What is a reverse mortgage?
A Reverse mortgage is a loan available to seniors 62 or older which allows them to convert part of the equity in their home into tax-free cash. The senior continues to own the home and will actually pass the home down to his or her kids when he/she dies. The only resposibilities a homeowner has is to pay property taxes, homeowners insurance and live in the home. A reverse mortgage can also be used to purchase a home.
How can I use the money I receive from a reverse mortgage?
There is no restriction on how the proceeds from a reverse mortgage can be used. A client can take money up front, get monthly income or leave the money in a growing line of credit. If there is a mortgage on the home the reverse mortgage automatically pays off the mortgage.
How can I qualify for a reverse mortgage?
To qualify for a reverse mortgage a borrower must be at least 62 years old or older, own a home, and have sufficient equity in that home. It's that easy!
Will my home qualify for a reverse mortgage?
Single-family homes, 2-4 unit properties (one unit occupied by owner), FHA-approved manufactured homes, HUD approved condominiums, and townhomes are eligible for a reverse mortgage.
What are some common reasons why people get reverse mortgages?
People get reverse mortgages for many reasons including pay off an existing mortgage, save their home from foreclosure, get in-home care or a home modification, purchase a home, invest in their business, delay social security, help the kids or pay for their grandchildren's college. This is just a few reasons why people get reverse mortgages.
We've heard negatives about reverse mortgages. What are the downsides?
The major downsides is that you must pay your property taxes and homeowners insurance, and the reverse mortgage has to be paid back when you PERMANTLY vacate the property(ie sell it, go into a nursing home, or pass away). For more information, visit our MYTHBUSTERS section.
How long does it take to get a reverse mortgage?
The majority of reverse mortgages can be completed in under a month, with occasional cases being closed in under 2 weeks.
What is HECM counseling and why do I have to complete it?
HECM(or reverse mortgage) counseling is required by HUD and the FHA. It acts as a consumer safeguard; basically it ensures that you understand what a reverse mortgage is, and that we did a thorough job of explaining the entire program. Our goal is that every senior who goes through the reverse mortgage process understands it and is happy with it.
What is the process to get a reverse mortgage?
The first step is education. In it, we learn about the client's situation and teach the client about how a reverse mortgage would work specifically for them. We also investigate whether a client would qualify for a reverse mortgage or not(as not everyone qualifies). Next, the senior completes reverse mortgage counseling and fills out an application. After that, an appraisal is done and title is ordered. Underwriting then receives the file, and shortly after the client will be "cleared to close". All in all this normally takes under a month.
I have a reverse mortgage; what are my responsibilities?
Your responsibilities are to pay all property charges(ie property taxes, homeowners insurance, condo fees, etc), continue to live in the home, and maintain it.
I already have a reverse mortgage and now my home is worth more money, can I get more money out?
If you've taken all of the money out of your reverse mortgage but your home is worth more you may be able to get a NEW reverse mortgage based on your current property value. If done correctly, the new reverse mortgage will give you extra tax-free cash.
How much money can I get from a reverse mortgage?
The amount will vary borrower to borrower and is based on a few factors including age of the youngest borrower, value of your home, and how much you may owe on an existing mortgage. If you would like to know if you qualify and how much you can get please reach out to us at (267) 289 1095.