A reverse mortgage can make the difference.
If you are a senior 62 or older or the children of parents that are struggling with high taxes and insurance, a reverse mortgage may be just the thing you need to balance out your life.
The older the homeowner, the greater the amount available with a reverse mortgage, because it assumes that the funds will be available for a shorter period of time. Any equity left after payment to the lender goes to the estate or heirs of the borrower. That is why I always recommend doing the credit line whenever possible. With the credit line, the funds are there when needed, if funds are not used, there is no interest to be paid on them and the funds remain in equity of the home.
At this time most homes are eligible for the reverse mortgage program. A few exceptions are manufactured or mobile homes built before June 15, 1976 and cooperatives (co-ops). There are some condominiums that do not qualify because of certain restrictions placed on them by the management company. Otherwise most homes single-family dwellings condominiums and manufactured homes qualify for the reverse mortgage program.
The reverse mortgage can help seniors and the children of seniors cope with the increasing costs of insurance in taxes.
There are no restrictions on the funds received from a reverse mortgage. They can be used to pay daily home health care, adult day care, or to help family caregivers with the out-of-pocket expenses.
As of now there are no out-of-pocket expenses to put a reverse mortgage in place. All closing costs and appraisal are incorporated into the end of the loan. Even the reverse mortgage counseling required by FHA to do a reverse mortgage is still free.
You have been comfortable in your home, now let your home make your life more comfortable for you.
Jim Saeger
Reverse Mortgage Specialist
What is a Reverse Mortgage?
If you're over the age of 62and have paid off more than 35% of your mortgage balance, a reverse mortgage will allow you to borrow against the equity in your home.Instead of continuing to make mortgage payments, you get paid back the money you already have in it- that's the "reverse" part.
You never have to repay the loan as long as he lived in your home and you can choose to receive the cash disbursements as monthly income, a line of credit, or a lump sum.
Also,because the FHA/HUD programs are backed by the US government, you'll never owe more than the value of your home-even if you receive monthly payments for the next 20 years.Finally, you keep title of your property-it stays part of your estate.
What can a reverse mortgage be used for?
After you receive the tax-free funds from a reverse mortgage,it is up to you to use them however you please. Some retirees choose a reverse mortgage to have the peace of mind and others want to improve their quality-of-life.
Common uses for reverse mortgages (AARP and HUD survey)
Used to pay medical expenses, homeowners insurance taxes, ease the burden on their children.Home improvements or do needed repairs.
Take a trip/vacation. By new-car.
Comparing the trade-offs
Benefits
continue to live in your own home
receive tax-free income from the cash disbursements, to enhance your retirement income
choose from monthly income,a line of credit, or a lump sum.
Repay the loan at any time with no prepayment penalty.
Owe nothing as long as you occupy your home.
No personal liability for repayment of the loan since it is secured solely by your home (you and your heirs are not personally liable)
passed the remaining equity in your home to your heirs.
Costs
The total cost of getting a reverse mortgage is usually similar to selling your home and moving. The interest rates are also generally lower.
If your home is worth more than the county limit set by FHA there is GREAT news as FHA has raised the national limit to $417000 and higher in some locations.
If you have reverse mortgage questions, please contact me for FREE information
or a reverse mortgage analysis.
Jimsaeger@MyFloridaReverse.com
Ph 727 596 9095
Home equity loan vs. Reverse mortgage
With a home-equity loan you make monthly payments until the loan is repaid (in addition to your mortgage payments). You must also have a sufficient debt to income ratio to qualify and usually a good credit score.
A reverse mortgage pays off any mortgages and is not affected by income or credit score.
A reverse mortgage is a good solution for many American seniors but it is not right for everyone .A reverse mortgage is not right for you if you have:
low home-equity (still owe70% of the home's value)
for example,if you own $100,000 home but still owe $70,000,we do not recommend a reverse mortgage.
Short time left in the home (less than two years )
you wouldn't buy a house if you plan to move out in just two years. The same is true of Reverse mortgage.The closing costs of reverse mortgage gets spread out over time making a reverse mortgage quite inexpensive due to low interest rates.However, in two years there is too little time to spread out the costs.
Program details eligibility requirements
Eligibility is simple.
There are no income, employment, or credit requirements.
All homeowners must be over the age of 62 and occupy the property as their primary residence.
The home can have an outstanding mortgage (it will be paid off) houses, town-homes, condominium units and planned unit developments also called PUDs are eligible there are rare exceptions.
The home must meet minimum HUD property standards. If not, sometimes repairs can be made after the closing of the Reverse mortgage.
How much can be borrowed?
The more your home is worth and the older you are, the more you'll be able to borrow.Homeowners whose properties are worth more than $400,000 may benefit from the Financial Freedom Advantage program since it has virtually no maximum loan limit. The FHA/HUD program's maximum is currently $362,790 and can vary from county to county.
Limits are based on:
age of the youngest homeowner,
appraised value of the home,
the county in which the property is located.
***FHA Has raised the limit***
The current one year U.S. Treasury bond rate or the LIBOR index.
And whether you choose an FHA/HUD or a Financial Freedom program.
Reverse Mortgage Pros
Cash disbursement options
you can choose to receive any combination of these options
a lump sum, the cash is available immediately upon closing (there is a three day waiting period on all reverse mortgages)
equal monthly payments for a fixed number of months this is called Tenure
equal monthly payments for as long as at least one homeowner lives in the property
a line of credit that you can draw upon whenever you wish
Interest rate
Interest rates are low and are generally comparable to traditional mortgage rates. Rates are set based on the one year U.S. Treasury bond rate.You can choose to have the rate adjusted monthly or annually.Changes in interest rates will have no effect on how much cash is available to you, instead fluctuations in rates cause the loan balance to grow at a slower or faster rate.
Loan repayment
the loan is due when the last bower no longer occupies the property as a principal residence. At this point, the loan may be repaid either by the sale of the home or through other resources such as savings or applying for a new traditional mortgage.
If your heirs choose to sell the home, they will keep the remainder of the income from the sale after the loan has been repaid. Your estate has up to 12 months to repay the loan. This means your heirs can take their time to get the best sale price.
Common questions and answers
I have a $200,000 home. If I get a reverse mortgage and spend $50,000 than pass away, does the Bank get my house?
No.Your estate would sell the house at market. The estate would pay the bank $50,000. The remaining equity goes to your heirs.
How popular our reverse mortgages?
The program is growing at 49% annually with over 100000 loans issued in 2007 a 26% increase from 2006, it was started by the FHA and signed by Ronald Reagan in 1988. Reverse mortgages began to be popular in 1991 policy changes lowered interest rates and cut closing costs.
Will my heirs be forced to sell my home?
No.If they decide to keep it, they can refinance the property with a traditional mortgage. Otherwise, they may sell the house and use the proceeds to repay the loan balance and keep the difference.
Can the lender take my home away if I outlive the loan?
No. You cannot outlive the loan. As long as one borrower continues to live in the home and keeps taxes and insurance current, you cannot be evicted, foreclosed or asked for repayment.
Will reverse mortgage affect my public benefits?
No. a Reverse mortgage will not affect social security or Medicare
.
Is the money tax-free?
Yes. The loan proceeds are not considered income by the IRS
Are there restrictions on how use the money?
No. It's your money, after all
Am I qualified for reverse mortgage if I have an existing loan?
Yes. The existing loan will be paid off during the closing.
My properties is held in a living trust. do I qualify?
Yes.As long as you are the primary trustee
Are mobile homes eligible?
Yes. The home must have been built after 1977 and have a permanent, FHA-approved foundation.
My spouses is permanently in a nursing home.
Can we participate?
Yes, only one owner is require the occupy the property.
What is a HECM ?
HECM stands for home equity conversion mortgage, a specific type of reverse mortgage governed by FHA/HUD. More than 90% of reverse mortgages are HECMs .There are other types of reverse mortgages for specific situations,such as high-value homes,that we can tell you about.
The reverse mortgage process
The reverse mortgage process consists of four steps and generally takes about six weeks
1.Education
by requesting free information, you will learn exactly how much money you can receive, how much it will cost, and how the various programs compare.
Since this is the Education phase, you should involve your friends and family to help you learn as much as you can.
info@MyFloridaReverse.com
Jim Saeger
727 596 9095
2. HUD counseling
If you choose an FHA/HUD reverse mortgage, you're required to complete a 45-minute counseling session with a HUD-approved independent counselor.
HUD counseling is available by phone from many different counseling agencies.The counselor will explain the legal and financial obligations of the reverse mortgage and help you explore alternatives.At the end of the counseling session, you will receive the "certificate of counseling " that's needed to begin the application. This is a very important step as we cannot process your application until we have your counseling certificate.
3.Application
after your HUD counseling, you should call 1 727 596 9095 to begin your application.The Reverse Mortgage Specialist will handle everything related to the application and schedule the necessary steps such as appraisal and termite inspection if needed.This would be indicated by the appraiser.
4.Closing
after the closing, there is a waiting period of three days then your lump sum or your first monthly payment check will be mailed to you.
Any Questions
Email info@myfloridareverse.com
