Is a Reverse Mortgage Right for You?
~ By Jim Doyle ~
A Reverse Mortgage is a government insured loan that allows homeowners who are 62 years or older to convert the substantial equity in their home into non-taxable income.
The amount of money that will be available is determined by the appraised value of the home, the amount of equity in the home and the age of the homeowners. While you will no longer have a monthly mortgage payment, you must continue to maintain your home by keeping up with repairs, paying for insurance and paying your property taxes.
You may use the funds in any way you choose. Many people opt for monthly checks that help with the cost of living. Others use the money to cover health care costs, travel, or to update their home. You may also receive a lump sum payment and/or have a credit line to access at any time in the future. It may be possible to receive monthly income along with the lump sum cash and/or the credit line. You will not have a mortgage payment with a Reverse Mortgage.
There is no credit qualification, and there is no loan repayment until both homeowners no longer live in the home. You will never owe more than the home is worth because the FHA (Federal Housing Administration) will pay the difference if the loan balance is more than the value of the house when it is time to repay the Reverse Mortgage.
In situations where the need for extra cash for retirement is important, a Reverse Mortgage may be a good solution. One of the requirements for a Reverse Mortgage is that the home owner(s) attend a counseling session with an approved non-profit organization to examine the pros and cons.
In the Denver Metro there are five such organizations in various areas of the city with whom you may make an appointment. There are also agencies that will do the counseling over the phone. They will explain such things as costs, tax implications, payment options, benefits and drawbacks. A certificate will be issued to you upon completion. You will be asked to provide it to your Reverse Mortgage Specialist to be submitted with the other loan documents should you decide a Reverse Mortgage is right for you.
Currently there is no need for proof of a certain level of income or credit. Later this spring, however, the Department of Housing and Urban Development (HUD) will require a “financial assessment” and credit review. This will require that you provide additional documentation. Contact your Reverse Mortgage Specialist for additional information and a proposal created just for you.
Jim Doyle is the Branch Manager and Reverse Mortgage Specialist at Security First Financial Mortgage in Centennial, CO. As a Reverse Mortgage professional he handles the entire loan process by offering a no-commitment client consultation, assistance with application completion, help scheduling an appraisal to assess the value of your property, and closing services. By having oversight and control in-house, Jim can ensure a smooth and worry-free Reverse Mortgage process for you, the client. Jim consistently achieves the highest customer satisfaction rating in the Denver Metro market. Direct: 303-875-5994, JimDoyle@SecurityFF.com NMLS# 335659