Know your options:

Each person has a unique financial situation and needs. As such, you cannot be pigeon-holed into one type of loan. If your needs are not assessed correctly you may choose the wrong reverse mortgage, simply because the other options either were not discussed properly or were not discussed at all. Although on the surface this mistake may seem obvious, the financial ramifications of knowing your reverse mortgage options can be huge. Make sure your loan officer thoroughly discusses multiple loans with you and how each can affect your financial position.

If you receive Medicaid or SupplementalSecurity Income (SSI) benefits:

You pay no taxes on reverse mortgage proceeds because the IRS does not consider loan advances to be income. Your Social Security and Medicare benefits also are not affected.

That being said, if you receive SSI, Medicaid, food stamps, or other public assistance, loan advances are counted as “liquid assets” if you keep them in your bank account and don’t use them right away. If your assets are greater than these programs allow, you could lose your eligibility. This is why many seniors choose to receive the reverse mortgage proceeds as a line of credit, because they can take money out as needed and spend it immediately, so it cannot be counted as an asset. You should discuss these issues with a trusted professional who understands these government programs.

Selling Your House in a Short Time:

A reverse mortgage is an excellent solution to many financial situations, but not all. If you plan to sell your house soon, getting a reverse mortgage may not make sense.

As with any mortgage, there are closing costs. The closing costs for a reverse mortgage are spread over the loan’s duration, making the loan “cheaper” the longer you keep the house.

A reverse mortgage is ideal if you plan to stay in your home for some time, but if you plan to relocate in less than three years, the cost of the loan can outweigh the benefit. There may be cheaper alternatives to accomplish what you need.

Be Aware of Cross Selling:

Some lenders have ties or principle interests in companies that sell other financial products such as annuities, stocks, or insurance. Make the decision that is right for you if you felt that you’re being pushed into other financial products. Seek the advice of trusted advisors to make sure you are doing the right thing. A sure way to avoid a conflict of interest is to get your reverse mortgage from a lender that does not sell any other financial product.

Your Right to Cancel:

With most reverse mortgages, (other than the HECM for purchase) you have three business days after closing to cancel the deal for any reason, without penalty, by federal law. To cancel, you must notify the lender in writing by fax or certified mail. This protects you if, for any reason, you have second thoughts that a reverse mortgage is not the right choice, or if you have concerns about the lender, the terms, or the fees. However, before sending the notice, you should discuss it with your lender, because if you send the notice, and then change your mind and decide to continue, some lenders may require you to start all over again.

Know Your Responsibilities:

Because you still are the owner of your home, you still are required to pay for property taxes, homeowner’s insurance, and home repairs. Make sure you set aside some money to pay for these responsibilities. Ask your loan officer what is the lender’s policy on maintenance and repair. You may want to take enough money up front to make future repairs so that your monthly cash advance will stay the same.

Include your Family in the Decision Process:

Don’t leave your family out of the process of getting a reverse mortgage, especially grown children. Try to get consensus or at least include them during the education process. A reputable lender will welcome speaking with your family members, but it may do so only with your permission.

Get Professional Advice:

Consider discussing the benefits and disadvantages of reverse mortgages with your financial planner or real estate attorney. You can avoid pitfalls if you have an impartial party clearly explain the consequences.

Things to Watch Out For:

- Sales tactics involving the required or suggested purchase of annuities, other investments, long term care insurance, or other insurance with proceeds from the loan.
- Sales tactics involving contractors looking for proceeds to pay for home repairs.
- Being advised to transfer the property’s title out of your or your spouse’s name to qualify for the loan.
- Being advised to have loan proceeds payable to a third party, and not you as the borrower.
- Estate planning services that offer to refer you to a lender for a fee or percentage of the loan. You can obtain information on lenders from HUD at no cost.
- Pressure to draw down all of you available equity into a single upfront disbursement. You’ll need money in the future to keep current with your home’s taxes, insurance, and maintenance.

Some Words of Advice:

- Obtain independent legal and financial advice prior to signing loan documents.
- Discuss the loan with trusted family members.
- Know that reverse mortgage loans cannot have prepayment penalties or restrictions. Loans must be able to be repaid in full or in part at any time without penalty.
u Understand your obligations to pay your taxes and insurance and to maintain the property in satisfactory condition. Failing to do so may constitute default and lead possibly to foreclosure action.

For more information and a FREE QUOTE, please call toll-free 1-888-302-5565 or visit: Reverse-mortgage-quote.org

You’re considering refinancing your home. If you are 62 or older, do you know that you have choices and options that can empower you? A reverse mortgage may be a much better solution to accomplish your goals than a home refinance.

What do you want to accomplish? Homeowners typically refinance their homes several times in the course of their lives looking for lower interest rates. However, once you reach 62 years of age and qualify for an FHA-insured reverse mortgage (Home Equity Conversion Mortgage, or HECM), you suddenly gain new options that make the interest rate only one of your considerations. You should ask yourself, what do I want to accomplish with a refinance as a 62+ homeowner? You still may be working, but are looking ahead to retirement; or you’ve already retired and are looking forward to enjoying your life and family. You also should consider your need for cash and your ability to make monthly payments if you refinance.

Qualifying for a refinance as a retiree can be difficult. If you are like most homeowners, you took out your initial mortgage when you were working. However, after you retire and your income changes, meeting the income qualification for a home loan can be next to impossible, especially in these days of credit restrictions by banks. Many retirees do not meet the credit or income requirements to qualify for a conventional refinance. Fortunately, a homeowner 62 or over can refinance his or her home at a low interest rate using a reverse mortgage—because it has NO income qualification, NO credit qualification, and NO required payments for as long as you continue to live in your home.

A reverse mortgage offers choices and options. You want to make a payment? It’s never a requirement, but that’s great! You can make a payment on your reverse mortgage whenever you want and in the amount that you want—on the principal, the interest, or a combination of both—it’s your choice. YOU, not the bank, choose what works best for you depending on what you want to accomplish and what your cash flow needs are during any particular month. Nevertheless, remember that the major benefit of a reverse mortgage is that you do not have to make ANY payment, and the loan plus interest does not come due until the last homeowner moves out of the house or passes away. If you have a lot of bills this month, then don’t make a payment—and the bank won’t mind. You are completely in control because it is your choice of when, how much, and IF you make a payment toward your reverse mortgage. Do you need an emergency fund or extra money now and then to make ends meet? Or do you just want to have some fun? No problem. With a reverse mortgage you can do just that.

Refinance your current mortgage with a reverse mortgage. Once you “refinance” your current mortgage using a reverse mortgage, you can set aside the remaining equity into the line of credit that is built into the loan. With the HECM the line of credit grows no matter what your home’s value does. Let the equity sit there and grow and use it when and if you need it. Your home equity can become your emergency fund or even your entertainment fund. As incredible as it seems turning 62, it opens the door to this surprisingly versatile refinance option—the congressionally mandated and FHA-insured HECM reverse mortgage. It allows you to never make another mortgage payment for as long as you live in your home, with the freedom to make payments when and in whatever amount that YOU choose. A reverse mortgage financially empowers your retirement!

For more information
and a FREE QUOTE,
please call toll-free
1-888-302-5565

1. What is a reverse mortgage?

A reverse mortgage is a special type of home loan that lets homeowners convert part of their home’s equity into cash to supplement their income. The equity the homeowner built up over years of making mortgage payments can be received as a lump sum, in a stream of payments, or as a credit line that the homeowner can draw from whenever he or she desires. Unlike a traditional home equity loan or second mortgage, no repayment is required until the borrowers no longer use the home as their principal residence. The most popular reverse mortgage is the Home Equity Conversion Mortgage (HECM), guaranteed by the Department of Housing and Urban Development (HUD) and insured by the Federal Housing Administration (FHA).

2. How do I qualify for the HECM?

To be eligible for a Home Equity Conversion Mortgage, FHA requires that you be a homeowner age 62 or older, either own your home free and clear or have a small to medium-sized outstanding mortgage balance, and that you speak with a HUD-approved counselor to make sure you understand how a reverse mortgage works.There are no income or credit requirements.

3. What if I didn’t buy my home with an FHA mortgage?

Your property must meet FHA minimum standards, but it doesn’t matter if you didn’t buy it with an FHA-insured mortgage.

4. What if I own a condominium?

You still can qualify for the HECM. As long as the property is your principal residence, it can be a single-family residence, a one-to-four unit dwelling with one unit occupied by the borrower, a manufactured home, or a unit in an FHA-approved condominium or Planned Unit Development. Although your property must meet FHA minimum property standards, you can pay for repairs with your reverse mortgage.

5. A reverse mortgage or a bank home equity loan?

To qualify for a traditional second mortgage or home equity line of credit, you must have sufficient income and good credit in order to make the required monthly payments—and if you fall behind, you could lose your home. The reverse mortgage is completely different. Instead of making monthly mortgage payment, you receive payments, and because the loan doesn’t have to be repaid for as long as you live in your home, there are no income or credit requirements. Of course, like any homeowner you still are required to pay your taxes, insurance, utilities, and keep your home in good condition. The key distinction is that with an FHA-insured HUD reverse mortgage, you cannot be foreclosed upon or forced to vacate your house because you “missed your mortgage payment.”

6. Can the lender take my home away if I outlive the loan?

No! HUD guarantees that you will receive all the payments that are owed to you, even if you live longer than your available funds. The loan balance grows to exceed the home’s value. You cannot be forced to sell your home—and the lender cannot take your house from you—in order to pay off the reverse mortgage.

7. Will I still have an estate that I can leave to my heirs?

When you die, sell your home, or no longer use it as your primary residence, you or your estate will repay to the lender the cash that you received from the reverse mortgage, plus interest and normal finance charges. All proceeds beyond what you owe belong to you or your estate, meaning the remaining equity can be passed on to your heirs. Your heirs can choose to keep or sell the house, so long as the loan is repaid. If they want to keep the house, they can get a mortgage of their own or use their own funds to pay back the loan. If they don’t want the house, they can sell it to repay the loan and keep any money that remains. None of your or your heirs’ other assets are affected.

8. How much money can I get from my home?

It varies, but in general, the FHA will allow you to access approximately half of your home’s value. The FHA uses a formula based on the age of the borrowers, the appraised value of the property (up to a cap determined by FHA), and the interest rate. The amount determined by the formula first will be used to pay off your current mortgage and the remainder will be available for you to use for anything that you wish. Your reverse mortgage representative can give you a quote tailored specifically for you.

9. What if I want to take out more equity from my home than the FHA lending limits?

Like the FHA “forward” mortgage program, the FHA reverse mortgage is intended primarily to benefit low-to-moderate income households in low-to-moderate value homes, though any homeowner who meets the simple qualifications may participate. The amount you can borrow will be limited by the FHA lending limit. A homeowner whose property is valued will beyond the FHA lending limit, and who has a large amount of equity, might not receive as much cash from a HECM as they could from another reputable private or public program.

10. Should I use an estate planning service to find a reverse mortgage? I have been contacted by a firm that will give me the name of a lender for a “small percentage” of the loan.

HUD does NOT recommend using an estate planning service or any service that charges a fee just for referring a borrower to a lender! HUD provides this information without cost, and HUD-approved counseling agencies are available for free or at minimal cost, to provide counseling and free referral to a list of HUD-approved lenders.

For more information and a FREE QUOTE, please call toll-free1-888-302-5565 or visit: http://www.seniorsretirement.com

It is important to do your homework before deciding if a reverse  mortgage is right for you. There are many things to consider. Call Toll Free  1-888-302-5565 and we will be happy to help you with all of your questions and concerns.

Doesn’t it seem like every time you turn on your television or open your newspaper, you see an advertisement for a new financial product? The industry is constantly hard at work coming up with new ways to help you manage your money, boost your income and invest more.

A good chunk of these new products fall flat. But every once in a while, one will take hold in a way that even the experts didn’t see coming. To me, that means it’s time to look under the hood, kick the tires and really get a sense of whether that particular product is for you before you buy into all the hype. These days, that hype is about reverse mortgages.

Designed for people 62 and over, these mortgages — which in fact aren’t all that new, but have just recently taken off — enable you to have a bank buy back your home while you’re still living in it. It provides an income that you can opt to receive in a lump sum, a monthly payment or a line of credit that you draw upon when necessary.

Sounds kind of like winning the lottery, right? Not quite. You have to pay the money back (plus interest) when you vacate or sell the home, and there are fees involved. Still, these mortgages do have a place, and they’re rapidly finding it.

We would like to cordially invite you to seniorsretirement.com where we provide you with all of the information you need in order to make an informed decision as to whether a reverse mortgage is right for you. Toll Free 1-888-302-5565

Here’s what you need to consider before you (or your parents) join the reverse-mortgage frenzy:

Your age. These mortgages aren’t for everyone, but the older you are, the more likely you are to benefit from one. For one, you probably have more equity in your home. But the other reason is this: Banks calculate the payout based on not only the value of your home, but your age and average expected length of life.

“If you’re 75, you could get a much more adequate stream of income than if you’re 65. That’s because the bank would estimate that if they’re starting to pay at 65, they’ll have to pay for a longer period of time,” explains John Rother, group executive officer of policy and strategy for AARP.

Your situation. A reverse mortgage probably isn’t for you if you’re not planning to stay in your home for a long time, so consider that upfront. Then think about other factors related to both your current and future lifestyle. People get these loans for a variety of reasons, says Peter Bell, president of the National Reverse Mortgage Lenders Association. Some do it to finance an active lifestyle in their retirement, others because the home needs to be repaired or updated with health care equipment.

“Let’s take a 75-year-old widow who’s lived in this home for some time, but it needs substantial repairs. If she doesn’t have any other way of financing those, then a reverse mortgage might be an appropriate way for her to stay in the home, keep it in good shape, and continue to enjoy it,” explains Rother.

Note: If you’re hanging on to this home not for your own pleasure or comfort, but because you think your children will want to live in it some day, have a discussion to make sure that’s the case. If it’s not, consider downsizing to something smaller and more manageable.

The alternatives. As I mentioned, one might be moving into a smaller, less-expensive home or cutting back on your expenses. But if you’ve made all possible cuts to your budget and still need some extra income, do some research into benefit programs you may be eligible for, either from your state, the federal government or your former employer. You can also look into a home equity loan or line of credit, depending on if you need the lump sum or just want to have some money available in case of an emergency. The one silver lining of the probable recession is lower interest rates. HELOCs are more attractive today than they’ve been in two and a half years.

The fees and interest rate. These mortgages are paid back when the home is sold, typically as a result of the borrower moving or passing away. The fees, also paid at that time, tend to be higher than those associated with a traditional mortgage. Bell says the exact figures vary by product, but typically average 5 percent of the home’s value.

“When they sell, what they owe is the sum of the funds that have been advanced, the fees that were associated with the loan, and any interest that was accrued on it. But that’s capped by the value of the house,” explains Bell. If the amount owed is more than the value of the house, the lender eats the difference. If it’s less, you (or your heirs) keep the change.

The lender. There aren’t a ton of banks out there offering reverse mortgages, but you still need to make sure you work with a reputable one. First thing to know? By law you’re required to seek independent counseling before you sign on the dotted line. Your bank should give you a list of counselors in your area who can help you sort through the nitty-gritty and determine if the lender — and this product — is right for you.

SeniorsRetirement.com has an experienced staff that can guide you through the entire process and answer all of your questions. Our brokers can arrange meetings with lenders in your area and are happy to discuss all of your options. Toll Free 1-888-302-5565 ext.101

If you decide to seal the deal, stick to what you came for. Lenders may try to layer on other products, like long-term care insurance or annuities, that you just don’t need. The presence of this practice was among the findings of the AARP survey, says Rother. “With any mortgage you’ll be pitched a home warranty, home repair services, maybe health insurance or financial accounts. Some are quite legitimate and others are not.” As a consumer, it can be hard to make the distinction, which is why a third-party counseling service is so important.

Article credit:
Jean Chatzky
TODAY.com contributor