Reverse mortgages have become increasingly popular in recent years, as cash-strapped seniors seek ways to keep pace with rising expenses -- not to mention cope with the pummeling their retirement savings took during the Great Recession.
Now that the housing market is starting to come back to life -- that's "starting," as in it's got a long way back to healthy conditions -- the Federal Housing Administration is doing exactly what it should be doing: getting back to pre-crisis levels of lending standards and market share.
Since the housing market collapsed more than five years ago, would-be homebuyers with low or moderate incomes, or with less-than-stellar credit scores have had really just one financing option: a mortgage backed by the FHA.
For qualifying seniors, now really is a great time to consider a government-insured reverse mortgage, and here's why: Seniors can get more money out of their homes now then they will when interest rates, now at historic lows, begin to rise again.
People of color disproportionately received federally insured loans -- backed by the Federal Housing Administration (FHA) or Department of Veterans Affairs (VA) -- to finance the purchase of their homes and to refinance existing mortgages.
In less than a week, the home buying power of millions of Americans will be crippled by an average of $68,000. Some markets will experience declines as high as $250,000. That is, unless Congress intervenes before Oct. 1.
Reverse mortgages are touted as a great tool for seniors to tap their home equity to pay off bills while remaining in their homes with no monthly mortgage payments. Although that may be true for some people, these complicated and costly loans aren't right for everyone.