Reverse Mortgages


Steps to getting a Reverse Mortgage

Below is the most common process for getting a reverse mortgage. Our professionals are eager to help you understand the reverse mortgage process. Please contact us with any questions.

Step 1 - Research Reverse Mortgages
Speak with a mortgage professional about reverse mortgage options. Familiarize yourself with the various types of reverse mortgages and pick the one that is right for you.

Step 2 - Meet with a HUD approved counselor
In order to receive a reverse mortgage you must meet with an HUD approved counselor who will help you understand what it means to have a reverse mortgage. This is free to do and we can help find a counselor in your area.

Step 3 - Fill out our Reverse Mortgage application
After you’ve determined which program best suits you fill out our reverse mortgage application by clicking here. Your information is securely stored and transmitted.

Step 4 - Your application is processed and your home is appraised
While your application is being processed a licensed appraiser will determine if your house needs any kind of repair. Any problems must be fixed before you can be approved.

Step 5 - Your loan reaches underwriting
All details are worked out and your loan is underwritten. Additionally it will be determined whether you’ve been approved or not.

Step 6 - Your loan reaches closing
Once you are approved your loan will enter closing where you’ll get the chance to review the terms and sign the paperwork.

Step 7 - Receive your payments
After closing you’ll have three business days in which to cancel the loan. Once that grace period is up, you’ll start to receive either your monthly payment or your lump sum.

Step 8 - Repaying your Reverse Mortgage
Your reverse mortgage loan becomes due under the following circumstances.

• Homeowner death
• Sale of home
• The home is no longer your primary residence

What are the costs of getting a Reverse Mortgage?

Much like a traditional mortgage, a reverse mortgage does have fees associated with securing it. The following is a list explaining common fees you may have to pay when getting your reverse mortgage.

Origination Fee – The origination fee covers the lenders operating expenses associated with making the reverse mortgage. This can include things like overhead, marketing and title searches.

With an HEMC reverse mortgage your origination fee is equal to the greater of $2,000 or 2% of your counties FHA loan limit. In most U.S. counties the 2% origination fee will be between $4,000 and $7,300. Other reverse mortgage programs like the Home Keeper keep the origination fee to 2% of the value of the home. Origination fees can be bundled into the total mortgage.

Appraisal Fees – Before a reverse mortgage loan can be approved an appraiser will come to your home and inspect it. The appraiser will be looking to determine the worth of your home based mostly on condition, location and the current market situation. The cost of an appraisal is generally between $300 and $400.

If the appraiser uncovers a significant problem you will be required to hire a contractor to fix the problem before obtaining your reverse mortgage. That same appraiser will come out again and re-inspect the property.

Mortgage Insurance Premium – The mortgage insurance premium is a fee associated with the HEMC reverse mortgage plan. This fee is equal to 2% of your counties FHA loan limit or the value of your home, whichever is less. Additionally you will pay an annual premium of 0.5% of the loan balance.

The mortgage insurance premium guarantees that you will continue to receive your monthly payments and that you will never owe more that what your home is worth once the loan reaches maturity.

Closing Costs – Closing costs that are generally included in a reverse mortgage are:

• Credit Report
• Document Preparation
• Flood zone certification
• Termite inspection
• Attorney’s fee and title examination
• Recording fees
• Escrow/Settlement fee
• Other fees

Are Reverse Mortgages Safe

You’ve worked hard to pay the mortgage on your home. With a reverse mortgage you can receive the equity that you earned. A federally insured reverse mortgage program will help you unlock that equity by increasing your monthly income. Rest easy knowing you’re protected because with a reverse mortgage you can:

• Never be forced to sell or vacate your home
• Never owe more than your loan balance or the value of the property (whichever is lower)
• Be assured that the loan doesn’t come due until you leave the residence, either by moving or upon your death.

3 Reverse Mortgage Questions to Consider
 
What is a Reverse Mortgage?

A reverse mortgage is a loan designed to allow seniors to draw upon the equity in their homes either by a lump sum payment or by monthly installments thus providing income even after retirement. The reason this type of mortgage is called a “reverse mortgage” is because the money goes directly to the home owner instead of into paying for the home.

Eventually the money paid to the homeowner is repaid with interest, however it generally doesn’t become due until the homeowner leaves the home due to death, move, etc.
 
Why should I get a Reverse Mortgage?

Getting a reverse mortgage is a big step and needs to be carefully evaluated. Many people have found that by taking a reverse mortgage they avail themselves of the equity they have built in their home.

Something about it allows them to live without moving out of their home.  Do they use the words “Draw down” when referring to equity.

Typically those who benefit most from a reverse mortgage are those who plan to stay in their homes over an extended period and have built a decent amount of equity in their homes. Also, the risk associated with a reverse mortgage is significantly lower than more traditional types of mortgages because you can never owe more than the value of your home.

Contact one of our professionals today to find out if you have enough home equity to make a reverse mortgage a good decision for you. If you have a good amount of equity in your home and you plan on staying there for an extended period of time then a reverse mortgage might be right for you.
 
How do I qualify for a Reverse Mortgage?

If you own your home and are over 62 years of age you are eligible for a reverse mortgage. The home you are thinking of taking the reverse mortgage out on must generally be your primary residence. There are some conditions to what type of home may qualify.

• Typically single-family units are accepted by all programs
• Condominiums
• Manufactured homes and planned developments can qualify for some programs
• Most mobile homes and co-ops are generally not eligible

Many homeowners have found that a reverse mortgage is a great way for them to take advantage of the equity they have built up in their homes.

A reverse mortgage is different than a traditional mortgage. With a traditional mortgage you make monthly mortgage payments, but with a reverse mortgage the lenders pays you money through monthly installments or a one-time lump sum payment. The money that you receive is dependant on your age and the value of your home.   

One of the great advantages of a reverse mortgage is that you are not required to pay the loan back until the home is no longer your primary residence For more information on when a reverse mortgage comes due click here. Another great feature of a reverse mortgage is you can never owe more than the value of your home. No matter what.

If you’re aged 62 or older and own your home you might be eligible for a reverse mortgage. Contact us to find out more about reverse mortgages and ways to make it work for you, or apply now and start the process of tapping the equity in your home.

Check out these pages for more information about reverse mortgages.