Reverse Mortgage Information

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Riverside Reverse Mortgages

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The Most Common Questions



FHA's Reverse Mortgage Program, the Home Equity Conversion Mortgage (aka HECM’s) really are a safe, secure loan. In the course of my business I often run across some common misconceptions.  I’d like to take this opportunity to educate the reader about some of the most common questions and myths about this loan.


  • How much can I borrow?  Loan amounts are determined by three factors:
    1. Age of the youngest borrower (the older you are the more you can borrow)
    2. Home value (the higher the home value, the more you can borrow with a cap on calculations at $625,500)
    3. Current interest rates.
  • Will the bank own my home?   No. You remain the owner of your home and can stay as long as you wish, as long as you pay property taxes, keep the home insured and maintain the home.  When your home is sold, the reverse mortgage is repaid (along with accrued interest and anyfees) and any remaining equity goes to you or your heirs.
  • Can I qualify for a reverse mortgage if I already have a home loan (or two)? Absolutely, IF you qualify for enough reverse mortgage funds to pay off your existing mortgage(s) or are willing to provide any shortage.  I have had homeowners willing and able to bring funds to closing in order to obtain the benefit of no more mortgage payments!  Bye bye house payment!
  • Will my income or credit score affect my eligibility for a reverse mortgage? Not really.  Because you don't make monthly payments on a reverse, your income and credit score are NOT required. HOWEVER, you must not have a recent foreclosure or any defaulted federal debts or have a non-discharged bankruptcy.
  • What if I outlive the Reverse Mortgage? Not to worry, you cannot outlive a reverse mortgage.  The actual due date is 150 years from the date of the youngest borrower OR when the last remaining borrower no longer lives permanently in the home. No matter if you run out of equity, use all the available RM funds, or become “underwater” on the debt, owing more than value.  Your obligation remains the same - Live in the home, maintain the home, keep the property taxes and insurance current.
HECM Reverse mortgage are a safe, secure FHA Insured mortgage that allows a senior to tap into their home equity without the burden of monthly mortgage payments, ever. The loan proceeds may be taken as lump sum, tenure payments, line of credit, term payments or any combination. Fixed rate HECM loans are available, but only have the lump sum disbursment option.

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By Deborah Nance

NMLS#202003

Your Local Southern California Reverse Mortgage Professional

How Much Do You Qualify For?

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Equal Housing Lender

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.

Comment balloon 6 commentsDeborah Nance • August 23 2011 08:55PM

Comments

Deborah ~ thanks for sharing some insight into Reverse Mortgages - a subject many of us should be considering.

Posted by Kristal Wilson, We Like 'Em New ~ New Home Specialist (Strategic Sales and Marketing) over 7 years ago

Thanks Kristal!  Appreciate the comments! Check out my last post

Posted by Deborah Nance, Southern California , Reverse Mortgage Specialist (Orange County, Corona, Riverside, Los Angeles) over 7 years ago

Hi Deborah,

Thanks for the good info on the reverse mortgages. Now a question, has the program changed somewhat recently, meaning this year? I sort of though with declining values that it could be a possibility the loan amounts have changed. Is that so?

Posted by Lynda Eisenmann, Broker-Owner,CRS,CDPE,GRI,SRES, Brea,CA, Orange Co (Preferred Home Brokers) over 7 years ago

Hi Lynda!  We were expecting the lending limit to revert back to $417,000.00 for HECM's, but it was extended through December 31, 2011, so we have a little reprieve there.  The funding for counseling services was pulled from next years budget so after September, borrowers won't be likely to find any HECM Counseling for free.  However, most agencies will allow the borrower to authorize payment for the counseling from the loan proceeds.

If and when the limit does revert back to $417,000 it will definitely have an effect on senior homeowners in higher value areas like OC, and LA - limiting their access to equity.  

Posted by Deborah Nance, Southern California , Reverse Mortgage Specialist (Orange County, Corona, Riverside, Los Angeles) over 7 years ago

Great information on Reverse Mortgage. I wanted further information on this topic. Thank you for summing it up for me.

Posted by Niema Thomas, CDPE, SFR, MBA (Century 21 Beachside) about 7 years ago

Hi Niema,  Thank you for the comment and I'm glad you found the information helpful.  Remember, your senior homebuyers can finance their home purchase with a reverse mortgage too! 

Posted by Deborah Nance, Southern California , Reverse Mortgage Specialist (Orange County, Corona, Riverside, Los Angeles) about 7 years ago

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