Reverse mortgages: Know your options

It's interesting how the economic condition of the 60-plus population has changed since we opened the Serving Our Seniors office in
Sandusky Register Staff
May 24, 2010


It's interesting how the economic condition of the 60-plus population has changed since we opened the Serving Our Seniors office in December 1996. Back then, the majority of seniors who called our agency for help owed nothing on their home. Today, we have seen a 180-degree turn. Most older adults who call our office still have a house payment, and many have taken out a home equity loan that has made their financial situation worse , not better.

There is a loan that is available to people age 62 and older that doesn't require the borrower to pay it back as long as they are alive and living in that home, a reverse mortgage. Although Serving Our Seniors does not endorse reverse mortgage products or lenders, it does realize that more of the 60+ population believe it is necessary for them to borrow in later life. If that is the case, then older adults need to know what a reverse mortgage is so they can consider it as one of their borrowing options.

There are different types of reverse mortgages. I am going to discuss the Home Equity Conversion Mortgage that is backed by the federal government. With a reverse mortgage, the financial institution/broker does not look at the older adult's income, nor is it going to arrange for the older person to make monthly payments on the money borrowed. Why? Because the money is paid back when the older adult dies, sells the home or permanently moves out of the home.

Don't think that this is free money, because it's not. Variable Interest rates are being charged for the money borrowed. The difference is that you aren't getting the bill. And you won't get the bill until one of three things happen: you die; you sell your house; or you permanently move out of the home. Only then will it be time to pay the piper.

I hope I have just whetted your appetite to become better informed about reverse mortgages, because Serving Our Seniors is hosting "Understanding Reverse Mortgages" from 2-4 p.m. May 31 at the Erie County Office Building (3rd floor), 247 Columbus Ave., Sandusky. This is not a sales pitch presentation. It is a factual presentation to help older adults understand what a reverse mortgage is and how it works. The presenter will be Jim Nabors of Citizens Banking Company. Adding to his presentation is a side panel of experts who will interject clarifying comments to ensure the presentation is objective and easy to understand. The side panel of speakers is: Brad Payne, senior housing specialist with the U.S. Department of Housing & Urban Development; Tom Bowlus, counselor with Consumer Credit Counseling; and Alex Bilchak with the Ohio Department of Commerce, Division for Financial Institutions.

This presentation is free and open to the public. An RSVP is appreciated for planning purposes, but it is not required in order to attend. Call Serving Our Seniors at 419-624-1856 or 800-564-1856 for reservations.


Q: At your last forum on "Understanding Long Term Care Insurance" you said there would be a presentation to help people figure out how to estimate if they can afford to buy and keep paying on long term care insurance? Do you have a date for that?

A: Yes. It will be 2 p.m. tomorrow, May 10 at the Erie County Office Building (3rd Floor), 247 Columbus Ave., Sandusky. The presenter is Kendra Thompson, program trainer with the Ohio Senior Health Insurance Information Program, within the Ohio Department of Insurance. She does not sell insurance. She works for the state agency that regulates the sale of insurance. An RSVP is appreciated, but not necessary. For information or reservations, call 419-624-1856 or 800-564-1856.

Q: Are the Masters Challenge registration forms available yet?

A: Yes. The Masters Challenge will be July 20-28. We have three new events that are "no experience necessary" -- Introduction to Sailing (courtesy of the Sandusky Sailing Club); Introduction to Kayaking (courtesy of Lorain County Metro Parks/Splash Zone); and Beachball Volleyball at Nickelplate Beach (compliments of Huron Parks & Recreation). We also added two new events "Experience Required" -- Chess and Texas Hold'em poker. It's free to participate so have a friend register, too. Call our office and we will send you a registration form.

Q: I know how to type, but I don't know how to use a computer. If I volunteer can I be given a task so I can learn how to use a computer?

A: Yes, we are looking for two volunteers who will donate two hours a day two days per week. Call me at 419-624-1856 or 800-564-1856 and I'll give you details.