Mortgages article: Reverse Mortgages-Wait Just a Minute!

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I don't know about you but I cannot watch the tube or listen to the radio (in the car) anymore without hearing an ad for a reverse mortgage company that will cure all the ills you have.

No wonder. Reverse mortgages are one of the fastest growing markets in lending in the country and….here's the good news most of their potential customers are not even eligible yet- BABY BOOMERS all 78 million of them will be eligible at age 62.

WHAT ARE REVERSE MORTGAGES? A reverse mortgage is a home equity loan or line of credit that is secured by the equity in your home. You do not repay as long as you live in the home. The reason it is called a reverse mortgage is because it is the opposite of a regular home equity loan where you reduce debt and build up equity. In a reverse mortgage you reduce equity and build up debt. That is where the money comes from.

WHO CAN USE REVERSE MORTGAGES? Basically anyone who is over age 62, owns and lives in their own home and has paid off at least 60% of the loan can apply for a reverse mortgage. There is no proof of income requirement.

One thing that is a marvel to me as a former economics minor, back in the day, is how the marketplace works. Five years ago no one even heard of a reverse mortgages. Two years ago folks greeted them with much skepticism. Last year they grew at a stunning 77% for the fiscal year ending 30 September, 2k6.

As our market economy is designed, when the need/demand for products grows so does the variety of offerings for that product. And the competition will make the pricing more competitive. Reverse mortgages are no different.

Several new products are slated to come out this year. More competition means lower rates and fees. So if you are in the market for a reverse mortgage WAIT JUST A MINUTE! Things are heating up in the reverse mortgage market and you, the consumer, are going to be the beneficiary. And with literally millions of Americans fast approaching the magic age of 62 the marketplace will continue to respond favorably.

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