Reverse Mortgage-Is It Right for You?

Reverse Mortgage-Is It Right for You?

You've probably heard of it, but what exactly is it. And how will it work for you? A Reverse mortgage is not a new loan product, it's been around since 1988. But, in today's economy many people that cannot qualify for a mortgage refinance, can qualify for a reverse mortgage. In effect, you are putting the equity in your home to work for you! So, is a reverse mortgage right for you?

Requirements:

• You must be at least 62 years old.
• You must occupy the home as your primary residence.
• You must pay your property taxes on time.
• You must keep your home insurance up to date and carry an adequate amount.
• If you have an HOA, you must also keep that current.
• You must maintain the home in good repair.

Things to Know:

• A reverse mortgage is a HUD backed program.
• Government regulations guaranty that all lenders adhere to the same guidelines. So, who you choose for your reverse mortgage doesn't matter if you choose the bank down the street or a national chain, as long as they are experienced in doing reverse mortgages.
• You should never feel pressured to accept any mortgage, even a reverse mortgage. Understand your options, completely. Work with a lender that you know and trust.
• A reverse mortgage gives you access to a portion of the equity in your home. You'll decide how much of that you want to draw on. Interest is access on what your draw on and only when you do.
• When you draw on your funds, you are not required to to make monthly payments.
• When you or your heirs sell the home, the equity you drew and the interest that accrued will be deduced from the proceeds of the sale. And all remaining profits go to you or your heirs.
• Eligibility for this loan is not based on your credit score. But, judgments, will need to be paid off and you can use your reverse mortgage funds to do that.

Steps to Obtaining Your Reverse Mortgage:

1. Do some fact finding. Talk to your lender, find out all the details about a reverse mortgage and if it's right for you.
2. You are required by HUD to attend a counseling appointment of approx. one hour. They want to be sure that you understand this product. Family members and attend with you, but not the lender. And there is a small charge for this appointment of about $125.
3. Loan application is next, and you will need to provide supporting documents
4. With completion of the application, title insurance will be ordered and an appraiser will visit your home to provide an evaluation of market appraisal.
5. With title insurance, a completed appraisal, and your loan docs done, underwriting will be started.
6. After underwriting approval, you will be ready to close on your loan.
7. Then closing, you will receive copies of all your loan documents, plus your options for withdrawl of funds and who services your loan.
8. You'll have three days after closing to change your mind, if you wish.
9. After the rescission period is over, the title company will pay off any existing mortgage loans and disburse to you any funds that you required upfront. And the following month, you'll start receiving your monthly statements.
10. Lastly, enjoy your new reverse mortgage, that pays you instead of you paying it.

So, Reverse Mortgage-Is it Right for You?

If you'd like to know more about a Reverse Mortgage, I'd be happy to talk with you, or more importantly, put you in contact with a lender that has successfully completed many reverse mortages.