A viatical settlement is the sale of a life insurance policy by the policy owner before the policy matures. Such a sale, at a price discounted from the face amount of the policy but usually in excess of the premiums paid or current cash surrender value, provides the seller an immediate cash settlement. Similar to reverse mortgages, viatical settlements involve insured individuals with a life expectancy of less than five years. In countries with high health care costs (such as the United States), this is a practical way to pay extremely high health insurance premiums and other senior care expenses that severely ill people face. Some people are also familiar with life settlements, which are similar transactions but involve insureds with longer life expectancies (two to fifteen years). - From Wikipedia and other sources 5/2007LoanPage.com Helps Baby Boomers Weigh Critical Reverse Mortgage Options
(PRWeb) December 14, 2006 -- As Baby Boomers approach retirement and consider making crucial housing decisions, LoanPage.com, a complete source of mortgage loan tools and lenders, offers new articles that weigh in on reverse mortgage options. "Is a Reverse Mortgage Right for You?" (http://www.loanpage.com/articles-an-advice/home-equity/is-a-reverse-mortgage-right-for-you.aspx) and "Reverse Mortgages May Not Be Worth the Price Tag" (http://www.loanpage.com/articles-and-advice/debt-consolidation/reverse-mortgages-may-not-be-worth-the-price-tage.aspx) reveal that although reverse mortgages may offer homeowners freedom from payments without having to show proof of income, there are important drawbacks to consider.
As these articles explain, the reverse mortgage actually pays homeowners the equity in their homes. The equity may be used for home improvements, as monthly income, or as a cash-out to pay off debt; repayment occurs upon death or sale of the home. Baby Boomers who haven't adequately saved for their long retirements may find these home loans attractive.
Francine Huff, author of "The 25-Day Money Makeover for Women," explains that reverse mortgages may come with a hefty price. "People should be cautious about taking out a reverse mortgage because they can drain their equity. If you're planning to leave your home to your children, using a reverse mortgage may not be the best strategy. Even if your children inherit your home, the balance of a reverse mortgage will still have to be paid off. Some heirs may not have the cash to pay off the loan and be forced to sell."
The U.S. Department of Housing and Urban Development reports that the number of reverse mortgages has increased from fewer than 6,000 in 2000 to more than 48,000 in 2005. As the nearly 76 million baby boomers approach retirement, the popularity of reverse mortgage loans is expected to keep growing. Before these baby boomers begin tapping into their collective $2 trillion in home equity, they should consult LoanPage.com articles for reverse mortgage information. (http://www.loanpage.com/articles-an-advice/home-equity/is-a-reverse-mortgage-right-for-you.aspx)
LoanPage.com is a complete source of mortgage loan tools and resources, including calculators and a mortgage glossary. Visitors can find answers to the most common loan questions, download a loan application, or find lenders in their area.
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