share your opinion