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How to Purchase a Home That Has a Reverse Mortgage

July 13, 2022     98 comments

We were looking to buy a home and signed a contract for sale for $730,000.  The house appraised for just over that amount.  Afterward, we learned that the seller owes more than that ($760,000) on a reverse mortgage.  Does HUD/FHA need to approve the sales price before we can close?  The seller can complete the transaction because the sales price is within 95% of the amount owed.  Does HUD/the lender get to keep the difference between what is owed and the sales price? Are you sure that it... Read Full Article

Skip the Reverse Mortgage Tenure and Go For Growth!

June 13, 2022     10 comments

If you're considering taking out a reverse mortgage, it's important to understand its unique features.  Did you know that the federally-insured home equity conversion mortgage (HECM) program has a loan payment option that grows over time, increasing your borrowing capacity? The HECM program allows homeowners aged 62 and older to access the home equity they've built up in the form of a non-recourse loan.  As a borrower, you can spend your loan proceeds however you see fit, but you are required to stay current on your homeowner's insurance and property... Read Full Article

Here’s How Much Time is Allowed to Pay Back a Reverse Mortgage

May 10, 2022     2 comments

Hello ARLO, My stepmother is in her 80's, has dementia, and is the sole Trustee of a Family Trust set up by my father years ago. My brother and I are the beneficiaries. A few years back her neighbors advised and assisted her in placing the house (which had been assigned to the Trust and is in the name of the Trust) into a Reverse Mortgage without consulting or notifying either myself or my brother beforehand. As sole Trustee, she has never provided required accountings and generally does not understand... Read Full Article

How to Get a Reverse Mortgage if You Still Owe on Your Home

May 2, 2022     24 comments

In this article, you’ll learn: How to eliminate your monthly forward mortgage payment with a reverse mortgage What expenses will you still be accountable for after eliminating your mortgage payment How can you still make payments whenever you choose How to get the best deal & highest principal lending limit The ability to tap into the value of your home by turning its equity into cash can be a powerful tool for someone trying to find a way to expand their financial options for a whole host of reasons. This... Read Full Article

10 Reasons Why Someone Would Get a Reverse Mortgage

May 1, 2022     no comments

Unlock the value in your home with the federally-insured Home Equity Conversion Mortgage (HECM) program, designed specifically for homeowners aged 62 and older.  This non-recourse loan offers a secure way to access your home's equity without the obligation of monthly payments. While reverse mortgages may not be the perfect fit for everyone, they hold powerful benefits for certain individuals.  Here are 10 compelling reasons why a reverse mortgage could be a wise financial strategy for those who qualify. 1.  Budget breathing room/peace of mind Older adults live on... Read Full Article

This Little-Known LESA Growth Feature Is a Game Changer

April 21, 2022     2 comments

This Little-Known Reverse Mortgage Feature Could Be a Game Changer Qualifying for a reverse mortgage is tougher for some people today than it has been in the past. That’s because new underwriting standards have been developed in the past year to ensure that these loan products are safer for the borrowers who use them. As of April 27, 2015, all prospective reverse mortgage borrowers are subject to a Financial Assessment, in which a lender will analyze a loan applicant’s financial history to determine if a reverse mortgage is suitable for... Read Full Article

Warning: Avoid These 3 Reverse Mortgage Mistakes

April 20, 2022     1 comment

Reverse mortgages can be valuable retirement tools but must be used responsibly.  Like many other financial products, the effectiveness of reverse mortgages is only as good as the judgment of the borrowers who use them. For homeowners age 62 and older, a reverse mortgage can provide an additional source of cash flow to supplement retirement savings.  With a reverse mortgage, borrowers receive the lender's proceeds as their home equity. These funds are considered loan advances, not income.  Because of this, they are not subject to state or federal income tax. ... Read Full Article

How Reverse Mortgages Finally Became Safe

April 15, 2022     6 comments

The decision to take out a Home Equity Conversion Mortgage is big, and you may wonder how safe this government-insured loan program is.  While reverse mortgages aren't suitable for everyone, the HECM program has several built-in protections to keep borrowers safe. Safeguard #1 - Federal guarantee One of the program's most significant protections is that the FHA insures it.  (Federal Housing Administration).  As the borrower, you pay an upfront mortgage insurance premium when you take out a reverse mortgage, which varies depending on the loan program you choose.... Read Full Article

How to Use a Power of Attorney for a Reverse Mortgage

March 29, 2022     62 comments

I have the Durable Power of Attorney for my parents, who are age 83 and 73.  They own their home.  I am considering applying for a Reverse Mortgage for them.  What do I need to do? This is a great question, and you picked a perfect time to ask it.  It is much better to find out what you need to do with a Power of Attorney (POA) before you get started than to figure it out as you go along.  HUD has some guidelines for using... Read Full Article

Here are 3 Reverse Mortgage Examples in 2024

March 22, 2022     18 comments

Is there an example of how a reverse mortgage works? We get this question all the time from borrowers, family members, and even others in the lending industry and other professional industries who don't understand the product.  Almost everyone seems to have an opinion on reverse mortgages, often based on virtually no factual knowledge. Often, people base their opinions on something they heard; some report they read from a reporter who may not have had all the information themselves, was looking to make a sensational article or was just... Read Full Article