Reverse Mortgage Facts – Information To Know Before Applying

Have you ever honestly thought, how many facts you have to know about the reverse mortgage loans, before you are ready to apply? Have you realized, that your role is to write your financial needs, but then read expert information and talk to the counselor?

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

Now Free HECM Reverse Mortgage Counseling For All Seniors

Have you known, that a senior customer will never be turned away, if he or she cannot pay the reverse mortgage counseling? HUD, which is a Government agency, has got the rules, that they can charge for the reverse mortgage counseling, but only a fair price. Now there is even better news!

The HECM reverse mortgage counseling rules say, that the agency cannot charge the fee during the counseling session, if the incomes of the applicant is 200 % below the poverty limit. However, in these cases they charge the fee when the loan will be closed. The low income customers must bring the income documents, like the social security payment receipts or other income documents to the reverse mortgage counseling session.

1. Why The Reverse Mortgage Counseling Is Important?

This session is obligatory for all seniors, who will apply for HECM. This tries to guarantee, that the seniors get enough independent information about how to solve the financial future problems. The counselors are experts, who help seniors and they do not try to sell anything.

A senior, who is going to meet the counselor must do the homework. He has to plan, how he will arrange his or her future financial questions. The job of the counselor is to find the answers. The answer can be something else, than to take the reverse loan. But if the solution is the reverse loan, the counselor can advice, which lenders are reliable, what are the costs of the loan and how the loan works.

2. Who Can Qualify?

The qualification has been made easy. The key thing is, that an applicant is 62 year old or older and owns his permanent home, where he has equity left. Almost all home types are accepted, only some motor home types have been left outside. Altogether three seniors can become borrowers, but all must be owners and fulfil the requirements.

3. Kill The Rumours By Meeting An Expert!

When a human nature does not understand something, it starts to create its own truths. This has happened to the reverse loan images. People, and the press, have invented a lot of rumours about the unhappy seniors, who suffer because they have taken the reverse loan. On the top of this there are quite many scam artists, who have sold too big programs to the seniors. To avoid all the difficulties from these things, a senior makes it wise to get the expert guidance from the counselor.

4. Get The Correct Information Already In The Beginning Of The Planning Process.

It is important to make your homework. The Internet includes all the needed information, so just use the search engines. Actually you can get the full information about how the reverse loans work before you will meet the counselor. In the counselor meeting you can get information for your own situation, i.e. which solutions fit to you.

5. The Free Reverse Mortgage Counseling.

HECM reverse mortgage counseling has always been free for seniors with annual incomes less than $ 20.000 or for couples with annual incomes less than $ 30.000. For others the customary fee has been $ 125, which has been included in the loan sum, i.e. collected after the running time has ended.

And then the good news. HECM reverse mortgage counselors will waive the counseling fees from all borrowers to improve the information sharing and to help elder people to keep their homes. They see the free information sharing as one important way to make the program more interesting among the seniors.

The service is offered by NCOA or The National Council on Aging via its Reverse Mortgage Counseling Services Network. If you are interested, they offer a free telephone number to set the date for the meeting, which you can find from the Internet.

Juhani Tontti, B.Sc., Recommends To Utilize This Free Reverse Mortgage Counseling, Which NCOA Offers. An Expert Reverse Mortgage Counselor Can Give The Right Recommendations To You. Visit: Reverse Mortgages