reverse mortgage vs. remortgage! how popular is a reverse mortgage?

Answer 1

It's only available if you are over 65. With a reverse mortgage, the mortgage company advances you an agreed sum of money. No payments are made. When you die, they settle the mortgage with the estate. If the balance is short, the mortgage company eats the loss. If there is any excess, it generally goes to the estate though some do provide for full title to pass to the mortgage company.

Answer 2

Actually reverse mortgages are for senior homeowners age 62 and over.

How popular is a reverse mortgage?

Reverse mortgages are still a niche market in the mortgage industry but they are growing in popularity as baby-boomers enter retirement, often with litle savings other than their home equity.

The HUD/FHA Home Equity Conversion Mortgage (HECM) is the most common form of reverse mortgage. It is geared for homes valued under $400,000. Less than 300,000 HECMs have been originated since the program started in 1989, but in recent months the pace has picked up to about 10,000 per month. Through the first 5 months of 2007, 47,511 HECMs were originated.

There are private reverse mortgages too. These are usually geared toward higher value homes.

Reverse mortgages have huge growth potential, but they currently are still a tiny fraction of the overall mortgage industry.

California and Florida are the leading markets for reverse mortgage largely because these markets (until the last 6 months or so) have seen such tremendous home value growth. Here's a chart showing the most popular markets for HECM reverse mortgages:

http://www.reverse-mortgage-information.org/top-reverse-mortgage-markets/