In the midst of what you may consider a “scary” and “uncertain time” as a homeowner, you may well be financially positioned a little better than you think.

For homeowners with equity in their homes, the Home Equity Conversion Mortgage — sometimes known as a reverse mortgage — may provide an answer to those concerned about cash flow or future living arrangements. Last year, nearly 80,000 Americans took advantage of reverse mortgages. While that number dropped substantially — as home values and equity dropped — it still provided a valuable tool to seniors who desire to continue to live in their homes but need financial assistance to do so.

What do you need to know?

• To qualify for a reverse mortgage, a homeowner needs to be 62 years old and have equity in their home. Those are the only requirements.
• The amount of money available to the homeowner is based on actuarial tables, meaning that the older a homeowner) is, the more money that is available.
• As long as the homeowner (or one of the homeowners if a couple) continues to reside in the house, the lender cannot initiate repayment.
• Any money a homeowner receives that comes from reverse mortgage is NOT taxable and does not impact social security or Medicare.

Because it is an FHA-backed program there are safeguards inherent in these mortgages that are reassuring, including:

1. A reverse mortgage does not mean a homeowner relinquishes title to the home; the title of the home remains with the senior and the estate.
2. A reverse mortgage ensures that a homeowner will never owe more than the selling price of the home.
3. Even if the holder of a reverse mortgage uses up all the money, they are not required to move away from the home.
4. The loan becomes due after a home has been vacated for a year.

Perhaps the most important thing to note, according to an industry insider, is that these loans are enormously popular among investor portfolios.  That translates into a very good thing for consumers in that much like a regular mortgage, you (or a member of your family) has the leverage to negotiate down and even eliminate many of the fees associated with the loan, especially if you get a couple of lenders bidding against each other.

AARP (http://www.aarp.org/money/credit-loans-debt/reverse_mortgages/)  and the National Reverse Mortgage Lenders Association (http://www.reversemortgage.org/) websites are good places to go for more information and to locate a lender in Central Indiana.