Your Questions About Reverse Mortgage

Mary asks…

How can I use reverse compound interest to pay off my 30 year mortgage faster?

Instead of using an expensive company to tell us when and how to pay off our mortgage faster, Is there a way I can figure out the formula myself? I want to pay off our mortgage quickly by using reverse compound interest.

admin answers:

You are over thinking it. Just pay extra whenever you can.

Charles asks…

If I have a reverse mortgage can I still get a second mortgage for debt consolidation?

admin answers:

Magoogan, while I’m not an expert, generally you should avoid getting a mortgage, especially since you have a reversed mortgage and are already in debt, it seems. In a way, you seek to incur debt (i.e., get another mortgage) to pay down other debt, which is not the way to go.

How much is your current debt that you seek to consolidate? Are there ways you can try to pay off the debt without getting yet another mortgage–like,for example, sacrificing some things in order to save up money to put towards paying down the debt on your own? Have you met with a local financial expert to see what your options are? I’m sure they vary by location.

Listen, here’s an informative article on tips to avoid mortgage defaults, and one of them includes what you are doing–realizing and not ignoring that you have a financial crunch, which you seek the fix:

http://yourhandymanzone.com/Your_Handyman_Zone_How_To_Pages_Real_Estate_Zone_Buying_Your_House_Mortgage_Default_Avoid_Foreclosure.htm

Hope you find this helpful, and that you get through your financial troubles.

Good luck!

.

Source(s):
The Internet. Just whatever is available online and what I have on my mind, including the inclusion of relevant sites, like the one cited that came into existence from my efforts, which is intended to be useful. Helping people get the relevant info they want is great.

Susan asks…

Is a Reverse Mortgage a safe loan?

My neighbor told me about these reverse mortgage loans and I wanted to ask here if this a safe way to get some cash out of my home. I live in Ft. Lauderdale, Fl. and am retired 6 years now.

admin answers:

A reverse mortgage is a really great thing if you have lots of equity in your home, and you don’t have very much liquidated cash to enjoy your retirement. My mother had a house paid in full in Santa Barbara, CA but was living off of social security checks. I helped her get a reverse mortgage loan from Financial Freedom. Then she was living life to the fullest until she passed away 6 years later. My siblings were livid when they found out she got that loan, because they thought she would eat up their inheritance. But she sure loved life those last years of her life, going to the off-track horse racing, bought a new car, new hi-def tv, remodeled her kitchen with Viking appliances. So, yes it can be a very good thing. But you must remember that it is basically selling your house slowly back to a financial institution. If my mom would have lived long enough, my brother and sister (and me) would not have inherited a dime, but that was ok with me.

Anyways, you can find some info and resources about reverse mortgages here:

http://reversemortgageresource.blogspot….

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Michael asks…

Is a Reverse Mortgage a safe loan?

My neighbor told me about these reverse mortgage loans and I wanted to ask here if this a safe way to get some cash out of my home. I live in Ft. Lauderdale, Fl. and am retired 6 years now.

admin answers:

A reverse mortgage is a really great thing if you have lots of equity in your home, and you don’t have very much liquidated cash to enjoy your retirement. My mother had a house paid in full in Santa Barbara, CA but was living off of social security checks. I helped her get a reverse mortgage loan from Financial Freedom. Then she was living life to the fullest until she passed away 6 years later. My siblings were livid when they found out she got that loan, because they thought she would eat up their inheritance. But she sure loved life those last years of her life, going to the off-track horse racing, bought a new car, new hi-def tv, remodeled her kitchen with Viking appliances. So, yes it can be a very good thing. But you must remember that it is basically selling your house slowly back to a financial institution. If my mom would have lived long enough, my brother and sister (and me) would not have inherited a dime, but that was ok with me.

Anyways, you can find some limited info and resources about reverse mortgages here:

http://reversemortgageresource.blogspot.com

If I were you I would just do a Google search for “HUD Reverse Mortgage” or “Financial Freedom”
_____________

Betty asks…

Anypne interested in talking about the pros and cons of a Reverse Mortgage?

admin answers:

The most popular Reverse Mortgage is the Home Equity Conversion Mortgage (HECM) which account for over 90% of Reverse Mortgages done to date. The HECM is Federally regulated and insured (FHA—HUD) They set the rules and regulations. AARP just released a study
(12-12-2007) here’s the web address that will link you directly to the report on AARP website…

Http://www.aarp.org/research/credit-debt…

You can also go directly to www.HUD.gov to research Reverse Mortgages. Seeing it’s their program why not go right to the source. Part of the Reverse Mortgage process is that you have to talk to an independent HUD approved third party counselor to make sure you understand the program and that it was explained to you correctly. (government safeguard). There is no charge for this and you can do this anytime you want. Just another avenue to answer your questions. I hope these resources help in your decision making. If I can be of any other assistance let me know. For disclosure purposes……I have been in the Reverse Mortgage business for over 2 years and I am a Reverse Mortgage Consultant for EverBank Reverse Mortgage, feel free to contact me with any other questions you have.

Regards,

Stephen

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Your Questions About Reverse Mortgage

George asks…

What exactly is a “Reverse Mortgage” and what are the advantages and disadvantages?

admin answers:

The advantages are for the mortgage company and the disadvantages are for the homeowner. Stay away from this product it is full of fees and is usually a ridiculous interest rate.

Thomas asks…

Can you get downpayment assistance from the state of california or the federal govt for a reverse mortgage?

Is there such a program?

admin answers:

I think you do not understand reverse mortgages. If anyone tell you there are fees or a down payment needed for a reverse mortgage they are lies and cheats. Don’t walk – RUN away from them! Reverse mortgages, however, are rarely a good idea.

Here is what is supposed happen – you enter into a reverse mortgage say at age 70 on a 100K house. They think you will likely live another 15 years at most and they offer to pay you $450 a month for life. If you live longer than that they keep paying, however, if you doe they get the house without making anymore payments to your estate. So if you die after 1 year you loose the house.

A better option in most cases is to simply take out fixed rate second mortgage and use some on the money to make payments. This get you money you need and also helps protect the asset for loss if you do not live as long as you hope.

You need to talk to a financial planner – check to see if you bank has one and make sure this is a good idea for you

Daniel asks…

What are the pitfalls of a reverse mortgage,on a fourplex, that they live in?

admin answers:

Your question is somewhat vague, but I’ll try to give you an answer the best I can relating to revers mortgages! I don’t know how the fourplex has anything to do with it, but a reverse mortgage is instead of making payments on your house, you get the equity out of it without having to make payments!

A reverse mortgage can be great for a retired person who still wants to live in their own home who will most likely pass away before another move.
After the homeowner dies, the immediate family inherits the home and decisions have to be made because the family or beneficiary to the will have to either sell the home or pay back the amount taken out as equity in a reverse mortgage within a years time!

It is my understanding that this type of mortgage can only be used by a person in a single family residence and if your family member has a fourplex with a reverse mortgage on it, then rules have changed!

I would think rental income from the fourplex, even if the family member was living in one unit, would be enough to sustain them in their own home!

I would also do what ever you can to save and keep that piece of property bbecause a piece of income producing property is a great asset to have and keep in the family as long as members of the family can get along and maintain it!

The biggest pitfall of a reverse mortgage is the beneficiary of the person who passed away will have to pay ALL the money back with interest when the family member dies. You can put a new mortgage on the property and take out enough to pay off the cash amount the reverse mortgage paid out and this is how most people get out of the reverse mortgage, but you MUST do this within 12 months after the property owner is gone and you inherit it!

I hope this helped you!

Steven asks…

Can anyone out there respond to a question I had from a friend about reverse mortgage.?

She sent me a spreadsheet with 5 different choices. I need an opinion of which one is the best for her mom.

Pleae let me know your e-mail so I can send the spreadsheet.

admin answers:

Don’t do a reverse mortgage. It’s the worst thing an older person can do… Their home will just be stolen from them eventually.. Ugh bad idea

Robert asks…

Have any senior citizens ever taken out a reverse mortgage?How did it work out?Are you glad you did it?

I am considering getting one.I think everything has a down side,but I haven’t found one yet in that program.

admin answers:

The most popular Reverse Mortgage is the Home Equity Conversion Mortgage (HECM) which account for over 90% of Reverse Mortgages done to date. The HECM is Federally regulated and insured (FHA—HUD) They set the rules and regulations. AARP just released a study
(12-12-2007) here’s the web address that will link you directly to the report on AARP website…

Http://www.aarp.org/research/credit-debt/mortgages/2007_22_revmortgage.html.

You can also go directly to www.HUD.gov to research Reverse Mortgages. Seeing it’s their program why not go right to the source. Part of the Reverse Mortgage process is that you have to talk to an independent HUD approved third party counselor to make sure you understand the program and that it was explained to you correctly. (government safeguard). There is no charge for this and you can do this anytime you want. Just another avenue to answer your questions. I hope these resources help in your decision making. If I can be of any other assistance let me know. For disclosure purposes……I have been in the Reverse Mortgage business for over 2 years and I am a Reverse Mortgage Consultant for EverBank Reverse Mortgage.

Regards,

Stephen

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Your Questions About Reverse Mortgage

Chris asks…

What are the pros v. con on getting a reverse mortgage?

I believe her thinking is that the equity paying off the house would be a good idea. I’ve tried to see the advantage in it, but for some reason I just can’t make the numbers work. Also, if the equity is paying off the house who then “owns” the house since she is no longer paying the mortgage anymore. Any and all advice is greatly appreciated! Thanks and HAPPY NEW YEAR!!

admin answers:

The most popular Reverse Mortgage is the Home Equity Conversion Mortgage (HECM) which account for over 90% of Reverse Mortgages done to date. The HECM is Federally regulated and insured (FHA—HUD) They set the rules and regulations. AARP just released a study
(12-12-2007) here’s the web address that will link you directly to the report on AARP website…

Http://www.aarp.org/research/credit-debt…

You can also go directly to www.HUD.gov to research Reverse Mortgages. Seeing it’s their program why not go right to the source. Part of the Reverse Mortgage process is that you have to talk to an independent HUD approved third party counselor to make sure you understand the program and that it was explained to you correctly. (government safeguard). There is no charge for this and you can do this anytime you want. Just another avenue to answer your questions. I hope these resources help in your decision making. If I can be of any other assistance let me know. For disclosure purposes……I have been in the Reverse Mortgage business for over 2 years and I am a Reverse Mortgage Consultant for EverBank Reverse Mortgage. Also Federal law requires that the homeowner MUST remain on title, thus maintaining ownership of the home.

Regards,

Stephen

Sandra asks…

WHY VARIOUS CONDOS IN PUERTO RICO ARE OUT OF REVERSE MORTGAGE TRANSACTIONS?

I am 64 years old, i have an apartment that not cualifian to a Rverse Morgage transaction.

admin answers:

You might not have enough equity (money) in your home.
They are getting much more strict.

Did you know that a reverse mortage is one of the top 10 worst financial mistakes a person can make?
If you ever decide to move out, you will have nothing – absolutely nada to your name.
You may want to move out around age 80 if you fall and break a hip and can no loger move around to cut grass or drive around. Chances are VERY slim you will stay in your home forever.
Plus reverse mortgages are super, incredible expensive.

Why not sell your home, and move into a very small apartment instead.
That way you will have plenty of cash that you can retire more comfortably on.
Talk to an investment company like Charles Schwab or Fidelity and ask them about CD annuities.
They pay out monthly into your checking account and are super low cost.
/

Laura asks…

Can you sell a reverse mortgage and still have your name on the loan?

Can the title be in someone else’s name? Some retired lady, wants me to give her $30K and I keep paying her mortgage of $850. It’s a good price for the area, but can it be done? Is there anything I should do (besides leaving) to protect myself, I don’t have an agent or anything, should I get a lawyer? Please answer any and all questions you can!

Thanks

admin answers:

No. If she has a reverse mortgage, she gets paid by the mortgage company and she does not make payments on the mortgage at all. She would then be getting paid by the mortgage company from the reverse mortgage, collecting money from you and you would be giving her 30k up front that she would be getting. If you are seriously interested in this home, I strongly recommend you retain an attorney to help you. You can probably get an attorney to help you out for as little as a couple hundred dollars. Once ownership interest in a home changes at all for a person with a reverse mortgage they have to immediately notify the lender at which time. Wells Fargo specializes and is an industry leader when it comes to Reverse Mortgages. Contact someone at Wells Fargo and explain the exact situation and see what they think if you want to save the attorney fee.

Michael asks…

What problems can I encounter with a reverse mortgage.?

I need repairs to my home, which I intend to stay here. But I cannot afford the expense at this time.

admin answers:

This is an excerpt from Smart Money.

“The problem with reverse mortgages? First, they don’t come cheap. There are origination fees of up to $6,000 on a Fannie Mae loan, for example, and closing costs as high as $12,000 on a $150,000 loan. Also, your folks will face a lengthy application process that includes, among other things, mandatory counseling. Diana E. Watkins, a professor in Santa Clarita, Calif., had to wade through streams of paperwork to help her mother,

Esther Ormston Sell, pull $135,000 from her home last year. Then, on the day of the signing, they couldn’t close because Sell had no picture ID (she had never worked or driven a car). “The banker told me that this is one of the biggest problems with women of my mother’s generation,” says Watkins, whose mom’s attorney had to vouch for her identity.

You’ll also have to use good judgment when considering a reverse mortgage. Given the costs of the loan, it is not a prudent way to cover short-term cash-flow needs. And sometimes it simply makes more sense to sell the house. For example, if your parent is diagnosed with a terminal illness and has only a couple of years to live, selling the house would provide more cash than a reverse mortgage, says Tom Scabareti, vice president at Financial Freedom. ”

This one is another informative one: http://itsjustmoney.blogs.com/its_just_money/2006/08/reverse_mortgag.html

Donna asks…

is there a minimum loan amount in a reverse mortgage?

My dad wants to take out a lump sum of like 4 grand or 5 grand maybe 10 grand at most. We own the house, I want to talk him out of it, this was one of his questions. Also if you can supply me with a whole bunch of really good reasons why this is a bad idea, that would be great. Thank you!

admin answers:

He wants a home equity loan, not a reverse mortgage.

In a reverse mortgage the bank basically buys the home from you with monthly payments. They do not just give you some money and not expect it back.

Because he wants so little a personal loan would be easier then a second mortgage.

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Your Questions About Reverse Mortgage

Lisa asks…

Is it a good idea to take reverse mortgage?

My mum and dad are going to retire in 5 five years and the superannuation is not enough to have a good pension so is it a good idea to take reverse mortgage on our family home hence they can live there retirement years to the full

admin answers:

Your parents are still young. They could easily out live their equity and end up loosing their home. If they had retired 10 years ago this would be an OK idea, but considering their age this could be a disaster.

Joseph asks…

My mother and I are both on the deed to our house. She is 90. Can we still apply for a reverse mortgage?

I am 48. Does my name being on the deed prevent us from applying for the reverse mortgage?

admin answers:

Hi Bobby,

You have to love these open forums….sometimes you get everything but the answer to your question.

The answer to your question is YES. What would happen is you can still stay on title and Mom would be given a “Life Estate”. What this means is Mom retains all her legal rights to the property and at her demise the house automatically goes to you, bypassing probate, and you get the house at what is known as the stepped up value. What that means is you get the house at the current market value instead of what Mom paid for it. The benefit here is that you will not have exposure to Capitol Gains taxes.

This is a very simple procedure, and one that is very common in situations such as yours. The Lawyer simply writes up a Life Estate, you and Mom sign, and it gets recorded along with the Reverse Mortgage.

Bobby for disclosure purposes….I work for EverBank Reverse Mortgage…a Nationwide Reverse Mortgage Bank, and all we do is Reverse Mortgages. I am also the Producer/Host of a daily radio program in the Boston Market called Senior Solutions Radio. If you have any other questions, or if you would like me to assist you and Mom in the Reverse Mortgage, simply let me know. Thank you and I hope this helps.

Regards,
Stephen Greenberg

Jenny asks…

can we negotiate a different payoff for a reverse mortgage?

My father passed away recently. He had a reverse mortgage. we received a letter from the rev. mortgage company telling us the final amount due to pay off the loan. Is it possible to negotiate a lesser amount for the payoff? They charged outrageous fees on the loan and I don’t feel they deserve the payoff amount. The house has already been sold to new owners. If we tell the mortgage company we are not paying, what is their recourse?

admin answers:

When the sale closes, the title company will cut a check for the payoff. You’ll never see the proceeds, except for whatever remains after the payoff. The lien will not be released until the loan is satisfied. The lender’s recourse is to foreclose on the house. You are the one without recourse. If you never settle the loan, the lender will take care of things himself, and you won’t even get the remainder of the proceeds.

My company doesn’t negotiate payoffs on reverse mortgages. You may think the fees are outrageous, but it wasn’t your mortgage. The fees were disclosed before the application was even taken, and there was counseling by an impartial third party to make sure your father knew what he was getting. Many of the fees have nothing to do with the lender, like the FHA mortgage insurance. In fact the origination fee is the only thing that goes to the lender.

Your father lived in the house for some number of years without having to make a payment or maybe even getting a supplement to his income. The house is probably worth less today than it was when he got the reverse. Who are you to say the lender doesn’t deserve what your father agreed to pay? If you think the lender tricked him or wasn’t fair with him, maybe you should have been watching out for him then.

This is not an inexpensive loan, but it allowed your father to live in his home. If he didn’t need the loan, he should not have gotten it. Without that mortgage insurance, no lender would consider assuming the risk for this type of loan.

Now that my ire has subsided, I’ll tell you what to do. Call the servicing department and ask them. When they tell you no, try short sale. But you are not a party to the loan and you have no standing to negotiate. The estate owes the lender the money, and lender will get it.

Maria asks…

i have a reverse mortgage on our property, can i still file for bankrupcty?

we went into a reverse mortgage program,and our finances have gotten worse,need to know if we can file bankruptcy and still keep our property, please help.

admin answers:

No. A reverse mortgage usually means they own your house and you are only paying interest, no principal… If you can no longer pay, you will lose it.

Lizzie asks…

Do I lose my home with a reverse mortgage ?

Basically, how does a reverse mortgage work ?

admin answers:

Hello,

No, you will not lose your house.

Here is a short definition of reverse mortgage:
A reverse mortgage (or lifetime mortgage) is a loan available to seniors, and is used to release the home equity in the property as one lump sum or multiple payments. The homeowner’s obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves (e.g., into aged care).

So you will not lose your house till you die.

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Your Questions About Reverse Mortgage Lenders

William asks…

Question about reverse mortgage……?

I’m trying to find out some helpful information for my parents. They are considering a reverse mortgage, but so far my Mom has only spoke with one lender……We live in SC, and the last time they had their house appraised it was for $91,500. or somewhere around that amount…..The lady she spoke to on the phone today told her that if her house is appraised at only 91500 she will only get around $60,000. and that is before the closing cost and other fees, which all that added up to be around $14,000. Does this sound right? We were thinking that she should be able to get more than that…..If anyone has any experience in this, any advice would be appreciated. I’ve found a list on the Gov. website for hud approved reverse mortgage lenders…..Maybe she should call around for the best deal? Thanks guys and I hope everyone had a blessed Christmas!

oh yea, and if it helps any, my parents don’t have a current mortgage. They owe nothing.

God bless……

admin answers:

This is actually pretty good, they usually go to about 60% of the value.

There will not be ANY of these that will pay your mother a fair market value. They make their profit on the back end, with the equity instead of interest.

If your parents have other options they should go with those, this one is not a good deal, no reverse mortgages are.

Michael asks…

I want to know where to get a list of reverse mortgage lender in Minneapolis area with address, name, phone et

admin answers:

Hello Frankie,

Here’s where you want to go…..www.reversemortgage.org . This is the website for the National Reverse Mortgage Lenders Association (NRMLA). You will see on the left side of the page a link to ” Locate a Lender” Click on that, then use the drop down arrow to get your state, and a list of lenders with names and phones will pop up. You will also find some good information there also. For disclosure purposes, I have been in the Reverse Mortgage business for over 2 years and I’m a Reverse Mortgage Consultant for EverBank Reverse Mortgage…a National Bank that only does Reverse Mortgages. If I may suggest you call Larissa Morrell, you will find her to be a fantastic source and will guide you thru the Reverse Mortgage process.

Regards,

Stephen Greenberg
Producer/Host
Senior Solutions Radio
AM 1060 WBIX

Donna asks…

ron a reverse mortgage can the lender sell the home to a family member for more than an outside non relative?

for a lesser amount after the owners die?

admin answers:

Yes, they can sell the property to anyone they want for whatever offer they decide is the best.

John asks…

How much does reverse mortgage counseling cost?

I was reading a site called www.reversemortgageabcs.com that talked extensively about the need for reverse mortgage counseling and even where I could find a counselor. However, it did not mention how much it would cost nor did it mention whether I would have to pay for it (or if the lender would) if I decide not to proceed with the reverse mortgage.

admin answers:

The borrower doesn’t pay for it at all. The lender pays. On most, if not all, reverse mortgages, the borrower doesn’t pay anything if the loan doesn’t close. Say your appraisal is too low. You don’t pay any fees.

Look at the AARP website. They have a lot of details there. Bank of America’s website is very good. They have a calculator to give you an idea how much you might be able to get.

Susan asks…

With a reverse mortgage if owner stays in house and ends up with excessive equity does lender go after estate?

With a reverse mortgage, If owner stays in house for longer than expected and with interest, etc. ends up “upside down” — in other words, more is owed on the house than it’s current value, (of course, after the death of the owner), and after the bank sells the house can it then come to the estate to make up the difference?

admin answers:

Reverse mortgages are tricky and prone to lots of misinformation. But do not worry in this case. First, the bank doesn’t own the house so they don’t get to sell it. The heirs have a year to refinance or sell.

If the proceeds are not enough to satisfy the loan, the lender (or their insurance on the loan) absorbs the difference. This is a “non recourse rule” which entitles the lender to only the market value of the home and nothing more.

The other assets are safe.

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