Riverside Reverse Mortgage
It may surprise some people, but a Riverside reverse mortgage is growing in popularity. The most recent census revealed some data that shows why this may be the case. Riverside County’s senior population increased by 32 percent from 2000 to 2010, the fifth biggest jump in the state, and the 85 and over category grew by 52 percent. Some cities within Riverside County saw especially large growth in the senior population. La Quinta’s 65 and over population, for example, grew a whopping 146 percent in the last decade.
What’s happening in Riverside County is just an example of larger scale changes. In California as a whole, the senior population is expected to grow at twice the rate of the general population. California already has the largest senior population of any state in the union, and is an example of how the West is leading this historic demographic shift.
It really shouldn’t be a surprise, then, that programs that cater specifically to seniors, like the reverse mortgage, are growing. The reverse mortgage (or Home Equity Conversion Mortgage – HECM) was signed into law in February 1988 by Ronald Reagan as a means for those age 62 and over to access equity in their homes without having to make payments on that loan. Whereas a regular forward loan has monthly payments and the principal balance decreases over time, the reverse mortgage has no monthly payments and the principal balance increases over time. It really is the “reverse” of the standard mortgage.
But the reverse mortgage is not growing in popularity just because there’s a larger number of senior citizens. It’s growing because it’s meeting a critical need. Senior citizens have always been vulnerable to economic struggles because they often are pitting a fixed income against costs that increase over time. Plus there may be new costs for medical care or prescriptions that may not have even been in the picture before.
In a time of economic uncertainty, this vulnerability of senior citizens gets magnified. It becomes more important to a larger number of seniors to safeguard or improve their standard of living. For those who are relatively well-off, a HECM Saver line of credit can be a great estate planning tool. It can serve as an emergency source of income that can be accessed without disturbing well-established investment accounts, and unlike a regular line of credit, no payments are required on withdrawals. For those who need help making ends meet, the reverse mortgage can pay off the current mortgage and completely eliminate a heavy mortgage payment, or if there is no current mortgage, the reverse mortgage can put a significant sum of cash into the senior’s pocket with no monthly payments required.