There should not be any reverse mortgage facts, which you would not know after you have done your homework carefully. Why should you? Simply, because that is your role and you will benefit from it. This article tries to arouse some of the biggest questions concerning the reverse mortgage information and tries to draw your interest to the many details this loan type includes.
Dont worry, there is no industry jargon, only practical questions and answers. It is important to offer the information with a street man`s language and to avoid the typical financial jargon. Unfortunately I cannot offer state by state details, because they wary a little bit, but this list gives you a good idea about the reverse mortgage information to ask.
Who Can Even Dream About This Product?
The reverse mortgages are meant for senior Americans, who own their permanent home, where they have enough equity and who are at least 62. So every applicant must be at least 62 and marked as an owner. The maximum amount of borrowers is three.
What About The Income Or Credit Information?
Don`t worry, nobody will ask it, because the reverse loan will always be taken against the equity of your home. This means, that even if you have not so good credit score you will automatically get the reverse loan, if you have these three things in order: you are at least 62, own a home, where you live permanently and where you have enough equity. That`s all!
How Can I Use The Money?
Well, it´s up to you. The money comes from your home equity and is meant to you. This means nobody will ask a report about the usage. You are free to decide it.
How Much Can I Get?
Good, that you asked that! The maximum amount depends on several things: about your age, or about the age of the youngest borrower, the appraised value of the home and about the interest rate level. To put it simply, the older you are, the higher the home value and the lower the interest rate, the more you will get.
But My Financial Future Is Unknown.
This is the situation for most of the seniors. Who can say for sure, what needs he or she will have after five years, for example? In these cases it is wise to use a credit line opportunity or to leave a part of the maximum sum unused.
Do I Have To Pay The Taxes?
In most cases no, because the reverse mortgage payments are not income but the loan payments. And you have already paid the taxes once, when you earned the salary with which you have paid your mortgage. The thumb rule is, that if you will spend the money during the same month as you have received it, it is tax free. The lump sums are different and you better ask advice from the reverse mortgage counselor.
How Can I Find A Reliable Lender?
The best source of information is your friend, who has taken the reverse loan or your bank manager. The reverse loan is a long term commitment, so only the old financial companies with the good reputation can form your short list.
What Loan Types There Are?
The home equity conversion mortgage, or HECM, is the most popular loan with a market share of around 90 %. HECM is the only loan, which is insured by HUD, i.e. the Federal Government. The insurance means that if your lender will become unable to pay to you, the insurance will take care of the missing payments. HUD has two other loan types, HECM for purchase and HECM Saver Reverse Mortgage.
The proprietary reverse mortgages are private loans, which are backed by the companies, which created them. The single purpose reverse mortgages are offered by some states and some local government agencies or nonprofit organizations.
What Is The Best Time To Sign?
Of course your financial needs dictate the timing but if you are not in a hurry, you can save some money. The reverse loans are financial products, so their prices follow the general economical circumstances. This means, that when the economy is flying high, so are the reverse loan prices and vice versa. So you can do the best deal during the recession by shopping around and by selecting a fixed rate loan.
Can I Buy My First Home With This?
Yes you can but then you must have a bigger down payment, because the equity is missing. If you can do this, it is possible.
What Should I Do To Prepare For The Counselor Meeting?
Collect as much questions and information as you can. In the end of the day only you will carry the responsibility. The secret is in the details. You simply have to know the reverse mortgage information well enough. Ask, discuss, read from the Internet, call to your bank manager, contact the senior people`s associations and so forth.
Can The Lender Take My Home?
Never, if you will take care of the property insurances, taxes and to keep the property in a good shape. The heirs or the spouse is never forced to pay for the reverse loan. There are only two money sources, the mortgage insurance and the selling price of the home. That`s it!
Can I Refinance The Loan?
Yes, it is possible. The market can offer better terms than what you have at the moment, but you can also get new costs to pay. It is wise to make the calculations carefully and to show them to the counselor.
What`s The Benefit Of The Counselor Meeting?
First, concerning the HECM loans it is mandatory. This does not make it useless. On the contrary. The counselors are respected senior advisors, who have usually a long experience about the financial issues of the seniors. The reverse mortgage facts, that these people can give to you are extremely valuable. Prepare well for the meeting, it can mean you huge savings!
Is My Medicaid Eligibility In Danger?
No, if you will follow the Congress guidance. They have set the so called penalty rules. If you have assets, you have to move them to another place, so that you are anymore their owner. Congress has established a period of non-eligibility for Medicaid for the seniors, who have these kind of assets and will transfer the money.
These are many more topics are handled in the article collection published at Reverse Mortgage Information page. I recommend the reading warmly!
Juhani Tontti, B.Sc., Marketing, Recommends, That Every Senior Reads The Reverse Mortgage Facts By Reading This Reverse Mortgage Information . Visit: Reverse Mortgages
