Explore reverse mortgage programs for possible retirement income

November 20, 2012

In today’s environment of historically low interest rates, property owners who are at least 62 years old and have been in their homes for a number of years may consider using the equity that has accrued over that time to their advantage.

One way to do that in the 21st century is by utilizing a program that revolves around the idea of reverse mortgages. Still a largely unknown financial tool, reverse mortgages offer a powerful yet widely misunderstood way to use the equity from one's home in a worthwhile and beneficial way.

The benefits can be powerful, though reverse mortgages are obviously not right for everyone. Reverse mortgages, when applicable, are another tool in anyone’s long-term financial toolbox.

“With today’s record low interest rates, it could be the perfect time to look into something like a reverse mortgage, if you’re at a point in your life when using your home’s equity could benefit you,” says Trina Joyner, 2012 president of SCAOR. “It’s certainly not for everyone, but it does have its advantages. We would encourage anyone to learn more about reverse mortgages, and all other financial options tied to their homes, for possible use in their long-term planning.”

According to Rehoboth Beach-based loan consultant Joe Della Torre, who also serves as the chairman of SCAOR’s Affiliate Committee, utilizing this relatively new concept can have multiple advantages including access to extra funds; flexible qualifying guidelines; payment disbursement options like lump sum, monthly installments or line of credit;  and deferment of payments until the house is sold or the homeowner passes away.

There are also red flags to be aware of. The Consumer Financial Protection Bureau is working on new rules for improving the disclosure of reverse mortgages and the hidden risks, as well as implementing greater supervision of lenders who issue reverse mortgages.

It’s important to remember, for instance, that homeowners taking advantage of reverse mortgage programs are still responsible for paying property taxes, maintenance fees and any insurance payments on their homes.

“While reverse mortgages can prove very useful to many older homeowners, it’s important to note that these programs are not to be perceived as free money, which apparently some borrowers across the country have felt they are,” says Joyner. “As with anything else, knowledge is key. If interested, learn about the possible benefits and potential pitfalls of reverse mortgages through your lender or realtor of choice. This way, you and your family can make an informed decision.”

SCAOR is a resource for the public, as well as a recognized advocate for property rights and property owners in Sussex County. The association also monitors legislative issues on the local, state and national levels that may impact home ownership in the area.

To read more about issues related to Sussex County’s real estate industry, visit


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