FAQ #1 – Am I eligible for a reverse mortgage?
To qualify for a Reverse Mortgage, you must be at least 62-years-old if you are single. In the case of a married couple, only one spouse must be 62-years-old.
You must live in your home as primary residence. (You can still own vacation homes.) You must have enough equity in your home to be able to pay off your home with the proceeds from a Reverse Mortgage.
Eligibility depends on an FHA calculation that considers:
- Age of the homeowners
- Property’s value
- Balance on existing mortgages
- Current interest rate
- Max lending limit
- A formula regulated by FHA
Your primary residence must be a single-family home, qualified condominium, townhouse or double-wide manufactured home.
The health of the homeowners does not affect Reverse Mortgage eligibility.
The Reverse Mortgage is an excellent financial planning tool that is used by homeowners from all walks of life to enhance their retirement years. While some need a Reverse Mortgage more than others, the growing popularity of this product is evidence of its benefit in a wide array of financial circumstances.
If you think you or a loved one qualifies, and are interested in finding out more about what a Reverse Mortgage could do for you, call our office, and we’ll help you sort everything out. You can reach us toll free at: 877-299-5500, or directly at: 719-266-5500. Steve will talk with you personally!
FAQ #2
Will the bank take my home?
Generally not. You maintain ownership as long as you follow the rules. When the last homeowner permanently leaves the home, ownership does not go to the bank, but will go to whomever you leave it to in your will. They will then have 6 to 12 months to pay off the Reverse Mortgage.
FAQ #3
When does a reverse mortgage need to be paid off?
The Reverse Mortgage needs to be paid off when you sell your property, or you no longer occupy your home as your primary residence for 12 months or longer, or if you do not pay property taxes or keep your home insured.
FAQ #4 – Must my home be paid off to qualify for a reverse mortgage?
No. Some people think their house must be paid off before they can qualify for a Reverse Mortgage. Nothing is farther from the truth.
Seniors with an outstanding first mortgage or other debt on their home may still qualify for a reverse mortgage. The proceeds of the Reverse Mortgage, though, must first be used to pay off those debts.
Many seniors are finding they can use a Reverse Mortgage to pay off their existing mortgage, or to pay off other debt. The important thing is how much equity they have in their home.
For many seniors, the equity in their home is their largest single asset, yet it is unavailable to use unless they take out a normal mortgage loan. But a traditional loan requires monthly payments.
A Reverse Mortgage, on the other hand, taps into home equity without creating new monthly payments, and without requiring the money to be paid back during a person’s lifetime. Instead of making payments, the cash flow is reversed, and you receive payments or cash from the bank. Thus the title “Reverse Mortgage”.
Your home does not need to be paid off.
To learn more about whether you qualify and what the benefits to you may be, call our office at: (719) 266-5500. Steve will talk to you personally!
FAQ #5
What does the lender expect from me?
You must maintain the property in reasonably good condition. You must pay the property taxes and the homeowners insurance and homeowner's association dues, if any. And of course, the lender expects you to continue to occupy the property.
You must also avoid loan maturity event triggers such as: donation of the home, taking out other financing on the home, bankruptcy, eminent domain, and abandonment.
FAQ #6
I currently hold title in a Trust. Can I keep it that way?
Yes. Let your loan officer know about the trust up front, because it has to be approved by the lender and title company. The sooner the better. Most trusts are prepared with lenders with their requirements in mind, so they are not a problem.
FAQ #7 – Why do I need counseling before I can get a reverse mortgage?
Counseling is a very important part of the consumer protections required by law. The purpose of counseling is for you to meet with an independent third party who can review your circumstances and recommend whether a Reverse Mortgage is the best option for you. They also ensure that all borrowers are mentally competent.
You can receive counseling in person or over the phone from a HUD-approved counseling agency. Steve will provide you with a list of at least nine counseling agencies to choose from.
Since 2010, HUD has required counselors to pass an exam before they are eligible to meet with perspective borrowers. They must also meet continuing education requirements, so that they are kept informed about industry developments and product changes. Your counselor will follow a strict set of protocols that dictate what must be covered during the counseling session.
FAQ #8
Will my heirs receive an inheritance?
Maybe. After the balance of your reverse mortgage is paid off, all remaining equity, if any, will go to your heirs. The amount of equity remaining when you pass will depend on how much money you draw from your home, how long you stay in your home, home appreciation, and interest rates (if you have a variable interest rate loan).
FAQ #9
What should I do now?
Call Steve today:
(719) 266-5500
or email him: steve@mymortgageguysteve.com
