Reverse mortgages can create a win-win situation for real estate practitioners and property owners. They allow cash-poor seniors to remain in their homes by tapping into their equity and help real estate associates build goodwill and future referrals by providing an alternative when a senior isn’t ready to sell.

With reverse mortgages, homeowners receive payment from a lender--in the form of a lump sum, line of credit, or fixed monthly payment--rather than making monthly mortgage payments. The loan does not have to be repaid until the last remaining borrower passes away, the home is sold, or the borrower permanently moves out of the home. It’s a great alternative for financially strapped seniors who would otherwise be able to remain in their homes.

The AARP Website features a section devoted to helping visitors unravel this process. The site is a valuable, objective, resource for reverse mortgage information, featuring a comprehensive guide that walks visitors through the process’s basics. This section can help readers to understand how reverse mortgages work, compare reverse mortgage providers, and decide whether a reverse mortgage is right for them. The guide’s contents include:

· Understanding Reverse Mortgages explains the differences between reverse mortgages and other types of financing, including “forward mortgages.” The section lays out the various payment options that reverse mortgage borrowers can receive.

· Shopping for Reverse Mortgages provides guidelines to evaluate whether a reverse mortgage is the best solution to an individual’s financial needs. It examines three types of reverse mortgages—single-purpose, federally insured, and proprietary--and includes charts displaying the benefits and drawbacks of each.

· Comparing Reverse Mortgages summarizes the costs vs. benefits of the different types of reverse mortgages, including tables that show how different types of reverse mortgages affect a home’s equity.

· Reverse Mortgage Borrower Decisions outlines the downsides of this financial decision--a loan with "rising debt and falling equity," in which seniors accumulate debt while drawing value from their homes leaves less money for their heirs. The section also lists alternatives to reverse mortgages.

The site also contains a number of other resources to help seniors better understand the sometimes difficult process of mortgage finance. A glossary breaks down all the complicated jargon behind the reverse-mortgage process, so phrases like deferred payment loans, 203-b limit, and acceleration clausesmake sense.

Provided under an agreement with NETirement.com Inc., the loan calculator computes estimates for the federally insured "Home Equity Conversion Mortgage" (HECM), and the proprietary Home Keeper Mortgage from Fannie Mae, two nationally available reverse-mortgage programs. These tools can give you a rough idea of how much money a reverse mortgage can generate for a senior homeowner. Estimates for payment options including lump sum, credit lines, or monthly-loan advances. This calculator is only intended as a rough sketch and does not reflect local cost variables, as the site is quick to point out. Visitors can also find out more about reverse mortgages through the Web resources section, which provides links to resources such as the National Reverse Mortgage Lenders Association and the U. S. Department of Housing and Urban Development.

Reverse mortgages can provide a valuable income source for property-rich seniors who lack liquid assets. This financing option isn’t right for everyone. Seniors should seek the advice of a financial experts, to make sure that they understand both the program’s benefits and consequences. (In fact, HECM applicants must undergo counseling before making a loan commitment.) However, if you know a senior homeowner who might benefit from the reverse-mortgage alternative, the AARP reverse-mortgage site can help you and the homeowner better understand the process. You may not make a sale, but you have the satisfaction of helping another person and of building a long-term relationship that may yield business from other senior homeowners and their families and friends.

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Suggest a Site For Review
Every week, REALTOR® Magazine Online's Web review editor surfs the Internet to find sites useful to your business and off-hours lives. Have a favorite real estate Web site that you would like to see reviewed? Send your suggestions to Chris Leporini at mediatech@realtors.org. All decisions on which sites will be reviewed are completely at the discretion of REALTOR® Magazine Online's editorial staff. Please note: this column does not review individual practitioner or brokerage sites.

The column's focus includes free sites, as well as sites that charge for goods and services, but which still offer a free component of practical, sustained value to real estate practitioners, such as a free newsletter or regular news information.

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