Your Questions About Reverse Mortgage

George asks…

In California, if property is held in a trust, can you do a reverse mortgage?

If we put our property in a trust, (my wife is not yet 62) can we do a reverse mortgage and if so, does she have to sell the house when I die?

admin answers:

Hi,
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William asks…

Will my home be foreclosed on (reverse mortgage)? What is the Procedure? Do I have any recourse?

I have been living in another state with my new wife. I do not want to give up my house here in OH which has a reverse mortgage. One of the requirements of the mortgage is that you must live in your home most of the year or you could be foreclosed on. Has anyone had any experience ]with this situation?

admin answers:

The FHA requires (let me stress that: REQUIRES) that at least one of the owners is living in the house. If you are the only owner, that means you. This was made clear when you got the reverse mortgage. If you are gone for 12 consecutive months, your mortgage is due. It’s fine if you spend 6 months in Florida and 6 months in Michigan, but if you’re gone 12 consecutive months, it’s time to pay the loan. This goes for a long term stay in a nursing home or if you move in with your daughterbecause the purpose of the loan to to help people stay in their homes.

You do have options but you might not like them:

1. Go home and live there.
2. Sell it and pay off the loan.
3. Refinance the loan into a regular forward loan.
4. Get foreclosed on.

If you owe more than the value of the house and don’t plan to live there, you might as well let it go. Even if the lender doesn’t know yet, the clock has already been ticking since that 12th month. With a regular mortgage if you owe too much and still make the payments, everything is fine. This isn’t an option here. Live there or pay the mortgage off.

If you owe less than the value and don’t want to live there, sell it. At least you’ll get some money out of it.

The bottom line is that we have no leeway in this, no wiggle room, no “how do I get around” answers. These are FHA requirements and the individual lender can’t change them.

Carol asks…

Does reverse mortgage give away your home?

My mother recently got a letter about reverse mortgage of her house. (She’s not far off of retirement age). In the letter, it says that basically, they would take over her mortgage, and possibly pay a stipend, but that when she passes, the house goes to her heirs (if she has any) and they would be responsible for paying back the amount paid (with interest, I’m sure). However, I have also heard from another source that the company takes the home when she passes.
Does anybody know if this is true?

admin answers:

It’s not necessarily a Bad Deal, and the lender does not necessarily take the house.

Basically, in a reverse mortgage, your monthly payments are set to be lower than the amount needed to pay off the loan. As a result, the amount you owe either stays the same or actually goes up. (It will go up if your payments don’t include the full amount of interest falling due.)

These programs are required to meet certain Federal standards and laws in order to help prevent fraud.

A reverse mortgage is useful for someone who needs a home but can’t afford the high payments of the standard, fixed-rate, 20 or 30-year mortgage plans (“conventional mortgage”). When he sells the house, he will have to then pay off the FULL amount of the loan and he might not have any equity in the house–but usually, house values go up in the long run, so he might earn some equity that way.

There are special programs, regulated by Federal law, aimed at the elderly. Under these programs, the elderly can borrow against the equity in their house and not make ANY payments at all as long as they own the house. So the mortgage will consist of both the borrowed principal, and the unpaid interest on the amount borrowed. If the owner is elderly and on a small, fixed income, this can be a very helpful program, because it’s a way for that person to have more income but not have higher expenses. If the house is sold, or if the owner dies and the heirs inherit the house, then the accumulated principal and the accumulated interest must be paid off then–but only then.

This particular kind of program, aimed at the elderly, is called the “Home Equity Conversion Mortgage” (HECM), and is sponsored by Fannie Mae. A list of approved lenders is availble by calling 1-800-7FANNIE.

It means the heirs inherit less. But so what? It allows the elderly owner to have a better life than a small fixed income would have allowed.

The Federal Deposit Insurance Corp. (FDIC) has an excellent article in its Summer, 2002 “Consumer News” about “High Cost Predatory Home Loans: How to Avoid the Traps” which may help you on your concerns. Go to: www.fdic.gov/consumers/consumer/news

Sandy asks…

We own home in adult community paid cash 120000 for home five years ago. Can’t get reverse mortgage because?

home is considered track home in trailer park. We pay ground rent and taxes yearly. Is there a bank that would give us a reverse mortgage under these conditions. Help in Pennsylvania.

admin answers:

Unlikely. You have a 2-part question. You say you have a track home and you pay ground rent.

Depending on how you define track home, a reverse mortgage is very specific on loans on manufactured homes, i.e. It must be built after 1976, still have its FHA plates affixed and must be attached to the ground permanently, among other things. If your home has all 3, the home may be eligible. However, part 2 comes in.

You also say you pay taxes yearly, but I am guessing you are referring to income taxes – not property taxes since you are renting the land. Reverse mortgages do not look at income or credit scores in order to qualify. Typically, Reverse mortgages require you own the land but they can be done on leasehold property wherein you do not own the land, but you must have a lease good through the youngest borrower’s 150th birthday (even assuming they have long gone) or good for 99 years, as is common in places like Hawaii. I somehow doubt that is what you have in PA where you are most likely on a month to month or an annual lease.

As a suggestion, you may be able to get some other kind of loan on the home like they do for cars as collateral (hard money), but it wouldn’t be a reverse mortgage and you would want to read the fine print very very very well. These loans are typically very short term with high interest and usually used as temporary bridge loans or for desperate times.

I have one more suggestion. I am assuming your home is no longer worth $120,000, since you would have bought it in 2006 during the real estate bubble. Would you be willing to move and upgrade? Assuming you are over 62 years old (mandatory for a reverse mortgage), you may want to consider selling what you have, even if at a loss, and using that as a down payment to BUY another primary residence using a reverse mortgage. For the same reason your current home is not worth what it once was, you can probably now upgrade to a better home, to include the land, for probably what you paid in 2006 since the better homes have also gone down in value. Since 2009, FHA allows a senior to purchase a primary residence using a reverse mortgage, but you will need a sizeable down payment (how much depends on your age). Hopefully, the proceeds from the sale of your track home would give you that. However, the good news is that once you get the reverse mortgage and purchase the new house, you will not have any mortgage payments for as long as it is your primary residence. But, since you now own home AND land, you will now have to pay property taxes and continue to pay homeowners insurance. Hope this makes sense.

Joseph asks…

I’m 63 yrs old intersted about reverse mortgage. What is the advancetage and disadvancetage in my part?

This reverse mortgage is for me or not?

admin answers:

==> A Reverse Mortgage may be right for you if:

you have a regular need for additional living funds;

you live on a fixed income, and your only asset is your home equity;

you do not plan to leave your home to your children or others who will inherit from you.

==> You might want to consider alternatives to a reverse mortgage if you want to leave your home, free and clear, to your children or others who will inherit from you; or you have another, less costly means to reach your financial goal. A reverse mortgage can be an expensive way to borrow money.

==> Advantages:
A reverse mortgage can help you maintain your financial independence and anadequate standard of living.

It allows you to remain in your home and retain ownership.

The money you receive from a Reverse Mortgage is tax-free and doesn’t affect social security or medicare benefits.

==> Disadvantages:

This is more costly to set up than other types of loans;

Although the proceeds are tax-free, a reverse mortgage may impact upon your eligibility for certain “need based” public benefits such as Medicaid,Supplemental Social Security Income (SSI) and MediCal benefits.

In the event of your death or your spouse’s death, if your heirs are unable to pay back the loan when it becomes due, your family may lose the house entirely and it’ll likely be sold on the open market.

==> You should ask yourself:

How much money do I need?

Is there a way to meet my needs that does not involve getting a Reverse Mortgage?

Will a Reverse Mortgage make my partner or me ineligible for any governmentbenefits, currently or in the future?

Do I qualify for this Reverse Mortgage?

How much can I borrow through a particular Reverse Mortgage product?

How much will it cost me in fees and interest to borrow this money even if Idon’t have any “out of pocket” expenses?

Will I have to sell my house before I die to pay off this Reverse Mortgage?

What happens if I die, and my partner is still alive and living in the home; will he or she have to leave or pay the loan off?

What happens if I have to go to a nursing home; will the loan become due and payable?

What will I or my heirs have left after the loan is paid off?

Are there any early-repayment penalties?

What are my obligations under the Reverse Mortgage, such as home maintenance, property taxes and insurance?

==> These agencies provide free, local Reverse Mortgage counseling and areapproved to give mortgage counseling by the federal Department of Housing andUrban Development (HUD).

U.S. Department of Housing and Urban
Development (HUD): toll free
(888) 466-3487.

Federal Trade Commission (FTC): write to obtain a free brochure, “Reverse Mortgages Fast Facts.” Consumer Response Center, FTC
600 Pennsylvania Ave. N.W.
Washington, DC 20580
Or call, (202) FTC-HELP

American Association of Retired Persons (AARP): write to obtain a free guideon Reverse Mortgage borrowing:
Home Made Money
AARP Home Equity Information Center,
601 E. Street N.W.
Washington, DC 20049

Fannie Mae: Call (800) 732-6643 for a free guide, “Money from Home: A Consumers Guide to Reverse Mortgage Options.”

National Center on Home Equity Conversion (NCHEC) offers a current list of all public and private sector Reverse Mortgage lenders. Send $1.00 and a self-addressed, stamped, envelope to Reverse Mortgage Locator, Suite 115, 7373147th Street, Apple Valley, MN 55124. Also available, “Your New Retirement Nest Egg: A Consumer Guide to the New Reverse Mortgages,” call (800) 247-6553 for information.

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Your Questions About Reverse Mortgage

David asks…

What are the pros and cons of an elderly couple doing a reverse mortgage?

We are in our mid sixties. Would it be advantageous to do a reverse mortgage?

admin answers:

Mid-sixties is a little on the young side. The optimal age for a reverse mortgage is 74-76.

The key is to remain in your home as long as possible to amortize the high upfront costs. If the loan terminates (due to death, moveout, etc) within 5-7 years, you’ll have paid a very high price. This is the biggest disadvantage. A recent HUD study shows that most HECM (home equity conversion mortgages) reverse mortgages are terminated within seven years.

The big advantage of reverse mortgages is that in the right circumstances you can access home equity for the rest of your life to help with retirement costs and not have to worry about making monthly loan repayments.

Here’s a summary of what several well-known personal finance experts think about reverse mortgages which may be useful to you:

http://www.reverse-mortgage-information.org/what-experts-are-saying-about-reverse-mortgages/

Cheers

John asks…

How much equity does someone have to have in their home in order to qualify for a reverse mortgage?

My elderly family member owns a home (paid it off years ago) but now has a line of credit against the house for 100K. I am concerned that this member of my family is running out of money and will need a reverse mortgage in the next year or two as they will require an in home health care worker. I would guesstimate the value of the home to be 275K to 300K right now. Does anyone know if a reverse mortgage would be possible for her?

admin answers:

Hello – Please go to this website:

http://www.hud.gov/offices/hsg/sfh/hecm/hecmhome.cfm

This is the official site by the US Department of Housing and Urban Development. Better known as HUD.

There is also information by state. There is another web link from the site and it is: http://www.reverse.org/

Good luck to you and for caring about your loved ones.

Linda asks…

Can I cancel a reverse mortgage if I unexpectedly come into some money?

Let’s say I’m 3 years into it, and poof, a bunch of money lands in my lap and I no longer want or need the reverse mortgage. Can I buy my own house back?

admin answers:

Reverse mortgages may seem like the perfect financial solution for some aging ….. You may qualify to cancel private mortgage insurance and save hundreds, …. Insurance can help you keep your home if you’re unexpectedly unemployed. … If not, put that money into an emergency savings account to help you weather …

Michael asks…

what happens to a reverse mortgage after the person passes away. How does that work?

I am trying to see what happens to a reverse mortgage after the person passes away

admin answers:

The property is sold by the estate and the balance owed on the mortgage is paid from the proceeds of sale.

Chris asks…

How do I save my house from a reverse mortgage?

my grandmother had a reverse mortgage on her house, when she passed it became due. Now they want me to pay back more than what the house is worth.

admin answers:

Her estate needs to repay the loan. Period, there is no other way around it. If the loan is not repaid the bank will foreclose on the home and sue the estate for any deficit amount. They gave yoru grandmother cash money, now it is time to repay that cash.

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Your Questions About Reverse Mortgage Lenders

Robert asks…

IndyMac owns Financial Freedom. Is it still safe to get a reverse mortgage with Financial Freedom?

We are in the process of signing papers with Financial Freedom but I worry about them since the government seized their parent company IndyMac Bank. They say they can still make loans, but I worry if they will be able to continue the monthly payments. If I went with them, could I transfer to another lender at a later time?

admin answers:

As long as you are going with the HECM product you have nothing to worry about. The beauty of the HECM reverse mortgage is that it is government insured. This means that if something were to ever happen to Financial Freedom the government transfers the loan and not only guarantees your payments but they also guarantee that you will get them on time. The government did a good job covering all possibilities with this one

Carol asks…

can my step father put me on the reverse mortgage even tho im not his blood son?

Im told he had to add my step sister, but this just doesnt seem right. Apparently the lender required him to add her and not me because I am just his step son.

admin answers:

I don’t understand this question at all, you should ask it on a subject about mortgages or banks.

Paul asks…

Reverse mortgage HELP PLEASE?

Hey everyone i have a question about reverse mortgage. I will be turning 62 In march and i have been looking into refinancing into a reverse mortgage.. but as many houses out here in California my house has lost value and I Do not have any equity… Can i qualify for one? and does anyone know of a Reliable FHA-approved lenders In So-Cal?

admin answers:

Good day,

I am Richard a private loan lender, i give certified loans to serious minded individuals and company at an interest rate of 5% with total loan repayment allowed weekly monthly or yearly depending on how you can make repayments if interested email me at rj.microfinance@mail.mn .We only offer out in: Dollars,Pounds,Euro and Naira only.Apply with the following details:Name,Address,Cell number,Occupation,Monthly income,Loan amount needed&Duration.

Email: rj.microfinance@mail.mn

Richard asks…

Reverse mortgage, Are rates and fees pretty standard, or should I really shop around?

Im 64 and my mortgage is paid off. I read from one lender that fees could run between $5,000 to $8,000. Is this a competive market or is this what I should expect?
Also, my wife ( co-owner ) is only 60 years old…. What problems will I have with eligibility? Should I just scrap this idea and is there another way to get my equity from my house. I am on social security retirement..with no other income and my wife is unable to work.

admin answers:

Hello –

This is a great question.

Until recently, seniors 62 years of age and older have not had the best choices when it came to getting cash from their homes. Traditional home loans only offered the option of either selling one’s house or borrowing against its equity.

With reverse mortgages coming on the scene, seniors now have some additional cash-flow alternatives. This type of loan allows mature borrowers to convert their home equity into tax-free income without leaving their current home or making mortgage payments – and they do not need an existing income to qualify.

How a Reverse Mortgage Works
Reverse mortgages are probably best understood when
compared side-by-side with traditional home mortgages, otherwise known as “forward” mortgages. The following table shows the differences between the two:

FORWARD MORTGAGE REVERSE MORTGAGE

Uses income to pay debt Uses home equity to get cash or credit

Monthly mortgage payments No payments

Falling debt, rising equity Rising debt, falling equity

Both loans incur debt against your home, and both affect equity, but they do so in different ways. Traditional home mortgages require making monthly payments to a lender. With a Reverse Mortgage, payments are made to you.

What a Reverse Mortgage Involves

Here are some important points to know when considering a reverse mortgage:

Eligibility: To qualify for a reverse mortgage, you must be at least 62 years of age. All owners who are on the title deed must meet this age requirement. You must also have paid off all, or most, of your home mortgage. Lastly, the home you reside in must remain your principal place of residence.

Mandatory Counsel: In order to ensure that homeowners are fully aware of the financial ramifications of obtaining a reverse mortgage, you must undergo counseling with an unbiased third party before completing a loan. HUD and AARP oversee a network of counselors who can provide this service, and it should be offered for either a nominal fee or at no charge.

Tax-Free Income: One of the advantages of a reverse mortgage is that the money you receive will not be taxed. The amount you’ll obtain depends on several factors including the plan you select, the type of cash advances you choose, your age, and the value of your home. Typically, the older you are the larger the loan, as you will have more equity in the house.

Cost: The cost of a reverse mortgage varies considerably from one type to the next. However, you can typically use the money you receive to offset the loan fees. The costs will be added to the loan balance and must be repaid with interest once the loan terminates.

Repayment: Reverse mortgages do not require any payment as long as the borrower(s) remain in the home. Should the borrower(s) pass away, sell the home, or permanently relocate, then the loan would be due in full, along with interest and additional costs. If two borrowers are on the loan and one dies, the loan would not be due since one of them still occupies the home.

Home Equity Conversion Mortgage – The Federally Insured Loan

The most common type of reverse mortgage is the Home Equity Conversion Mortgage, otherwise known as a HECM mortgage. This is the only reverse mortgage program that’s federally insured and backed by the U. S. Department of Housing and Urban Development (HUD). This type of reverse mortgage is popular for a few reasons:

Ability to choose your own interest rate.
You can select one that changes annually or one that changes every month.

You have several payment options.
You may receive monthly loan advances for a fixed term or for as long as you live in the home. You may also choose to receive a line of credit or combine monthly loan advances with a line of credit.
The loan can be used for any purpose.
With a HECM, you don’t have to designate the loan to a specific use; you can apply the funds to anything you choose.

Protection.
This is one of the most attractive features of a HECM. This plan protects you by guaranteeing continued loan advances even if your lender defaults.

Sell or Stay?

The main reason people choose a reverse mortgage is to gain financial independence and maintain an adequate standard of living without leaving their current home. The best way to decide if a reverse mortgage is right for you is to compare it to the other option of selling your house. To do this, ask yourself these three questions:

How much cash can I get by selling my home?

How much will it cost to buy or rent a new place?

Is it worth my moving now, or do I prefer to do something else with the money?

Perhaps you’ll confirm what you knew all along, where you now live is the best place to be.

Darren Meade is affiliated with Victory Lenders, a Christian based company. If you would like to receive a FREE CD containing an interview with Sarah Lyons and John Lucas, the co-authors of Reverse Mortgages for Dummies, please contact Darren at 866-676-4325.

Susan asks…

2 wrong reverse mortgage appraisals: borrower manipulated?

My mom had 2 appraisals while she had her Rev Mort. One completely omitted an entire room, and one listed her flooring as vinyl/carpet instead of wood/tile. Why did the lender loan her money when the appraisals were so wrong? Why elderly mom probably didn’t even look at the small print in them.

How could the lender not know about the missing room? That’s information that anyone can get. Sounds like the lender was being manipulative, Agree?

admin answers:

I can’t help but ask, why were there two appraisals done? Did the first appraisal come in so high that the lender questioned it and required another one? Or did you complain about the low value and fought for a higher amount? It’s not typical.

The other person who answered may be right that the appraiser was lazy; it wouldn’t be the first time; but i prefer to give the benefit of the doubt. It could be that the extra room was built without a permit, and so it could not be officially counted. You didn’t say what kind of a room. As the other person said, a bedroom or bathroom would definitely affect the value; but if it was a small nook, he may have been too lazy to figure it into his drawing, or too in a hurry to go to his next appointment. Unfortunately, some folks try to accept all the jobs they can and then are not able to do them well; vinyl vs wood may or may not have made a difference; i’ve seen appraisers whiz through in 15 minutes and take photos hoping the photos will remind them later of what was in the house when they make their report – and then forget a room or other details.

If you used a broker, or the bank officer had taken the time to go to your mother’s home, they should have had it corrected before it was turned in to underwriting. They are as much at fault. But if she dealt with someone online, out-of-state, or the local bank that doesn’t do house calls, then she may have gotten what she paid for. Customer service is very important in reverse mortgages.

The lenders are many times out of state, and would not have necessarily known the details of your home; that is precisely why they must go by the appraisal, wherein a licensed professional physically looks at the home, and not by county records, which are often times wrong. They would not have known the appraisal was wrong unless someone questioned it, either based on the photos, or by the loan officer.

Reverse mortgages are very conservative, and lenders will usually not give more than around 70% of the loan value, so the lender has a lot of room for error. Not sure why you would call it manipulative. If anything, the lender gave your mother less money than she could have received, because they based it on a smaller and dated home. But as the other person said, even with vinyl and carpet, it is still a good investment. What is more important to the lender is that it is well maintained.

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A Reverse Mortgage For Your Retirement Years

Many older Americans retire each year and have no adequate resources from which to draw funds to pay for medical care or simply to make ends meet. These retirees may have thought they had planned well for their golden years only to find that their savings were not nearly enough. Health care is so costly and most retirees cannot afford the additional costs of home care or residency in a nursing home. In some cases, it may just be having enough money to pay the normal living expenses that keep rising. This is probably why reverse mortgages are growing in popularity.


These reverse mortgages or also known as home equity conversion mortgages are seen as an alternative financial source to be used along with federal programs like Medicare and Medicaid to help pay the escalating costs of medical care. These types of mortgage plans can be used by senior citizens to help pay common monthly expenses as well as health care and even be used to pay for luxuries like vacations or new cars.


The reverse mortgages are backed by the FHA and the HUD and these federally backed mortgage programs are tax free. Although most people who take a reverse mortgage are over sixty-two, the money they receive from it does not affect the amount of their benefits from SSI or Medicare.


The payments on a reverse mortgage are made to the homeowner instead of the homeowner having to make the payments. Reverse mortgages do not have to be repaid until the recipient dies or moves into a nursing home. At that time the home may be sold to recover some of the money. Even if the recipient has been paid payments, which have amounted to more than the value of the home the selling price will not exceed the value of the home. As long as the recipient remains in good health and continues to reside in the house the payments will keep coming to them.


A senior citizen who is looking into the reverse mortgage plan as a way to obtain assistance in their finances after retirement should examine every other option before making a final decision. The reverse mortgage can be a genuine source of relief for someone who is no longer in the workforce and has few other ways to get funds to cover a medical emergency or any other type of sudden need.


A retired person will usually have their home paid for and the equity that is available is what the reverse mortgage is based on. The money, which is paid to them in equal monthly payments, can be used for whatever purpose they need it for. Home health care, prescriptions, doctor bills, or transportation to therapy sessions; all of these are reasons to seek more funding.


The cost of almost everything is increasing on a yearly and sometimes monthly basis, so it is very important to find resources to help finance our daily lives. The amount of income that might have been sufficient ten years ago will definitely not be nearly enough in another two years. The benefits from a reverse mortgage can be used to pay off an existing mortgage, some other loan, or any other outstanding debt. Home improvement projects and improvements in the home for their safety are good reasons to consider a reverse mortgage.

Joe Kenny writes for Glitec.org, offering cheap online mortgages or visit Rebuild.org for mortgages and great refinance quotes

Understanding Reverse Mortgages

Seniors today often live with a great deal of financial uncertainty. The retirement they imagined may not be consistent with the reality they face.

Incomes are flat or declining, living and medical expenses are higher than ever and few income boosting alternatives exist.  Even those who have heard about Reverse Mortgages may be unsure about how they work or what questions to ask. As they search for information, they often turn to their financial institution for guidance and information. By becoming familiar with the product, you can be an even more valuable resource to your clients providing them with income supplementing alternatives to drawing down assets.  

 

What is a Reverse Mortgage?

 

A Reverse Mortgage is a special type of loan that allows a homeowner to convert a portion of the equity in their home into cash they can access. The funds are not taxable to the homeowner and typically don’t interfere with eligibility for Social Security or Medicare benefits. (However, in the federal Supplemental Security Income program, beneficiaries must keep their liquid resources under certain limits.) The customer retains title to the home as well as right to any appreciation in home value when the loan terminates after it is paid off. The loan remains in force until the last titleholder dies, permanently leaves the home or sells the property; the borrower can’t be forced to sell or move by the lender. The loan may be repaid at any time. But unlike a traditional home equity loan or second mortgage, no monthly payments are required. Instead of putting further pressure on an already stretched budget, a Reverse Mortgage can free a senior homeowner of monthly debt obligations.

 

Most Reverse Mortgages today are Home Equity Conversion Mortgages (HECMs) and are FHA-insured and guaranteed. Because HECMs are subject to FHA lending limits, proprietary products have also been developed to help homeowners with properties in excess of the FHA lending limits.  

 

Who qualifies for a Reverse Mortgage?

 

All titleholders must be 62 or older and own a home with some equity. There are no income or credit qualifications. Existing mortgages or liens must be paid off, but are often paid with proceeds from the Reverse. The homeowner must also remain current on insurance and property taxes, but these can also be paid with proceeds from the Reverse.

 

How can a borrower use the money?

 

The funds can be used for any purpose from making ends meet to living retirement dreams.  The top reasons for funds used given typically by borrowers are:

 

Paying off debts, primarily mortgage and credit cards

Home repairs and remodeling

Living expenses

Travel

Health care or long-term care

Easing the financial burden on children

Education

Hobbies

Escalating property taxes

 

The amount available depends on the borrower’s age, the value of the home, interest rates and local FHA lending limits. Older borrowers can receive a higher percentage of their equity than younger borrowers. Funds can be received in a lump sum, a monthly payment or a line of credit.

 

What are the costs?

 

As with most any loan product, there are origination fees and closing costs, but they can be paid from the proceeds of the Reverse Mortgage. HECM loans also have a charge for the FHA’s Mortgage Insurance Premium (MIP). There are usually no out-of-pocket costs to the borrower.

 

What consumer protections are in place?

 

Reverse Mortgages are non-recourse consumer loans – the loan payoff can never exceed the value of the home. To get a Reverse Mortgage, the customer must attend a mandatory counseling session and review their financial situation with a trained, professional Reverse Mortgage counselor. Many of the counselors are certified by the AARP. The counselor ensures that they understand the transaction, the costs and their other alternatives.

 

If you have questions regarding Reverse Mortgages or how they may provide life-changing benefits to your clients, contact MLS Reverse Mortgage at 1-888-888-4834 or www.mlsreversemortgage.com.

 

Fixed Rate Reverse Mortgage

 

MLS Reverse Mortgage

 

Mike Borba (President of MLS Reverse Mortgage) is a broker that has been in the mortgage and real estate field since 1980. Toll Free (888) 888-4834. Visit our website. Read more of our articles online. Read frequently asked reverse mortgage questions.