Are you retirement age and watching your income in the stock market dwindle to nearly nothing?  Reverse Mortgages are an option to be considered if you currently own a Salt Lake City home and are of retirement age.  If you are in good health and planning to stay in your Salt Lake City home for a number of years to come, a reverse mortgage may be an excellent way to add some cash to your retirement especially in light of the recent stock market issues where your stock may not be worth as much now as it may be down the road.

Recently, Congress approved the 2008 Hope for Homeowners bill, making some changes in loan limits that might make reverse mortgages more attractive to seniors.

A reverse mortgage is a loan taken against your home equity that doesn't have to be paid back if you live in the house.  You must be age 62 or older to be considered for the loan, which gives you cash for the equity in your home.  In 2007, more than 100,000 reverse mortgage loans were made to seniors who wanted to add a little gold to their golden years.            

The new housing law, passed in July 2008 with a starting date of October, allows for a new, higher national loan limit of $417,000 on mortgages, but in some high cost areas that limit could be as high as $625,000.  This higher limit might make a reverse mortgage more attractive to seniors with more expensive properties.

The reverse mortgage is not just instant cash, but is also instant money -- with strings attached.  Homeowners pay a variety of fees before getting the mortgage (which can pay them in installments, lump sums or credit lines) and these fees can be pricey.  The new housing bill reduces the maximum fee to 2 percent on the initial $200,000 of the home's value and 1 percent on the balance thereafter with a cap of $6,000. You may be able to find a lower fee if you shop around before deciding on a lender.  Other fees include closing costs, service fees, mortgage insurance premiums, and interest rates, again shopping around can be to your benefit.

To qualify for a reverse mortgage it is best to discuss the loan with a nonprofit or public agency approved counselor. In Salt Lake City there are four good options.

1. The CDC  - Community Development Corporation of Utah - 801-994-7222

2.  HOPE - Housing and Opportunity Through Positive Empowerment - 801-757-0406

3. Neighborworks Salt Lake  - 801-539-1590

4. Salt Lake Community Action Program - 801-359-2444

Remember, about 63 percent of reverse mortgage shoppers decide against the loan for some good reasons.  For one thing, you must be healthy enough to stay in the home.  If you leave it for 12 months to go to a nursing home, for example, the loan becomes due.  You must also be able to keep the property in good condition, if you can't do so physically or financially, the loan will also become due. 

Go to the Salt Lake City, Utah Real Estate Resource Center for more information.