By WILLIAM WRIGHT Banner Staff Writer
Published September 19, 2007 10:20 AM EDT
A relatively new concept to provide financial security to senior citizens without selling their homes was introduced Tuesday to the Rotary Club of Cleveland.
Reverse mortgages was presented as an easy access to the equity in one’s home without monthly mortgage payments or the worry of ever having to move out, according to Kim Casteel, president of Cleveland’s USA Mortgage.
“This is a wonderful program for seniors 62 years of age and older,” said Casteel. “The borrower retains title of the home and they can’t be forced to sell. How they use the proceeds is up to them because it’s their money.
“As long as the taxes and home insurance are paid on the property the loan is due whenever the borrower sells the property, permanently leaves the home or passes away. It gives them financial freedom, independence and opportunity to live a better lifestyle.”
Barbara Wooden, vice president of USA Mortgage, said the public needs to be aware of a program with so many benefits, developed by the government, to help seniors get more out of life.
“You never owe more than the balance of what you can sell your house for. Even if you have pulled out more money than what the house is worth, you don’t have to pay it back. It’s forgiven. It’s just that at the sale of the house you sell it for its value,” said Wooden.
“If it’s worth $57,000 then you sell it for $57,000. If it’s worth $57,000 but the house sells for $65,000, then the heirs get the difference between the $57,000 and $65,000. I only wish more seniors knew about this. Most of them probably wouldn’t go another route if they knew this program existed.”
With the number one concern of most senior citizens being running out of money, the ability to remain in one’s home while having financial freedom is expected to appeal to many seniors, according to Casteel, a mortgage specialist for 20 years with Cleveland’s first mortgage company.
“It will drastically improves lives. The purpose is to enable older homeowners to stay in their homes and use some of the built-up equity as an income. They can pay off doctor bills, credit card bills, buy a new car, help loved ones — whatever they like and stay at home without worrying about ever having to leave. We think that’s wonderful.”