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Investment Advisor Rep
Registered Principal
Business I finance
Financial/Itrietttlferitirielirement Planning
Money Managed Accounts — Tax Advantaged Investing
alVITAS
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/4 4144-, 114
Reverse Mortgages
FINRAT81150
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33045 Hamilton Court E., Ste 105 Ferrbingtbn Hills, MI 48334
7 \WO Square Lake Road 810Ortifitid Hills, MI 48302
Phone (248) 363-2548 • (800) 863-1778 • Fax: (248) 363-8989
mdelap@equitasusa.com
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A36
January 10 • 2008
Truths and explanations
aid senior homeowners.
I
s this for real? It
maintained in reasonable liv-
seems too good to
ing condition.
be true!
• The size of the reverse
One cannot pick up a
mortgage depends on the
newspaper without read-
applicant's age(s), the pro-
ing all the bad news in
gram selected, the home's
today's mortgage busi-
value, prevailing interest rates,
ness. And in these trying
program lending limits and
financial times, senior-
current interest rates.
David B Iatt
aged homeowners are
• There are no income or
Colum nist
often required to look to
credit qualifications.
their home's equity to address finan-
• Reverse mortgages convert home
cial needs and problems. But there is
equity into cash. As long as there is
very good news, especially for seniors.
sufficient equity in the property, hom-
A reverse mortgage is a unique loan eowners may be eligible for a reverse
that enables senior homeowners to
mortgage.
convert part of the equity they have
• Many seniors use a reverse mort-
accumulated in their homes over the
gage to pay off an existing mortgage in
years into income without having to
order to eliminate monthly mortgage
sell the home, give up title or take on
payments.
new monthly mortgage payments.
•When a reverse mortgage becomes
This special, safe, government-backed
due, the borrower can never owe more
program is available to assist seniors,
than the value of the home upon
their adult children, or their advisers.
repayment, regardless of the loan
Reverse mortgages are available to
balance. Most reverse mortgages are
individuals 62 or older who own their
insured by FHA, an arm of the U.S.
homes, even if there is an existing first Department of Housing and Urban
or second mortgage. Funds obtained
Development.
from the reverse mortgage are, in
• All seniors applying for a reverse
most instances, tax-free. Borrowers
mortgage have a safety net. As part of
can choose to receive reverse mort-
the application process, a third-party
gage funds as a lump sum, monthly
non-profit, HUD-approved financial
income, line of credit or a combina-
counselor is assigned to meet with the
tion. Borrowers can use the funds any
borrower to insure that clients fully
way they wish to improve their quality understand the program before pro-
of life.
ceeding.
By converting equity into income,
•A reverse mortgage will generally
a reverse mortgage is a way for
not affect regular Social Security pay-
seniors to stay in their home and
ments or Medicare benefits.
receive cash, to use generally for any
• The cash proceeds from a reverse
purpose, whether it is for day-to-day
mortgage are most often tax free,
living expenses, home remodeling,
because it is already the homeowner's
repair, paying off existing debt, in-
money.
home health care costs or traveling
As with any financial decision,
the world. Best of all, the homeowner
seniors are encouraged to talk with
retains title and remains living in the
their children, financial advisers and
home!
CPAs regarding their interest in a
So are reverse mortgages really too
reverse mortgage. ❑
good to be true? Let's explore some
important facts.
David Blatt is president of Blatt Financial
• With a reverse mortgage, the
in Bingham Farms and previous president
and principal of First Alliance Mortgage
borrower retains title to the home
throughout the life of the reverse
Company. He has an extensive background
in all aspects of residential and commer-
mortgage. The borrower cannot, as
cial mortgage lending. He can be reached
a result of the reverse mortgage, be
at (248) 433-9626 or
forced out of his or her home, as long
as property charges, such as taxes and
www.blattlending.com.
insurance, are paid and the home is