Local Focus: Brooklyn, New York Reverse Mortgage

Posted by charles dennis

June 6, 2008

Brooklyn Reverse Mortgage

According to recent studies conducted in the Brooklyn area, an ever growing population of people is looking into reverse mortgage. Reverse mortgage, as we know, is a very unique type of home equity loan where lending companies actually pay the home owners a certain amount for subsistence, with the specified home acting as collateral – paying for “home equity” as it is called. The norm for reverse mortgage is: the more advanced in age the loan applicant is, the higher the amount for subsistence. However, it should be noted thought that subsistence is also dependent on the lending companies’ current rates.

According to these said studies, even home owner who are not yet of retirement age are already looking into various options that may become viable for them in the future; even checking and maintaining updates on interest trends when it comes to mortgages. This really means that home owners are already talking to lending companies about what packages they may subscribe to within the next few years.

This unique phenomenon is attributed to the fact that despite the seemingly worsening real estate problem in the country, there are still a lot of people in New York – particularly in the Brooklyn area – who are buying homes and maintaining these domiciles for very long periods of time. As of May 7, 2008, it was reported in MBA or Mortgage Bankers’ Association Weekly that mortgage applications are seeing a continued rise. There may be certain days when foreclosure stats are high, but since the year is not even half over, real estate market analysts are still holding conservative predictions (but positive) predictions as to the all types of mortgages trends, including reverse mortgages.

Why Reverse Mortgage?

Admittedly, reverse mortgage is not for everyone; but for home owners looking into their twilight years with no other viable source of monthly income, this kind of monetary resource certainly carries a lot of advantages. Applicants for reverse mortgage must at least have these two things: a home to serve as collateral and must at least be 62 years of age. Beyond that, everything is almost smooth sailing.

As stated before, the more advanced the home owners’ ages are, the higher the amount of loan that the lending companies can offer. Also, once the application has been approved, the homeowner can choose as to the mode of payment. Most people opt for multiple payments, very similar to monthly payments - but people can choose more or less frequent payments. Occasionally, a homeowner can opt for a payment of one large sum; which incidentally may be great if there is a large expense to be filled. (There has been incidence of home owners buying that yacht or finally going on that dream vacation cruise.)

Unlike most mortgages, payment for this kind of lending scheme is deferred until: the homeowner passes on; or moves permanently away from the house (into special care); or the house is sold as payment. In other words, the home owners are not entailed by the lending companies for any form of repayment.