The Reverse Mortgage is a great loan for Seniors who have lots of Equity in their home's and wish to withdraw some cash in a number of different ways
A Reverse Mortgage is a loan that allows seniors to erase debts or even give themselves a monthly income
A Reverse Mortgage is a loan designed for seniors ages 62 and over. If we have a husband and wife team and only one spouse is over 62 we can still look at the loan but we should expect the proceeds to be lower.
Most loans that we do as mortgage brokers are called “forward” mortgages where the longer the borrower has that loan , the lower the payoff they will have.
With a Reverse Mortgage, the borrower is using the equity in their home to pay the mortgage so the longer the borrower receives the monthly installments and/or lump sums, the higher the payoff will be.
Contrary to incorrect rumor, the borrower (s) do not lose title to their home when they sign for a reverse mortgage. This is like any other loan when the borrowers move or pass away. The home is sold and the difference between the payoff and the proceeds from sale is your money to use as you see fit.
Now We have a Great Reverse Mortgage option for Condos
In the past, many condo owners did not have a viable reverse mortgage options because a HECM is a FHA loan product and FHA, through the years, has not been the most condo friendly option. In fact it was nearly non-existent.
Now We have sort of a Fannie Mae like option that allows home owners to set up their plan
Get some Feedback as to How Much You can Borrow
Common Myths About Reverse Mortgages
Myth #1: The Bank or Lender Takes Ownership of My Home
FACT: You or your estate retain ownership of your home’s title as long as you stay current with property taxes, insurance, and maintenance. The lender’s interest is limited to the outstanding loan balance as a lien on the property.
Myth #2: A Reverse Mortgage Requires Me to Make Monthly Mortgage Payments
FACT: There are no required monthly payments on a reverse mortgage. You have the flexibility to pay as little or as much as you want, as often as you like. However, you are responsible for real estate taxes, insurance, HOA dues, and property maintenance.
Myth #3: My Heirs Will Be Responsible for Repaying the Loan
FACT: Reverse mortgages are non-recourse loans, meaning the lender can only seek repayment from the proceeds of the home’s sale. Your heirs will never owe more than the home’s value when the loan is repaid. They can repay the loan and keep the home, sell the home and keep any remaining funds, or deed the home to the lender.
Myth #4: To Qualify for a Reverse Mortgage, My Home Must Be Paid Off
FACT: You can have an existing mortgage or debt on your home’s title as long as you have sufficient equity. The reverse mortgage funds are first used to pay off any existing loans.
Myth #5: Reverse Mortgage Lenders Just Want to Sell My House
FACT: You can stay in your home as long as you meet the loan terms, including paying taxes, insurance, HOA dues, and maintenance. If you decide to sell your home, the loan becomes due and payable.
Myth #6: If I Get a Reverse Mortgage, I Will Have Nothing to Leave to My Heirs
FACT: While the loan amount increases over time due to accrued interest and mortgage insurance, your home may appreciate in value. Any remaining funds from the home’s sale, after repaying the loan, would go to your heirs.
Myth #7: I Cannot Sell My Home if I Get a Reverse Mortgage
FACT: You can sell your home at any time. The reverse mortgage will be paid off at closing, and there are no prepayment penalties for selling the home early.
Myth #8: A Reverse Mortgage Should Be Used as a Last Resort
FACT: A reverse mortgage is a versatile financial tool that can enhance your financial plan. It can help pay off an existing mortgage, delay Social Security, or provide an emergency line of credit. Many financial planners now recommend reverse mortgages as part of a comprehensive retirement strategy.
Myth #9: Reverse Mortgages Are Expensive
FACT: Reverse mortgage loan origination costs and interest rates are comparable to traditional mortgages. These FHA loans include insurance costs, such as PMI. Lender fees and closing costs are typically financed into the loan, requiring little out-of-pocket expense. Typically, home education and appraisal costs are paid upfront by the borrower.
Myth #10: If My Lender or Servicer Changes, My Loan Terms Are Subject to Change
FACT: The terms of your loan are defined at closing and, by law, cannot be changed as long as the deed remains in force.