Survey Finds Homeowners Need Reverse Mortgage Loans to Pay For Everyday Expenses, Other Essential Needs

The survey was conducted in January by Consumer Credit Counseling Service of GreaterAtlanta, Inc., a credit counseling agency that provides reverse mortgage counseling. The homeowners average 74 years old and have lived in their homes an average of 18.5 years. The average purchase price of their homes was $95,554 and the respondents said that the current value of their homes was approximately $221,997.

When asked the question, "What prompted you to obtain a reverse mortgage loan?" the responses were:

    -- Budget too tight - 19%
    -- Need more liquid assets on hand - 16%
    -- Home repairs and maintenance - 15%
    -- Provide care for dependents, pay medical bills - 8%
    -- Pay property taxes and homeowner's insurance - 7.23%
    -- Falling behind on monthly payments - 6.25%

A person must be 62 years of age or older to be eligible for a reverse mortgage. A reverse mortgage is a loan that allows homeowners to convert the equity in their homes into tax-free income without having to sell the home, give up the title, or take on a new or additional monthly payment. Loans must be repaid when the homeowner no longer lives in the home.

"We expect the demand for reverse mortgages to grow significantly as baby boomers reach retirement and need funds to meet daily expenses," said Sue Hunt, manager of reverse mortgage counseling for CCCS. "It is important for homeowners to educate themselves about reverse mortgages. Credit counseling can help them understand how these loans work."

While 79.4 percent of the respondents are retired, 10.5 percent work part- time jobs, nearly 5 percent work full-time and another 5 percent said they were looking for a job.

Most reverse mortgage lenders require homeowners to obtain counseling prior to receiving the loan. To qualify for a reverse mortgage, a person should have a significant amount of equity in their home and the home must be in reasonably good condition.

Although income and credit history are not considered in securing a reverse mortgage, CCCS believes it is critical for homeowners to review their entire financial situation during counseling. Reverse mortgage clients need to develop effective budgeting skills to meet periodic expenses, such as property taxes and homeowners insurance.

About CCCS of Greater Atlanta:

CCCS of GreaterAtlanta serves clients in all 50 states and has 18 offices in four states. It is the headquarters for the CredAbility Network, a family of agencies serving consumers in northGeorgia, south Florida, middle Mississippi and east Tennessee as well as nationally via telephone and Internet.

CCCS is accredited by the Council on Accreditation and is a member of the Better Business Bureau and the National Foundation for Credit Counseling (NFCC). Governed by a community-based board of directors, CCCS is funded by creditors, clients, contributors and grants from foundations, businesses and government agencies. Service is available at offices throughout metro-Atlanta and northGeorgia in English, Spanish and American Sign Language. CCCS offers around the-clock help by phone at 1-800-251-CCCS or at its Web sites, www.cccsinc.org and cccsenespanol.org.

SOURCE Consumer Credit Counseling Service of GreaterAtlanta, Inc.

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Copyright © 2008, NewsBlaze, Daily News

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