Reverse Mortgage Foreclosure Has No Effect on Heirs

July 13, 2022     25 comments

My MIL and FIL recently entered a reverse mortgage.  The house is in good shape and worth about $150,000.  I expect they will take a large distribution upfront as well as withdraw monthly amounts until they hit the max dictated by the lender. The large distribution up front coupled with fees, closing costs, mortgage insurance, and interest build means that if they continue to live in the house for even 15 years, I expect the loan balance to exceed the value of the home.  Glad for the non-recourse nature of... Read Full Article

How to Purchase a Home That Has a Reverse Mortgage

July 13, 2022     104 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     12 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     26 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

Avoid These 3 Common Reverse Mortgage Mistakes to Protect Your Retirement

April 20, 2022     1 comment

Reverse mortgages offer homeowners aged 62 and older a powerful tool to tap into home equity, providing tax-free funds for retirement.  Whether covering medical bills, funding in-home care, or making home improvements, these proceeds can enhance financial flexibility—without the burden of state or federal income taxes.  However, their success hinges on smart decision-making.  Careless use can jeopardize your financial security and even your home. Here are three common mistakes to sidestep, ensuring your reverse mortgage supports a comfortable retirement. Mistake #1: Wasting Loan Proceeds on Non-Essentials A reverse mortgage... Read Full Article

How Reverse Mortgages Have Become Safer: Essential Protections Explained

April 15, 2022     6 comments

For years, reverse mortgages carried a stigma.  High fees, the fear of losing your home, and tales of predatory lenders made many older homeowners wary.  Yet, these loans have evolved significantly.  Thanks to robust regulations, federal insurance, and greater transparency, reverse mortgages are now safer than ever, offering a secure way for retirees to tap into their home equity. What’s changed? New safeguards protect borrowers from unfair practices, ensure clarity, and provide flexible financial options.  Let’s dive into these essential protections and see why reverse mortgages might deserve a second... Read Full Article

How to Use a Power of Attorney for a Reverse Mortgage

March 29, 2022     64 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? Great question—and perfect timing!  Understanding how to use a Power of Attorney (POA) for a reverse mortgage is far easier when you know the rules up front.  The U.S. Department of Housing and Urban Development (HUD) provides specific guidelines for POAs in Home Equity Conversion Mortgage (HECM) transactions.  Let’s break it down so you’re... Read Full Article