2007-03-14 23:02:52 -
CLEVELAND, March 14 /PRNewswire/ -- As national attention becomes increasingly focused on the crisis in the housing market, a financial coach and registered investment advisor believes reverse mortgages may be the answer for some cash-strapped senior citizens trapped in high interest mortgages.
"Many seniors are fearful of reverse mortgages because they simply don't understand them and how they can benefit from them," said Kevin Kroskey, owner of True Wealth Design, Inc. of Greater Cleveland. His firm specializes in providing sound advice on home-equity management. Kroskey said too many
seniors have high-interest mortgage loans when they could be reaping some of the benefits of government guaranteed reverse mortgages. Kroskey recalled a recent situation involving an elderly couple who lost their home. "During the bankruptcy proceedings, the couple could have kept their home if they utilized the option of a government guaranteed reverse mortgage," Kroskey said.
While reverse mortgages are beneficial for seniors with rising mortgage payments, they can also benefit seniors who have no mortgage payments. The benefits include guaranteed income growth, ready access to money, and a hedge against inflation, Kroskey said.
He provided this example: A senior couple with a home valued at $150,000, of which the mortgage has been paid, could obtain a reverse mortgage credit line of $69,580. Assuming the line is simply established and no withdrawals are taken, this credit line is guaranteed to grow at a rate currently above 7% (7.28% as of 3/7/07) and changes monthly. In 20 years, if no withdrawals are taken and assuming the same initial growth rate each year, the credit line will be worth $283,825. Meanwhile, if their $150,000 home appreciates at an average rate of 3%, in 20 years their home would be worth $270,917 or almost $13,000 less than the credit line's worth!
In the same example, Kroskey said if the couple does not get a reverse mortgage, they may end up depleting their savings and investments, if emergency circumstances require the need for quick cash to pay for things like home health care, assisted living or nursing home care.
A reverse mortgage may not be everyone. Kroskey, however, urges all seniors 62 and older to learn more by visiting AARP's website- http://www.aarp.org/money/revmort.
FOR MORE INFORMATION CONTACT:
Kevin Kroskey, MBA at 216-373-7670
Source: True Wealth Design, Inc.
