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HECM vs HELOC Comparison: Features & Decision Guide by ARLO™

September 9, 2021     10 comments

Reverse Mortgages Can Be a Solution to Major HELOC Resets. There will soon be significant changes for many Home Equity Line of Credit (HELOC) borrowers that could amount to considerable increases in payments. But a solution may also be available for those who qualify: a reverse mortgage line of credit.  In the next few years, many homeowners who have taken out a Home Equity Line of Credit (HELOC) will encounter a potential reset, which means their monthly payments could soar. Some homeowners could benefit from switching to a reverse mortgage... Read Full Article

Options When a Spouse Dies with a Reverse Mortgage

September 8, 2021     16 comments

Under the old reverse mortgage rules, non-borrowing spouses of reverse mortgage borrowers did not have the same rights borrowers did. In fact, in some cases where both spouses were living in the house but only one was named on the home title, those non-borrowing spouses were left without many options after the borrower spouse died. These cases have been covered by mainstream media and often made headlines due to the unfortunate situation they presented. But all that has changed. The federal government has implemented new rules to protect... Read Full Article

Issues with Reverse Mortgages & Adult Children Living in Home

September 8, 2021     20 comments

My mother has a reverse mortgage and I've been reading and trying to understand it all. Basics... her house was appraised at 390,000 back in 2007, she owed 113,000 on a previous loan. "Original principal limit" 234,000 minus the 113,000 leaves 121,000. Her payment plan was the line of credit which was 99,000. First question; where does or who the remaining 22,000 of that go? She receives statements all the numbers (Loan Balance) go up every statement. Starting at 234,000 and now at 268,000. "Growth of principal limit" and "service... Read Full Article

Here’s an Ideal Reverse Mortgage Purchase Example

September 8, 2021     5 comments

One financial tool available to borrowers age 62 and over that is not brand new but is often overlooked is the HECM for purchase or the reverse mortgage purchase program. The HECM ("Heck-um") is HUD's acronym for the Home Equity Conversion Mortgage, and it allows borrowers to not only refinance and eliminate loans on their existing homes or obtain cash from their home to spend for any reason but also allows borrowers to purchase a new home when needed. For many borrowers over the age of 62, the income requirements... Read Full Article

60% Reverse Mortgage Disbursement Rule Explained

September 8, 2021     4 comments

The U.S. Department of Housing and Urban Development has made several changes to the Home Equity Conversion Mortgage (HECM) program to strengthen the FHA Mutual Mortgage Insurance Fund (MMI or Fund) and protect the viability of the reverse mortgage program. The changes affect the following requirements: Initial disbursement limits New Single Disbursement Lump Sum payment option Initial mortgage insurance premiums Initial mortgage insurance premium calculation for refinance transactions New Principal Limit factors Financial assessment requirements Funding requirements for paying property charges are based on the financial assessment. Lump... Read Full Article

Reverse Mortgage Credit: Tax Lien, Judgement & Collections

September 8, 2021     32 comments

How Credit History Can Affect Your Reverse Mortgage Eligibility  Court judgments and outstanding state or federal tax liens can blemish your credit history and make borrowing difficult.  These derogatory marks on your credit report can also hinder your ability to get a reverse mortgage. A reverse mortgage allows homeowners age 62 and older to borrow against their home equity, which they may receive as a line of credit in a lump sum or monthly loan disbursements.  The loan is generally repaid when the borrower passes away or permanently vacates... Read Full Article

New Appraised Value Under 12 Months? No Problem!

September 7, 2021     no comments

We bought our home 11 months ago. According to what I understand the loan must be more than 12 or older. We will need to wait a few months to do a reverse mortgage? Hi Lowell, You and I also traded emails on this issue but I thought this was a good opportunity to let the community see the answer as well.  There is no requirement to refinance into a new reverse mortgage loan of one year seasoning on a house that you acquired on a bona fide sale. If... Read Full Article

Reverse Mortgage Commercials: The Impact of High-Pressure Sales

September 7, 2021     no comments

I usually write articles based on the current situation in our industry or the feedback I'm getting from customers.  It seems that now more than ever, I'm getting online blog requests and calls from borrowers telling me they are feeling a lot of sales pressure from loan originators on their reverse mortgage requests. Some of these folks are quite concerned because the lender representative will call constantly and quote everything from company size to monthly volume as a reason for doing the loan with them but not necessarily tangible benefits... Read Full Article

Successor of my Parent’s Living Trust with a Reverse Mortgage

September 3, 2021     no comments

First off, I absolutely LOVE this site! So informative as it relates to reverse mortgages. Thank you for helping us navigate this reverse mortgage world. My parents had a RM. Mom passed away last year; dad this past June. They had a Living Trust and will. Their house was in the Trust with instructions to sell it and distribute assets to my siblings and me, and their church based on percentages. One of my siblings wants to purchase the house. The lender appraised value is $450k. The realtor comps show... Read Full Article

The Realtors Guide to Reverse Mortgages for Home Purchase

September 3, 2021     2 comments

Because more borrowers can buy homes and that helps your buyers over the age of 62, it helps your sellers and it helps you! Many real estate professionals have been skeptical of reverse mortgage purchase transactions if they have even heard of them at all, simply because they didn’t know anything about them. Some heard a horror story from “somebody who knew somebody who…”, but often, the facts never prove true. The fact is that the HECM (Home Equity Conversion Mortgage or “Heck-um”) for purchase program is an excellent program... Read Full Article