AARP - Inside E Street - Discusses Reverse Mortgage

10/27/2009

posted by N. Sioris

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"AARP - Inside E Street," is a half hour talk show featured on Retirement Living TV, the only network dedicated to adults 50 and older. The weekly program delves into issues that impact health, financial security and retirement. Each week, "AARP - Inside E Street" host, Sheilah Kast, investigates important issues before congress and state legislatures and discusses hot political topics of the day that affect retirees and senior citizens.

This week's show topic is reverse mortgage. The segment includes interviews with Judy Biggert, Illinois Representative and Massachusetts Representative, Barney Frank both of whom say a reverse mortgage as a positive financial tool for many seniors, particularly in today's economic environment.

You can watch the entire show below.

Providing Financial Assistance to Aging Parents

8/03/2009

posted by N. Sioris

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Over the weekend The Wall Street Journal Report with Maria Bartiromo, aired an interview with Andy Cohen, CEO and co-founder of Caring.com. During the interview Mr. Cohen highlighted the challenges that many baby boomers are struggling with while providing care and financial aid to aging parents.

Currently, 45 percent of adult children in the U.S. are providing financial assistance to their aging parents. Mr. Cohen cautions that there are three major mistakes that people routinely make while helping their parents.

1. Not maximizing all the entitlement benefits that their parents are eligible for. Caring.com provides access to a "benefits check-up" which accesses 1600 sites to check for various benefits or entitlements, that your aging parents might be eligible for.

2. Not spending parent's assets before contributing their own, such as using life settlements, a reverse mortgage, or the parent's retirement savings. Cohen says for tax reasons this approach is advised, even though it's a tough conversation to have with aging parents, especially if the parent feels strongly about leaving an inheritance.

3. Not having all the legal documents in place in order to manage aging parents' health directives as well as make financial decisions for parents.

Reverse Mortgage Money Can be Distributed Several Ways

8/03/2009

posted by N. Sioris

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Reverse Mortgage borrowers are offered several choices of how to take the cash distributions from a HECM (Home Equity Conversion Mortgage) reverse mortgage loan. Each borrower is able to make this decision for themselves, unless the entire reverse mortgage home loan amount is required to payoff an existing "forward" mortgage balance on their home.

For this discussion, let's assume that most or all of the reverse mortgage loan proceeds will NOT be needed to payoff a current mortgage debt. In this case, the borrower has five options for how to receive the money from the reverse mortgage home loan.

• Tenure - Equal monthly payments as long as at least one borrower continues to live in the home as a primary residence.
  
• Term - Equal monthly payments for a fixed period of months that the borrower selects.
  
  
• Line of Credit - Unscheduled payments or installments, at times and in amount of the borrowers choosing, until the line of credit is depleted.
  
• Modified Term - Combination of the line of credit option plus monthly payments for a fixed period of months, selected by the borrower.
  
• Modified Tenure - Combination of a line of credit with monthly payments for as long as the borrower remains living in the home.

Understanding these options and then making a selection that will be the right choice, is sometimes confusing and a bit intimidating for some borrowers. However, one of the GREAT things about the government insured reverse mortgage is that at anytime during the course of the loan, a borrower can call the loan servicer and request a change to the way he/she receives the reverse mortgage home loan benefits.

The borrower is not locked in forever. So when "life happens" and circumstances change, this type of loan comes with the flexibility of easily making a change to the way equity is paid out.

Request a complimentary reverse mortgage loan quote today. It will be customized to suit your individual specifications.

How To Qualify For A Reverse Mortgage Loan

7/20/2009

posted by N. Sioris

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A reverse mortgage loan allows homeowners 62 and older a safe way to tap into home equity without the burden of making future monthly payments.

And, because a reverse mortgage loan does not require monthly payments or any re-payment as long as the borrower lives in the home, there are no income or credit qualifications to be met in order to qualify for a reverse mortgage loan.


TO QUALIFY FOR A REVERSE MORTGAGE LOAN THE CRITERIA ARE:


All Owners on the title to the home must be 62 years or older.

The home must be the primary residence for the borrower(s).

The home should have no mortgage or the mortgage balance

should be small enough to be paid off by the reverse mortgage loan



Not all properties qualify for a reverse mortgage loan. Some that do not, are manufactured/mobile homes built before June, 1976 and any mobile or manufactured home that is on rental land.

Not all co-op properties qualify. If your property is a co-op check here for more reverse mortgage loan information. You can also call us at 1-888-269-1098.

In most cases Agricultural land does not qualify for a reverse mortgage loan.

You can read a more detailed description of how to qualify for a reverse mortgage loan here.


You may also wish to request a free reverse mortgage loan quote today.


See exactly what a reverse mortgage loan might provide for you in the way of supplemental monthly income, a line of credit to be used as needed, or a lump sum pay out to you all at once.

There has been increased interest in a reverse mortgage loan as a result of the current credit crisis that we are facing. Many people that have lost substantial stock market assets are now turning to a reverse mortgage loan so that they don't have to liquidate depressed assets.

Still other senior homeowners have actually saved their homes from foreclosure by using a reverse mortgage loan. They not only save the home but they become mortgage payment free for as long as they live in the home.

Reverse Mortgage - NOT a Loan of Last Resort

6/18/2009

posted by N. Sioris

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Despite the fact that the media continue to refer to a reverse mortgage as a "loan of last resort" reverse mortgages are still in high demand. It is unfortunate that some so called advisers or financial experts still do not have a comprehensive understanding of how much of a life saving tool a reverse mortgage can be for many senior homeowners.

It certainly can be argued that a reverse mortgage is an expensive option on its' face. However, how expensive is it actually, if you have no other way to supplement your retirement income? I always say, "It is expensive if you don't need the money, but it is NOT expensive if you do need the money." Think about it. If you have no ability to income qualify for a loan or mortgage that requires repayment on a monthly basis, and you do not have good credit or a high credit score, how is it that you are going to be able to access your home equity in any traditional fashion?

Some will argue that you can always get a HELOC - Home Equity Line of Credit without having to prove your income. Well, that was possibly the case a year or two ago, but not now. Even people with stellar credit histories and high credit scores are seeing their home equity lines of credit frozen and or closed arbitrarily and without notice. Underwriting standards for new home equity loans today are very strict and require full documentation of income, credit, and assets. How many retirees can pass this type of credit scrutiny?


You Could Sell Your Home To Get The Cash

Of course, you could sell your house. Then you would have the cash from the sale. But at what price in today's declining market? Is that going to really be the answer to your money problems? More than likely, not. After all, if you sell your home and get some cash from the sale, you still have to live somewhere, right? And how much will that cost? How long will the sale proceeds actually last?

So, pleeeease...........stop listening to the same old tired saw: "A Loan of Last Resort." I find it pretty ironic that all of these talking heads never offer up an alternative solution, after they throw the baby out with the bath water. These two clips are representative of the typical incomplete, half-truth reporting being done at a time of serious financial difficulty for almost every American citizen, young and old. Shame on them!



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AARP Says Majority of Reverse Mortgage Borrowers Are Satisfied

6/15/2009

posted by N. Sioris

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An AARP survey concluded that the majority of reverse mortgage borrowers that have taken out a reverse mortgage are happy with their decision. The AARP survey also said that a reverse mortgage has greatly improved the lives of the senior homeowners that have tapped into their home equity through a government insured HECM reverse mortgage loan. The video below is a testimonial that supports the AARP reverse mortgage survey. The couple in the video are representative of thousands of satisfied retired homeowners that have taken advantage of a reverse mortgage in recent years.

Reverse Mortgage Saves Tennessee Woman's Home

6/09/2009

posted by N. Sioris

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We are thrilled to report that Lorraine Zickefoose, from Alcoa, Tennessee will not lose her home through a Wells Fargo foreclosure. We first reported her story on this blog on May 21st. Since then her church, her community and a dedicated mortgage broker worked tirelessly to raise money and then negotiate a settlement with Wells Fargo to save her home.

She successfully used a reverse mortgage loan for the bulk of the proceeds to satisfy her current "forward" mortgage. After eight months of effort, the mortgage broker was finally able to get the lender to agree to reduce the mortgage balance by approximately $17,000.

In the end they were able to save Lorraine's home from foreclosure. But according to comments from the mortgage broker, Wells Fargo was less than cooperative throughout the process. It makes you wonder, if it was the recent publicity that finally made the behemoth bank back down and come to a reasonable settlement for the 73 year old Tennessee resident.

Read The Full Story Here.

Reverse Mortgage Could Stop Foreclosure For Tennessee Woman

5/21/2009

posted by N. Sioris

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A 73 year old Tennessee woman is trying to stop the foreclosure of her home with a reverse mortgage. She has been approved for the reverse mortgage, but when her home was appraised, the value of her home was not sufficient enough for the reverse mortgage to entirely payoff her existing mortgage.

Many folks have been able to successfully prevent home foreclosure by using a reverse mortgage, which allows them to payoff the full balance owed on their homes and then live mortgage free for as long as they remain in the home.

The caveat, however, is that the appraised value of the home is the most important component to determine how much money a senior is allowed to borrower from a reverse mortgage. In the case of Lorraine Zickefoose from Alcoa Tennessee, her homes' value was not high enough to completely satisfy her current "forward" mortgage balance.

She is now facing eminent foreclosure unless she can come up with the difference between the amount of money she can get from the reverse mortgage and the loan balance on her current mortgage. As you can see from the video clip linked below, her church and community are rallying around her to try to raise the necessary funds in order for her to save her home from foreclosure.

Even though Lorraine's story is not finished yet, it is clear that without a reverse mortgage she would have had no hope of saving her home from foreclosure. Now with the help of her community and the proceeds from the reverse mortgage, she has a shot at saving her home and being able to live mortgage free for the rest of her life.

Watch her story here:

Long Term Care Expenses Put Retirees at Risk

4/02/2009

posted by N. Sioris

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The diabolical collapse of the stock market that has devastated retirement savings for millions of retirees as well as workers, has brought attention to the fact that nearly two-thirds of U.S. households are at risk of not being able to maintain their standard of living after retirement if long term health care costs are factored into the equation.

According to a study conducted by the Center for Retirement Research at Boston College, 65 percent of households will have insufficient income to cover the costs of nursing home care and other end-of-life long term health care costs.

Alicia Munnell, director of the Center for Retirement Research said, "the cost of health care will create such an unexpected hardship on unprepared retiring baby boomers that it's imperative to sound the warning now." She has been concerned for years about the imminent retirement crisis caused by several problems. Those problems include a Social Security system that will fall short of being able to provide current levels of support, insufficient personal savings, and rapidly escalating costs for health care.

Current estimates indicate that one third of people age 65 today will need to enter a nursing home for at least three months. Some will need to stay for an extended period of time.

End-of life health care costs are high. Hiring a home health care aide for four hours a day, five days a week costs nearly $20,000. per year. The cost of a private nursing home is $77,000. per year.

Options for funding this type of care include relying on Medicaid, buying long term care insurance, selling the family home and tapping into home equity through a Reverse Mortgage Loan.

However, even if households work to age 65 and annuitize all their financial assets, including the proceeds from a Reverse Mortgage Loan on their homes, The National Retirement Risk Index has shown that 44 percent of people will still be "at risk." "At risk" means they will be unable to maintain their standard of living during retirement.

Seniors Will Get $250.00 Stimulus Checks In May

3/04/2009

posted by N. Sioris

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In May 2009, senior Social Security recipients and retirees will receive $250.00 per person from Uncle Sam, as part of the economic stimulus plan.

The senior payment figures are; $250.00 for individuals, $500.00 for couples that both receive Social Security benefits. This will include retirees, older veterans, Supplemental Security Income (SSI) beneficiaries, and people with disabilities.

Unlike the previous rebate distribution program in 2008, recipients will not have to file a tax form in order to receive the money. It will simply show up in the regular Social Security distributions - either through direct deposit or a check in the mail.

Federal and State retirees who do not receive Social Security benefits also qualify to receive the payment but may have to file a 2009 tax return in order to receive it.

The House of Representatives draft of the stimulus package, which was approved in January did not include the senior payment, however it did end up in the Senate approved bill after Montana Democrat, Max Baucus, Chairman of the Senate Finance Committee proposed it. The Senate provision was also strongly promoted by Democrat Senator, Sheldon Whitehouse, of Rhode Island.

AARP supported the measure from the beginning. AARP sent a letter to lawmakers arguing that many retirees would be ineligible for "workers' tax credits" but were in need of hardship relief. AARP cited research that shows that older people tend to spend such cash payments immediately.

You can read more about the Social Security's Economic Recovery One-Time Payment by clicking here.

You can also link to Frequently Asked Questions about the the payments by clicking here.

The Anatomy Of The Credit Crisis

2/24/2009

posted by N. Sioris

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Anyone interested in a simplified visual explanation of the very complicated process that took place in the financial markets that lead us to the disasterous place that we all find ourselves in today, should take a couple of minutes to view these excellent videos by Jonathan Jarvis, a graduate student at the Art Center College of Design in Pasadena, California. What an awesome job he did with a very complex subject!

Standard of Living Will Permanently Change As a Result of Financial Meltdown

2/23/2009

posted by N. Sioris

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Check out these two video clips from Yahoo finance. Howard Davidowitz, retail industry consultant and chairman of Davidowitz and Associates speaks bluntly about the state of our standard of living. At the most basic level, he says that Americans had better get used to a permanent change in life style and standard of living.

He says "The end of rampant consumerism is ultimately a good thing. But the unraveling of an economy built on debt-fueled spending will be painful for years to come." He foresees higher savings rates and people trading down in both the goods and services they buy - as well as their aspirations.

Reverse Mortgage Could Ease Pain For Bernie Madoff Victims

2/20/2009

posted by N. Sioris

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Each day that goes by we hear more tragic stories of those that have been vicimized by Bernard Madoff - and his $50 Billion Ponzi Scheme that he allegedly mastermined.

The video clip below is one such heartbreaking tale of Ian and Terry Thiermann from California. They lost their entire life savings of seven hundred thousand dollars. Now at age 90, Ian Thiermann has been forced to go back to work. Fortunately, a neighborhood grocery store "created" a job for him as a greeter.


Could A Reverse Mortgage Help Them?

In the video clip you will hear that he and his wife still have a mortgage. With their sudden loss of fortune, one wonders if they have thought about the possibility of taking out a reverse mortgage. A reverse mortgage loan would eliminate their current mortgage balance and leave them mortgage payment free for as long as one or both of them continue to live in their home.

I hope they decide to consider a reverse mortgage as partial help with their monthly budget. It could relieve some financial stress.

Reverse Mortgage Loan Limit Increased To $625,500.

2/18/2009

posted by N. Sioris

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President Obama's $787 Billion economic stimulus package included a new higher national FHA - HECM Reverse Mortgage loan limit of $625,500. The previous loan limit was $417,000. nationally except in HI, Alaska and Puerto Rico.

The new higher loan limit of $625,500. is particularly good news for several reasons:

1. Due to the current financial meltdown on Wall Street there are no longer any lenders in the market that are willing to loan "Jumbo" loan amounts on a reverse mortgage. That left anyone with a high value home - (for example $450,000. or higher,) access to such a small amount of their equity, that it was hardly worth their while to even bother with an FHA/HECM reverse mortgage.

2. The new higher loan limit of $625,500. will now offer anyone with a home value of approximately $417,000. or higher access to substantially more money than under the previous limit.


Two Caveats To The New Lending Limit:

1. Under the new law, the higher loan limit will only be available for loans originated for the balance of 2009. (It is possible that Congress could request an extension of this time frame, but as of now, it will expire at the end of the year.)

2. Lenders will not be able to process or close loans based upon the higher loan limit until HUD issues an official "Mortgagee Letter" allowing the implementation of the new guidelines as set forth in President Obama's Stimulus Package.

As a side note, one would hope that since there is a possibility that the higher lending limit will permanently expire at the end of this year, that HUD will act quickly to get this provision implemented. After all it is not called a "Stimulus" package for nothing.

If you are interested in receiving a reverse mortgage loan estimate based upon the new higher lending limit, click here or call our offices toll free at: 1-888-269-1098

Will The Pension Benefit Guaranty Corp. Be Next In Line For A Bailout?

2/17/2009

posted by N. Sioris

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The Pension Benefit Guaranty Corporation was created by Congress in 1974. Its purpose is to guarantee the retirement security of workers covered by defined-benefit pension plans. It insures more than 29,000 employer-sponsored benefit pension plans and the pensions of 44 million workers and retirees.

The deepening recession spells trouble for PBGC, which all ready has an $11 Billion deficit that more than likely will grow larger as Corporate America continues to falter through the worst economic crisis since the Great Depression. As companies report shortfalls in their pension funds, it is certain that The Pension Benefit Guaranty Corporation will be forced to take over the pension plans of a rising number of bankrupt businesses.

The future financial health of PBGC is difficult to forecast. It hinges on interest rates, the length of the recession and the agency's ability to successfully "play" the market with its own investment portfolio.

Currently the agency has $63 Billion in assets. However, it is obligated to spend $74 Billion on pension benefits in the coming years. PBGC might have time to rebound, but over the long term it could become insolvent and require a bailout.

The agency gets its money from premiums paid by companies that sponsor the pension plans along with revenue that it earns from its investments. The corporation's balance sheet has taken heavy hits in recent years. Nine of the ten largest pension plan terminations in the agency's history, including United Airlines, Bethlehem Steel and Kaiser Aluminum, have taken place since 2001.

When a pension plan is terminated, the agency takes over and pays the benefits to the retired workers. However, the retirees may not get the full amount that was promised by their company. The maximum guaranteed amount from the PBGC is currently $54,000 per year for someone that is retiring at age 65.

Some pension experts shrug off the agency's $11 Billion deficit. They note that the 35 year old corporation has operated at a deficit for most of its existence. They say the agency has many years to recoup its losses and fulfill its obligations to pensioners.

But to those "experts" I say what President Obama and many folks in Congress have been saying recently, and that is: "These are uncharted waters that we are in today." Are we really able to predict the future based upon the past?

Home Prices To Plunge Another 11 Percent This Year

2/11/2009

posted by N. Sioris

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According to Mark Zandi, Chief Economist and co-founder of Moody's Economy.com, housing prices will dip another 11 percent before bottoming out at the end of 2009. If Zandi is right about when we will hit the bottom, then by that time the slide will have cut home values by 36 percent nationally. Of course some areas will have been hit by much larger losses. For example, Southeast Florida and parts of California are expected to realize losses of more than 50 percent.

Zandi qualified his statement by saying; "Presuming we see strong action by policymakers to help support the economy and the housing market, prices will begin to recover by the end of this year."

Demand for new and existing homes began to fall in 2005, marking the end of a five year U.S. housing boom fueled in part by easy credit for subprime borrowers. Existing home prices tumbled from an average high of $230,200. in July 2006 to $175,400. in December, 2008 according to the National Association of Realtors.

In another forecast this week from a Houston based housing market researcher, Metrostudy; housing starts are estimated to plunge 47 percent to 483,000 in 2009.

Retirees Are Battered By $12 Billion Loss of Dividend Payouts

2/10/2009

posted by N. Sioris

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The most severe decline in dividend income is expected to take $12 Billion out the pockets of shareholders in the coming months. Dividends are being cut at the fastest pace in 50 years. Many of the dividend cuts are coming from U.S. companies whose investors have been relying on dividends to provide income during this recession.

Retirees that have all ready been battered by steep market declines are now facing the loss of cash flow that many rely heavily upon to supplement their annual cash flow.

All ready this year, seven companies in the Standard & Poor's 500 Index have decreased their dividends. If the trend continues, this will be the worst year for dividend cuts since 1958, when annual payments fell 8.4 percent, according to S&P.

Of the seven companies that said they will cut dividends in 2009, six are in the financial industry and all reduced their payouts by at least 50 percent. The largest decrease has come from Bank of America, which said it will slash its dividend from $1.28 a share annually down to 4 cents a share. That alone, wiped out $6.2 billion in annual cash payments to investors.


Could It Be Worse Than The 50 Year Record?

Howard Silverblatt, senior index analyst at S&P, is quoted as saying; "It is easy to say this is going to be the worst in 50 years, but the bigger question is whether it is going to be much worse than that."

One solution for retirees that own a home with little or no mortgage balance is a reverse mortgage. A reverse mortgage allows seniors age 62 and older to tap home equity in order to supplement retirement income. No mortgage repayment is required as long as the home is occupied by the senior. Their are no income or credit qualifications, and the money is non-taxable.

Request A Free Reverse Mortgage Quote Today!

AARP Offers "Real Relief" - An Online Resource

2/05/2009

posted by N. Sioris

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As retirement accounts continue to shrink, job losses accelerate, families lose their homes, and the cost of food and health care skyrocket, AARP and the AARP Foundation have launched a new online resource site called "Real Relief."

Real Relief was created to assist older Americans weather this unprecedented economic storm. This one-stop online site emphasizes jobs and job training, and
financial issues like money management and investment help.

According to the Department of Labor, 4.9 percent of age 55 and older workers were unemployed last month. This is a 58 percent increase from one year ago and is the highest figure since 1983.

While workers of all ages are facing layoffs as a result of the worst economic downturn in decades, those workers age 50 and older are especially vulnerable. And for those that have all ready retired, the economy could have a serious impact on their investments and retirement savings, jeopardizing their financial security in future years.

A few of the resources that can be found at the AARP Real Relief site are:

• Tools and resources for retirees who may be facing economic challenges.

• Tips on protecting your money - avoiding scams - choose a financial planner

• Help with taxes and money management: Free tax preparation services

• Public benefits and public assistance programs

• Tips of job seekers - Job search strategies

• Money saving tips - where and how to cut back on expenses

Market Meltdown Illustrates The Importance Of Retirement Planning

2/04/2009

posted by N. Sioris

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If there is one thing we have all learned during the last 6 to 12 months, it is how crucial solid retirement strategies are for our financial well being over the long term. Diversification, risk management, and age appropriate investments are just a few of the lessons that we should all take away from this economic disaster. Below are a couple of interesting stories that I notices over the last few days, that speak to this topic.


Wall Street Crushes Retirement Plans For Former Economics Journalist

It seems that no one is immune from the effects of the devastation taking place on Wall Street and Main Street.
A former economics journalist and recent retiree, Robert Lyle was caught short with too much of his savings in stocks. Now his retirement income is much less than what he had planned for. He wishes he had an old-fashioned pension instead of a 401(k).

Listen to his story at this NPR link.



Helping Mom With Retirement

The issue of what adult children can and should do to help assure that their parents are financially prepared for retirement is one that's getting more attention as lifespans increase and we become increasingly reliant on our personal savings to fund our post-career lives.

If a parent isn't on the ball with their own retirement planning, it may be time for adult kids to step in.

Indeed, a global study of inter-generational issues released early last year by The Hartford found that more than a quarter of Americans 45 and older say they are currently caring for both children and parents or older relatives. Given how badly the retirement savings of many retirees have been hit by the market meltdown, I wouldn't be surprised if that number has already increased or will over the next few years.

Read the complete CNN Money.com article here.

Financial Tsunami Devastates Retirees

2/03/2009

posted by N. Sioris

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A recent publication in AARP Bulletin Today, entitled "Tough Times For Retirees," describes the stark reality that many older Americans are facing as they witness their retirement savings being swept away by the financial tsunami that has devastated Wall Street and Main Street.

Millions of retired Americans are facing the prospect of getting by without the savings cushion they thought would be there for them in their old age. We have just witnessed the worst stock market crash since the Great Depression, and many retirees were not prepared for such a catastrophic event.

One retiree that was profiled in the article said: "That in the three months between August 31 and November 30, 2008, the market downturn reduced the value of his investments by about 32 percent." He went on to say that "I'm devastated. That is all the money I have left in the whole world. I don't know what to do."

Not Just A Financial Trauma

For retirees like him the 2008 market meltdown has not just been a financial crisis but an emotional trauma as well. Older adults have described feelings of embarrassment due to the possibility they will not have enough money to make it in retirement. Some report that they will be forced to rely on their children for support, something they want to avoid because they hate the thought of burdening their families.

The stock market decline has not only harmed retirees, but millions of boomers that were on the verge of retirement. Many workers have decided not to retire as planned. An AARP survey of workers age 50 and over showed that 59 percent said they were likely to postpone retirement.

The number of dollars lost in the market decline has been mind-boggling. According to The Investment Company Institute, as of October 31, 2008, the assets of the 4,800 stock funds had declined by $2.59 Trillion. $2.39 Trillion was attributable to market-related losses. The other $195 Billion decline represented the amount that investors pulled out of the funds.


A Reverse Mortgage Could Help

If you find your situation to be similar to those outlined in the AARP Bulletin Today article, you may wish to consider tapping into home equity through the use of a reverse mortgage. A reverse mortgage can supplement your retirement income, allow you to remain living in your home as the owner, and never make a payment on the reverse mortgage loan as long as you live in the home.

Request a reverse mortgage loan quote today!

National Housing Values Plunge To Lowest Level In 35 Years

1/30/2009

posted by N. Sioris

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According to the National Association of Realtors' Home Affordability Index, "homes haven't been this affordable for the typical buyer since the early 1970s." The index takes into account the median home price, median income and mortgage rates to determine how financially fit Americans are to buy a home.

Five years ago the national median home price was $178,500. Three years ago the median price was $216,800. One year ago the median price was $197,200. And, as of December of 2008, the national median home price was $174,700.

Unfortunately, these statistics can be a double edged sword. Job losses are expected to be between 300,000 and 500,000 a month this year, according to Jeoff Hall, an economist at Thomson Reuters, which of course pulls huge numbers of potential buyers out of the market.

Patrick Newport of IHS Global Insight said; "Prices are collapsing and will probably drop another 15 percent." He does not see a bottom in home prices until the first quarter of 2010.

For all our sake, let's hope these predictions do not come to pass.

If you think you will need to tap into home equity to supplement retirement, you may wish to proceed with a reverse mortgage now, before home prices drop further. The amount of money you will be allowed to access through a reverse mortgage is heavily dependent upon the value of your home.