Hi Deborah, Can I qualify for a reverse mortgage? I am single and 64 years old. My home is worth about $310,000 and I owe $107,000, with another 11 years to pay on it. I do have about $150,000 in a retirement account. I recently lost my job, which covered my house payment and I don’t want to take money out of my retirement account yet. Sincerely, Margret.
I’m so sorry to hear about your job loss. Based upon the information you’ve given me, an FHA reverse mortgage could be a solution for you. Though income and credit scores are not an issue, there are some underwriting guidelines to consider. Providing there is nothing of that nature to be concerned with and that you are living in an FHA eligible property it would be worth your time to look into the HECM reverse mortgage.
A big part of the process of getting a reverse mortgage is educating yourself on the product. How it works, what it costs, and which reverse to get. If you were to get a reverse mortgage, you’d want to get the right one for you. Sometimes, it’s not the one you initially think it should be.
Part of my job is to meet with my clients face to face to educate them about the product and its variations. Depending upon their location, I may meet with them over the phone or even Skype (more and more of my clients Skype - I love that!) During that meeting we discuss their plans for the future and for their home. We will review all of the reverse mortgage options, and go over each of the closing costs in detail. After meeting with the homeowners, they may decide to take the next step, Counseling - or continue to work on educating themselves on the product, do some competitive shopping (highly recommended).
Though you and I haven’t had a face to face meeting here are some possible scenarios that might work for you.
#1 - The HECM Saver Adjustable - If your home appraised for $310,000, this reverse mortgage loan would payoff your $107,000 mortgage AND provide you (after costs) with a growing line of credit of just over $49,000. Without a mortgage payment you will have effectively increased your income, and you have an additional $49,000 available for emergencies. The HECM Saver is a lower cost reverse mortgage with a smaller loan to value.
#2 - The HECM Standard Adjustable, another option would provide (after costs) a growing line of credit of $74,000 and payoff your existing mortgage. The HECM Standard is a higher cost, larger loan amount reverse mortgage.
Counseling: Every reverse mortgage applicant must received HECM Reverse Mortgage Counseling through a HUD approved counseling agency. They will go over your budget with you to help you to determine the suitability of a reverse mortgage for your situation. They will review the reverse mortgage product with you and help you to understand it - all without any pressure to buy.
Also, take some time to review the different posts and links in my blog here. Lots of good information to learn and ponder.
I would love to talk with you more in person to brainstorm about your different options. Looking forward to hearing from you.
By Deborah Nance
Your Local Southern California Reverse Mortgage Professional
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iReverse Home Loans, LLC, NMLS#810502 originates reverse mortgages in Alabama, Alaska, Arizona (MB-0919584), California, Colorado, Connecticut, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon (ML-5378), Pennsylvania, South Dakota, Tennessee, Texas, Utah, Vermont (1164-MB), Virginia, Washington and Wisconsin.
Important Information: Reverse Mortgages are neither "endorsed" nor "approved" by the Federal Government. The FHA (Federal Housing Administration) provides certain insurance benefits for lenders and borrowers in connection with the lender’s HECM loans; the FHA does not make or originate loans. The owner(s) retain title to the property that is the subject of the reverse mortgage until the person sells or transfers the property and is therefore responsible for paying property taxes, insurance, maintenance and related taxes. Failing to pay these amounts or failure to maintain the condition of your property may cause the reverse mortgage loan to become due immediately. A reverse mortgage is a complex loan secured by your home. Whether such mortgage makes sense for you depends on your financial situation and needs. For these reasons, we strongly recommend that you consult with a qualified independent housing counselor, family members and other trusted advisers before making this decision. This website is not from HUD or FHA and was not approved by HUD or any government agency.