Reverse Mortgage Info
Why Consider A Reverse Mortgage?
Why might you consider a reverse mortgage for yourself or a loved one?
Reverse mortgages, available to qualifying homeowners ages 62+, generally come with no limits on the use of the funds.
Reverse mortgage funds are first used to pay any liens on the home, including a regular mortgage or home equity loan. In some cases, a portion of proceeds is withheld or set aside to pay taxes and insurance.
Remaining funds often:
Offset day-to-day living expenses.
Cover emergency expenditures, such as car or home repairs.
Pay for medical costs.
Provide for in-home care, allowing the owner to remain in their own home longer.
Sometimes, homeowners use a reverse mortgage just to pay off their existing loan. They do not access the remaining funds at all, but they remove the strain of a monthly mortgage payment* from their budget and increase their cash flow. Some seniors use reverse mortgages to purchase a new home without ever incurring a monthly payment.*
Before entering an agreement, borrowers are required to attend a session with an independent HUD-certified counselor who will fully explain the reverse mortgage process, answer questions and discuss other available options.
Remember that a reverse mortgage is a loan that will be repaid after your death, after you permanently leave your home, or after the sale of your home. Neither you nor your heirs will be responsible for repaying more than the value of your home at sale.
*The homeowner is responsible for paying taxes and insurance and for properly maintaining the home. The home must be used as the homeowner’s primary residence.
If you would like to explore the opportunities a reverse mortgage may present for you or your family, Contact Us. We’re here to help.
Myth vs. Facts
What have you heard about Reverse Mortgages?
The Myth: The lender will own my home.
The Facts: You continue to own your home.
The Myth: My hildren will have to pay the money back
The Facts: Your heirs are not liable for debt on your home. Your estate will pay only the loan amount or the value of your home at sale, whichever is less.
The Myth: My children will not get any funds from my home after I die.
The Facts: If your home sells for more than the loan obligation, your estate is credited with the difference.
The Myth: I'll eventually be evicted.
The Facts: Maintain your property to FHA standards, use if for your primary residence, pay your taxes and insurance, and there is no risk of losing your home.
The Myth: I can only use the money for certain things.
The Facts: Proceeds can be used for any purpose.
The Myth: I have to study, then take a test.
The Facts: Well actually, you will attend a session with a HUD-approved counselor. You will learn all about reverse mortgages and the options available. This is an extra measure of protection for you, no test required.
A Reverse Mortgage can be used to access equity or even to purchase a home. It is not for everyone. You must be at least 62 years old, and just as with any other loan, it's always prudent to review all options to determine what's appropriate for your situation. Generally, there are no credit score requirements to qualify.
A Reverse Mortgage may give you the opportunity to live "on" as well as in your home without having the usual monthly loan payments. For many seniors, reverse mortgages make the difference between enjoying a comfortable retirement in their home and being dependent on others or barely getting by.
If you would like to explore the possibilities for yourself or your loved one today,
Contact Us. We'll be happy to address your questions and concerns.
What's A Reverse Mortgage?
A reverse mortgage is a loan that enables homeowners who are at least 62 years old to convert some of their home equity into cash, a line of credit, or to finance a home purchase with the freedom of no monthly mortgage payments.* The borrowers continue to live in and own their home.
Unlike a traditional home equity loan or home equity line of credit,
a reverse mortgage doesn’t have to be repaid until the last surviving borrower or an eligible Non-Borrowing Spouse, if applicable, no longer lives in the home, or the home is sold. If the borrower does not meet loan obligations such as taxes and insurance, and maintaining the condition of the home, then the loan wil l need to be repaid.
* The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, hazard insurance. The borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.
Am I Eligible?
To be eligible for a reverse mortgage:
All titleholders must be age 62 or older.
The home must be the borrowers’ primary residence, and must meet Federal Housing Authority (FHA) minimum property standards.
You must have sufficient home equity.
Contact The Brian Sapp Team, to find out if you have enough home equity to qualify.
Will the Bank Own My House?
No. Just like a traditional mortgage, as long as the terms of the loan are met,*the borrowers retain full homeownership and can sell the home at any time.
*The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, hazard insurance. he borrower must maintain the home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid
How Much Money Can I Get?
This is determined by the age of the youngest borrower, or eligible Non-Borrowing Spouse,
your home value, the amount of equity, FHA lending limits, the current interest rate, and the reverse mortgage product and payment option you choose. The Brian Sapp Team can provide you with a quote that’s tailored to your specific situation, with no cost or obligation.
How Do I Receive My Proceeds?
You can take your funds as a lump sum; monthly payments for a specified time period, or for as long as you live in the home; a line of credit; or a combination of these.
Is the Reverse Mortgage Insured?
The HECM reverse mortgage is insured by the Federal Housing Administration (FHA) to protect lenders and borrowers alike. This insurance guarantees you will receive your loan proceeds as agreed upon with the lender at the closing of the loan.
What are the Costs Associated With a Reverse Mortgage?
In addition to interest, the costs include a title fee, credit report fee, real estate settlement closing costs, a property appraisal fee, origination fee, closing costs, mortgage insurance premium, servicing fee and a modest charge for HECM counseling. While closing costs vary based upon the type and size of the loan, they’re the same as those for any traditional mortgage. You can roll most of the up-front costs into the loan, so out-of-pocket expense can be minimized. We will be pleased to give you a detailed cost breakdown.