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 Reverse Mortgages
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WHAT IS A REVERSE MORTGAGE??
- A Reverse Mortgage is like any other loan in most ways except for one MAJOR detail! You're not required to make a mortgage payment of principal and interest!
The reverse mortgage program, insured by FHA, allows seniors to easily convert the equity in their homes to cash. Today, the Reverse Mortgage Program is now one of the fastest growing segments of the mortgage industry. To qualify for this program, you must be 62 years of age and a homeowner. Most importantly, there are no income or credit requirements. That's right! You can have the worst credit in the world, make no money, and still qualify for the Reverse Mortgage.
How can you turn your equity into cash and not have the make a payment? The answer is easy! The government understands that most seniors are on a fixed income and they deserve to access money from the equity in their home, but that leaves one problem. Seniors can't afford to take on the expense of a monthly payment. With a Reverse Mortgage, you get a loan you a portion of your equity, which requires no payment while you reside in the property. Following the death of the last surviving spouse, your children will sell or refinance the home, pay back the Reverse Mortgage, and will keep all the left over profit!
COMMON MISCONCEPTIONS
The first FALSE misconception is that with a Reverse Mortgage, you give up the title to your home. This is completely FALSE. You retain 100% ownership of your property and if you want to sell it or do what ever you want to it, you can….it’s YOUR home.
The second FALSE misconception is that if you die, the lender takes the house. This is FALSE. The lender NEVER wants your house. They are in the business of lending money and earning interest, not selling houses. When the last surviving spouse passes on, the estate goes to the beneficiaries. They have 12 months to either sell the property or refinance it. Remember, any proceeds from a sale are theirs to keep.
The third most common misconception is that if you do a Reverse Mortgage, you will lose all of your equity. This is also FALSE. Given your age and how long you live, as well as how much your property appreciates in value, you will likely have equity in the property. The Reverse Mortgage is designed to allow the lender to get paid back, therefore the result is remaining equity.
FREQUENTLY ASKED QUESTIONS
Are there any income or credit requirements?
Absolutely not! As we stated before, your credit history and income are not factors in qualifying for a Reverse Mortgage.
Do I have to pay taxes on this money?
No! The money from the Reverse Mortgage is considered loan proceeds and therefore is not considered income.
Can I ever owe more on the property than it's worth?
It's possible, but you or your children will not be held responsible.
The Reverse Mortgage is insured by the Federal Housing Administration. This means the loan is non-recourse, so in the event you owe more than the house is worth, the F.H.A. picks up the tab.
Can I make payments on my Reverse Mortgage?
Absolutely! Many seniors use the Reverse Mortgage to pay off a current mortgage and then set up their own payment schedule to pay off the Reverse. Since you're not required to make monthly payments, you choose when and how much to pay.
WHAT METHODS CAN I RECEIVE MY PROCEEDS ON A REVERSE MORTGAGE?
1.Lump Sum. In this method, all of the proceeds are given to you upon funding of the Reverse Mortgage.
- Line of Credit. You want access to the money, but don’t need it all at once….then the line of credit might be your choice. The availiable money will be placed into a line of credit which will be available for your future use. The funds in the line of credit that is not used, does not accumulate interest until used.
- Monthly Payments. This method allows you to receive a monthly check for a specified amount each month.
Or, you have the choice of combining any of the above options listed above.
THE PROCESS TO OBTAIN A REVERSE MORTGAGE
1. You will meet with a loan officer from Sharp Mortgages, Inc. The loan officer will either come to your house or, you may come to our office! We will go over the application and explain the whole concept in great detail. This does not commit you to do a Reverse Mortgage.
2. You will need to do Reverse Mortgage Counseling over the phone. H.U.D. put this in place to make sure we explain everything properly to you. We provide you with the number to call and the sessions usually take about 1 hour.
3. Once we receive your counseling certificate from a H.U.D. counselor, we order an appraisal on the property to get the exact value. By the way, the house doesn't need to be perfect; repairs can be escrowed for. We will also order payoff amounts if you have a mortgage and title work to make sure you have no other liens on title.
4. After we have gathered all of these items including very basic items from you, we set a date with you to close the loan. Once you close, you still have 3 days to cancel or to make sure everything is exactly how we explained.
5. On the 4th business day after closing, the loan will fund and you will receive your money.
The entire process to do a Reverse Mortgage is usually completed within 30 days from start to finish!
Contact Sharp Mortgages by calling:
904-997-1093
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