ReverseMortgagesEndMonthlyPayments.com
WELCOME!
ARE
YOU A SENIOR CITIZEN?
AND ARE YOU STILL MAKING
MONTHLY MORTGAGE PAYMENTS?
Have
you heard the latest?
Congress has approved a new law.
And the Reverse Mortgage just got better!
Reverse
Mortgages
End Monthly Payments
HERE'S THE LATEST!
Traditional
Refinance Loan
versus
Reverse Mortgage
With a Traditional Refinance Loan the Homeowner borrows a large amount of money and makes monthly payments. As payments are made, the loan balance gets smaller and the home's equity grows.
On the other hand, with the AARP endorsed Reverse Mortgage, the Homeowner (you must be 62 or older to qualify) usually borrows small amounts, i.e., monthly or at other intervals, through a line of credit. Over the course of time, the loan balance gets larger, and the home's equity may become smaller depending on the state of the economy.
HERE'S THE BIG NEWS
NO MORE MONTHLY MORTGAGE PAYMENTS
Payment of the loan is required only once, at the end of the loan, which in most cases is when the Homeowner sells the home, or no longer uses the home as a primary residence for 365 consecutive days, or when the Homeowner passes.
Stay In Your Home With Peace Of Mind
There
are no income, employment, health, or credit qualifying restrictions.
Maximum
loan amount is based on age, where the borrower lives, and the value
of the home. The current interest rate is around 5% - 6%. The amount
owed can never exceed property value, so a Reverse Mortgage can never
cause you to lose your home.
The
funds received during loan term, plus any accrued interest, become
due when the borrower sells or no longer uses the home as a primary
residence.
BEST
OF ALL, NO MORE MONTHLY MORTGAGE PAYMENTS
Flexible Access To Extra Income
Reverse
Mortgage Borrowers May Obtain Loan Proceeds ...
In
a lump sum to cover large expenses.
In
monthly installments to supplement income.
As
a line of credit to draw on as necessary.
There is even a choice for an immediate cash advance in addition to monthly allotments. And borrowers can change funds distribution plans as many times as they wish.
THE
PROCESS
Getting Your Reverse Mortgage
AWARENESS Consumer, i.e., senior Homeowner or adult child, learns about Reverse Mortgages or a particular product from an article, ad, direct mail, word-of-mouth, Broker, etc.
ACTION Consumer seeks more information by contacting a Broker, Lender, HUD, Fannie Mae, AARP, National Center for Home Equity Conversion, or Financial Planner.
COUNSELING Consumer is required to participate in a Consumer Education Session with a HUD approved counselor. This can be done by phone or in person. The purpose of the session is to explain the legal and financial considerations of obtaining a Reverse Mortgage. This session ensures that you understand the program and your obligations as stated in the loan agreement. Upon completion, you will be provided with a Certificate of Counseling which is then given to your Lender as evidence of completion. The certificate expires 180 days after the session.
APPLICATION - DISCLOSURE Consumer completes the application for Reverse Mortgage with Lender and selects payment option: fixed monthly payments for life, fixed monthly payments for term, lump sum payment, line of credit, or combination of all the options. Consumer provides Lender with required documents, i.e., photo identification, verification of Social Security number, copy of deed to home, home owner's insurance declaration page, information on any existing mortgage(s) on property, and their Counseling Certificate.
PROCESSING Appraiser prepares appraisal report. If structural problems are noticed or suspected, physical inspection of home is ordered.
UNDERWRITING After receiving all pertinent information and data, the Lender finalizes the loan parameters with Consumer, i.e., payment options, packages loan, and submits package to underwriting department for underwriting and final approval.
CLOSING Following approval, closing (signing) of loan is scheduled. Initial and expected interest rates are set. These affect the amount of funds available to Consumer, along with the age of borrower(s) and value of the home. Closing papers and final figures are prepared. Closing costs are normally financed as part of loan. Previous payments, if any, by Consumer for appraisal may be refunded or used to reduce the closing costs financed. Lender or title company has Consumer sign loan papers. Any existing debt on the home is paid off. A new lien is placed on the home.
RIGHT OF RESCISSION Consumer has three business days after signing papers in which to cancel the loan, the "three-day Right of Rescission". Upon expiration of this period, the loan is disbursed, Consumer gets access to the funds in the form of the payment option selected, i.e., monthly checks, etc.
REPAYMENT Consumer is not required to make any monthly mortgage payments to lender during the life of the loan. The Reverse Mortgage becomes fully repayable upon: a) the death of the borrower or last co-borrower; b) the sale of the home; c) a permanent move from the home by the borrower, i.e., to a nursing home, or another event, after which the home is no longer the borrower’s principal residence for 365 days in a row. The loan may be repaid by the borrower or borrower’s heirs-estate, with or without a sale of the home.
Getting
Your Reverse Mortgage
Involves Several Actions
You're Just Six Steps Away
From No Monthly Mortgage Payments
EDUCATION
This is the where you are, right now. You are taking the time to learn
about the Reverse Mortgage program to determine if it is appropriate
for your situation.
COUNSELING
A counseling session can be done by phone or in person with a HUD
approved counseling agency. The purpose of counseling is to explain
the legal and financial considerations of obtaining a Reverse Mortgage.
Counseling ensures that you understand the program and your obligations
as stated in the loan agreement. Upon completion you are provided
with a Certificate of Counseling, which is given to your Lender as
evidence of completion. The certificate expires 180 days after the
session.
APPLICATION
You sit down with the Lender and sign the loan application. The Lender
will disclose the estimated total cost of the loan, as required by
the Federal Truth In Lending Act.
Request and application here.
PROCESSING
The Lender will order an appraisal of your home, do a title search
and get a payoff value for any outstanding mortgages. Typically, it
takes between 25 and 45 days to process a loan.
CLOSING
Loan documents are signed, including the Mortgage or Deed of Trust.
CASH
DISBURSEMENT
You have three business days after closing in which to cancel the
loan, the three day Right of Rescission period. Upon expiration of
this period, the initial draw you selected is usually available by
the 5th day. Monthly payments are usually received at the beginning
of the new month after a 3 week set up period.
Reverse Mortgages End Monthly Payments
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SENIORS
FREE 1 HOUR SEMINARS ARE NOW AVAILABLE ON
'HOW
REVERSE MORTGAGES END MONTHLY PAYMENTS'
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CHURCH MEETINGS, SOCIAL GROUPS AND YOUR HOME
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GET
ANSWERS HERE
To Frequently Asked Questions
Q.
Am I qualified for a Reverse Mortgage if I currently have an existing
loan on my home?
A. Yes, but the existing loan must be paid off prior to, or at the
settlement of the Reverse Mortgage. Quite often the Reverse Mortgage
is used to refinance an existing loan.
Q. My property is held in a Living Trust. Do I qualify?
A. Yes, but you must be the primary Trustee and qualified by age.
Q. To avoid probate, my children and I own the property in
joint tenancy. Do we qualify?
A. Yes, if the children are age 62 and older and live on the property.
Otherwise, they would need to be taken off the title for you to participate.
Q. Are the cash advances considered income by the IRS?
A. No. The cash advances are actually loan distributions and are not
considered income. The cash advances are tax free.
Q. Are manufactured homes eligible?
A. Yes. The home must have been built in July, 1976 or after and have
a permanent foundation that is approved by FHA. A structural
inspection is required prior to processing of the Reverse Mortgage.
If the home is on leased land certain additional restrictions can
apply -- please ask for a clear explanation.
Q. Are there restrictions on how I can use the money?
A. No, after all, it's your money!
Q.
What about fees and cost?
A. There are four basic types of charges, other than interest, involved
in setting up a Reverse Mortgage ...
An
origination fee.
Initial
and monthly mortgage insurance premiums, called MIP.
Other
closing costs, such as appraisal, title research, title insurance,
flood certification, etc.
A
monthly servicing fee, which is automatically added to the loan balance.
Q. Are these fees payable at closing or added monthly to the
loan balance?
A. Typically, the only out of pocket expense for participation
in the Reverse Mortgage program is the cost of the appraisal.
Q.
What about the interest rate?
A. The borrower does have the option of either a monthly adjusting
rate, an annually adjusting rate or a fixed rate. Rates are linked
to the one year U.S. Treasury Security Rate or the LIBOR (London Interbank
Offered Rate). The change in the interest rate has no effect on the
amount or the number of loan advances that the borrower can receive,
but it does cause the loan balance to grow at a faster or slower rate.
Q.
When is loan repayment due?
A. The loan is due and payable when the borrowers no longer occupy
the property as their principal residence for 365 days in a row, or
if they fail to comply with the loan agreement, i.e., pay property
tax or maintain Homeowner's Insurance. The loan agreement also states
that the borrowers understand that it is their responsibility to maintain
the property in normal living condition.
The loan must be repaid in one payment, either from the sale of the home or through other resources. There is no requirement that the property be sold, only that the loan is repaid, i.e., the beneficiaries can get a "forward" mortgage.
Q.
What is the effect on public benefits?
A. Loan proceeds are not considered income and will not affect
Social Security or Medicare because these programs are not based on
need. You'll need to check with the benefit specialist for the Medicaid
or SSI programs as certain rules must be adhered so as not to be disqualified
for these types of public benefit programs.
Q. What is the eligibility requirement?
A. All Homeowners must be age 62 or older and occupy the property
as their principal residence.
The home must be owned free and clear or only a reasonable remaining
balance exists. The Reverse Mortgage may be used to pay off the balance
on an existing loan.
The property must be a single-family, condo, townhouse, or up to a
four-unit dwelling.
Q.
How much can be borrowed?
A. Maximum amount that can be borrowed is based on these three factors:
The
age of the youngest Homeowner.
The
market value of the home.
The
current interest rate.
Q. What are Reverse Mortgage Payment Plan options?
A. There are different ways of receiving the loan proceeds. Homeowners
can choose an option that best fits their needs and goals ...
Term:
Provides fixed cash advances for a set period of time.
Tenure:
Provides fixed cash advances for as long as the Homeowners occupy
the property as their principal residence.
Line
of Credit: Establishes a credit line which the borrower draws upon
as he or she wishes.
Combination:
A combination of the above options.
Get
a Reverse Mortgage application and any other assistance here.
Answers
To Frequently Asked Questions
Understanding Your Credit Score
How To Select A Mortgage Consultant
Hari K. Bird
ReverseMortgagesEndMonthlyPayments.com
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