GARDNER, Mass. — GFA Federal Credit Union recently announced it is offering a reverse mortgages program–yet another home loan option to serve members' financial needs.
The reverse mortgage option may prove increasingly popular as aging baby boomers look to the retirement horizon, particularly those who haven't already stripped out a lot of equity with home equity lines of credit they've yet to pay off.
Initially targeted to the parents of those boomers who wanted to remain in their own homes–particularly homes they own outright–the reverse mortgages are available to homeowners 62 or older, providing them with a means to borrow against the equity in their homes without having to make new monthly payments.
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They also retain the title while loan proceeds are taken as a lump sum, in monthly payments, as a line of credit, or in combination. Proceeds may also be used to pay off a current mortgage or equity loan on the property.
Full repayment of the reverse mortgage is not required until the borrower permanently moves out of their home. Reverse mortgages also offer security in that the repayment amount cannot exceed the value of the home.
Brenda Bujnevicie, GFAFCU Vice President of Lending, said the CU selected the government-backed program because it is coupled with a financial literacy requirement to ensure the product is right for the borrower. "We still have a high number of members who are older and we've been lucky in that home values here have not dropped as they have in other areas of the country. Some of them may not have the needed cash flow to help out their children and grandchildren or take those long-awaited cruises or live out those other dreams. "
GFA is a full service community financial institution (www.gfafcu.com) serving Central Massachusetts and Southern New Hampshire with branch locations in Fitchburg, Gardner, Hubbardston, Rindge, Rutland and Winchendon. The CU will begin with internal marketing efforts like a letter to its "Gold Key" (50-year) members, and will also offer seminars open to the public to educate them about reverse mortgages.
Yolo Credit Union in Woodland Hills, Calif. recently offered a seminar to introduce its own reverse mortgage program, entitled, "Financial Comfort in Your Home." American Pacific Reverse Mortgage provides this CU's program. Yolo switched to a community charter in 1997, so all its workshops are available to the public. The seminar promised to teach the "history and myths of the reverse mortgage as well as the benefits and changes that put consumer protection first."
Yolo was founded in 1954 for the purpose of helping deputy sheriffs to pay for their own equipment and uniforms–a requirement of the day.
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