Reverse Mortgage

An article submitted by Lance Williams. (See below) The article is solely the opinion of the writer.

Mortgage: for those twilight years

2004 witnessed a growing number of applications for reverse mortgage. Compared to 2003 which witnessed a rise of 112% in applicants, 2004 had only 109%, yet Home Equity Conversion Mortgage (HECM) grabbed the lion’s share with 90% of the pie. This is attributed to the growing awareness especially from the government initiative to educate the senior citizens about the benefits of reverse mortgage. In its early years, Americans were apprehensive about this backward process. They felt that this income getting mortgage has something fishy associated. Some lenders too helped spread rumors because the products did not involve much security to them, especially with the FHA insured HECM.

The concern for seniors has taken the driver’s seat on the federal agenda. There have been large scale awareness campaigns, including seminars and workshops .This year the much talked about high loan limits for Fannie Mae’s Home Keeper Loan has been raised from $333,700 to $359,650 with a 50% high for Alaska, Hawaii and US Virgin Islands. While HECM have increased its high loan limit to $312,896 from $290,319, subject to geographical area specifications. The lower limit has also been raised amidst much criticism to $172,632 .The purpose of roping in the lower equity home owners into this benefit stands defeated. The prime reason being, the risk involved.

The reverse mortgage is primarily for the retired citizens above 62. Who have no source of income and who more often than not spend the rest of their lives amidst mounting medical bills. This is one loan which does not check your credit and your salary stubs. You only need to own a house which has no lien attached and you can borrow against its current equity. The best part of the scheme is you don’t have to make those monthly payments, rather you get an income. This frees up money for all kinds of uses and is tax free.

Reverse mortgages will become more popular as more and more products are pouring in and the rates are making only gradual improvements. This has found a place on every American’s long term plans. Last year saw reverse mortgages occupying 3% of the mortgage market that is set to triple in 2005 according to the National Reverse Mortgage Lenders’ Association. Our last years will also be a no-compromise deal. Thanks to Reverse Mortgage.

What is the yardstick mortgage lenders use to qualify you for a credit? Have you ever been stuck in an awkward condition having a bad credit? Are your credit scores unmatched the loan lending criteria of mortgage lenders? Are you very eager to go to any extent to have compatible credit scores? This is an effort, to give you the solutions to all your queries regarding credit scores.

Credit scores are the important indicators, in the mortgage financing process. It is only on the basis of credit scores report the entire loan lending criteria depends. They give the mortgage lenders fast objective measurement of borrower’s credit risks. Lenders use credit scoring, for granting fast, consistent and biased credit. Credit scores have made big improvements in the credit process. Because of credit scores:
1. People can get loans faster.
2. More credit is available.
3. Credit decisions are fairer.
4. Credit rates are lower overall.

Credit scores are a true reflector of borrower’s credit risk level. It is a number generated through statistical models by using elements from borrower’s credit history reports . Typically, a higher number indicating lower credit risk and low number indicating a very high credit risk. There are many different types of credit scores in financial service industry. Although to determine risks many additional factors are used, such as an applicant’s income vs. the size of the loan, credit scores are leading indicator of one’s basic creditworthiness.

Credit scores play an important part in the loan approval process and in determining the interest rate that a lender offers. There are many factors that affect credit scores they are:
1. Payment history.
2. Public records.
3. Amount owed.
4. Length of credit history.
5. New accounts.
6. Inquiries.
7. Accounts in use.

Credit scores (usually) range from 340 to 820. As your score climbs, the interest rate you are offered will probably decline. Borrowers with a score over 700 are typically offered more financing options and better interest rates.

If you have any other queries related to mortgage, feel free to visit this site.

Lance Williams who wrote this article is working as a content developer for He specializes in mortgage and real estate concepts.