Declining Home Values - What Effect Will It Have On Reverse Mortgages?
HULIQ, March 28th, 2008
Falling home prices are putting pressure on homeowners across the
country. What do the declining home values mean to your Revere
Mortgage or your chances of getting one.
Many homeowners have seen their equity drop in the last year and
it's likely that this trend will continue in the near future. The
question you may be asking yourself, and the question we are being
asked quite often lately, is what effect the decline in the housing
market will have on Reverse Mortgages.
This question really actually breaks down into two seperate questions
and they are both very important to those concerned. The first question
here is what effect the declining home values will have on those trying
to get a reverse mortgage, and the second question is what the effect
will be on those who already have a reverse mortgage. Lets look at both
these questions to see what this housing debacle might mean to you.
First things first, for those who already has a Reverse Mortgage,
you have nothing to worry about. Many homeowners have been contacting
us asking about what will happen if their home values drop to much and
the reverse mortgage they have becomes more than the homes value. One
of the best parts of a reverse mortgage is that once you take one out
the terms of the loan cannot change. If you have a line of credit or
are receiving monthly payments you will continue to receive them
according to the terms of your loan. If the value of your home drops
below the amount due on your loan the lender cannot come ask for more
money or file any deficiency judgement in the event they lose money.
Reverse Mortgages have been designed to provide you security for these very circumstances.
For those who are contemplating taking out a Reverse Mortgage the
declining home values could pose some problems. If you in an area that
has been hit pretty hard by the real estate downturn then there is a
chance the amount of equity in your home will no longer qualify you for
a reverse mortgage. With this being said, some of the hardest hit areas
are places where the average home value is more than the maximum HUD
limits anwyays so it might not actually change anything for you. If you
are concerned about what your county limits are or if the downturn in
the market has changed if you qualify for a Reverse Mortgage you can
always get a free loan analysis.
Read more of this articleAbout Reverse Mortgages: Learn all about reverse mortgages at NewRetirement.com