The New Reverse Mortgage vs. the Old Reverse Mortgage

~ By Jim Doyle ~

If you took out a Home Equity Line of Credit (Reverse Mortgage), between January 2008 and January 2014, there may be substantial benefits to refinancing into a new Reverse Mortgage.

A Reverse Mortgage is an FHA insured loan that allows homeowners who are 62 years or older to convert the substantial equity in their home into non-taxable income or cash, while not forfeiting any of the remaining equity in the home.

There are many new changes to the FHA Reverse Mortgage program. There is no loan repayment until both homeowners no longer live in the home. You or your heirs may sell your home at any time, pay off the mortgage balance, and retain the difference, or equity. Just as with any mortgage, as your home appreciates, you will gain equity from the appreciation. You will never owe more than the home is worth.

The amount of money that will be available is determined by the appraised value of the home, the amount of equity 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 homeowners insurance and property taxes.

One couple shared, “Our home needed repairs, but we just didn’t have the money. We were on a fixed income, and all of it is gone by the end of the month. A Revere Mortgage provided the cash we needed for the repairs and we were able to get $100,000* in a line of credit. We eliminated our monthly mortgage payment putting that money back in our budget each month!”

In situations where the need for extra cash for retirement is important, a Reverse Mortgage may be a good solution. 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 receive a lump sum payment and/or have a line of credit to access at any time in the future. You will not have a mortgage payment with a Reverse Mortgage.

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. There are organizations throughout Colorado with whom you may make an appointment, and several 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.

Contact your Reverse Mortgage Specialist for additional information about the new changes and have a proposal created just for you.

*The amount of cash available will vary according to the borrowers’ ages, value of the home, remaining mortgage balance, and other factors.

Jim Doyle

Jim is the VP of Lending and Reverse Mortgage Specialist at Silver Leaf 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 Colorado market.
Direct: 303-875-5994  |  JimDoyle@SilverLeafMortgages.com  |  NMLS# 1394377