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Reverse Mortgage Life Expectancy Set Aside (LESA) Explained

A key development in the overhaul of HECM guidelines was the introduction of the LESA.  This requirement is a response to past challenges where borrowers, after receiving a lump-sum equity payment, struggled to meet essential obligations such as homeowners insurance, property taxes, and home maintenance to FHA standards, leading to defaults. The LESA is designed to ensure that property charges are managed effectively, safeguarding borrowers from the risk of default. The Security of a LESA with a Reverse Mortgage The Life Expectancy Set Aside (LESA) is revolutionizing how... Read Full Article

Is a Reverse Mortgage Right for You? 3 Key Considerations

Like many of our readers who are navigating retirement, you might wonder if a reverse mortgage is right for you.  You've likely seen your equity grow substantially, possibly even owning your home outright - a common scenario for many baby boomers. Your home, often your largest asset, may lead you to consider the option of a reverse mortgage.  At All Reverse Mortgage, we understand the importance of this decision.  This article integrates our insights with 3 important questions, helping you evaluate whether a reverse mortgage fits your financial future. We'll... Read Full Article

5 Ways To Lose Your Home With a Reverse Mortgage

With a Federal Housing Administration-insured Home Equity Conversion Mortgage (HECM), the borrower retains ownership of the property while continuing to live there throughout the loan.  They are not required to make monthly mortgage payments during that time. Reverse mortgages are often misunderstood, and a common misperception is the idea that in a reverse mortgage, "the bank takes the home." On the contrary, if the borrower meets the loan terms, that borrower maintains ownership of the home throughout the entire course of the loan. The loan balance grows over time, and... Read Full Article

Reverse Mortgage Amortization Schedule Explained

Once you have decided that a reverse mortgage is right for you, looking at the amortization schedule is essential.  A reverse mortgage amortization schedule is a document that will provide the best estimate of how the loan will hypothetically perform over time. The amortization schedule must use the rates and draw amounts available when you run the schedule to look forward to illustrating how the loan balance and the line of credit will fluctuate.  Therefore, a fixed-rate loan with a one-time draw would have an accurate amortization schedule because the rate... Read Full Article

Reverse Mortgage Principal Limit Explained

I am 87 and received a HECM Loan.  The maximum claim is $250,000.  Due to age and other factors, the credit limit was due to reach the maximum claim.  Withdrawals were denied when the balance was around $225,000, and no withdrawals have been allowed since the servicer has been getting compound interest each month.  HUD has been accessing fees and premiums.  Maybe I'm delusional, but something doesn't add up here.  Am I wrong? Understanding the Maximum Claim Amount The Maximum Claim is used to determine your reverse mortgage benefits... Read Full Article

Here’s the Truth About Reverse Mortgages (No BS)

I have read so much reverse mortgage info.  It sounds like it is not really to help you but for the bank to help themselves.  It is designed to make you think they are helping you, but the truth is you are giving away your home.  You are selling it to them for a very low price.  If you get the reverse loan and die a year later, you have lost your home; you just gave it away, and your family can't do anything about it and cannot have it... Read Full Article

Return of Non-FHA Reverse Mortgages are Here!

If you're in the market for a loan that can convert your home equity into cash flow or a line of credit in retirement, chances are you have explored the option of a reverse mortgage. But the reverse mortgage is not one-size-fits-all.  Many people don't know that there are several products to choose from, both under the Federal Housing Administration's popular Home Equity Conversion Mortgage (HECM) and private loan options. For the last several years, the number of reverse mortgage products on the market has been limited to the government-insured HECM and... Read Full Article

Lowest Cost Reverse Mortgage Options in 2024

Are you searching for the lowest-cost reverse mortgage? A few short years ago, people were reading about how expensive reverse mortgages were, but that does not have to be the case currently.  Don't get me wrong; HUD still charges an Initial Mortgage Insurance Premium based on the home's value that can run as high as 2% for this one cost alone for the higher draws exceeding 60% of the available Principal Limit. Depending on the part of the country in which you live, some of the necessary costs like title... Read Full Article

What to Do If Your Home Suffers Fire Damage with a Reverse Mortgage

UPDATE: FHA Extends Foreclosure Protections to Maui Borrowers The Federal Housing Administration extended its existing disaster-related foreclosure moratorium in Maui County, HI, through May 6, 2024, for borrowers with FHA-insured single-family mortgages, including HECMs.  This extension provides additional time for borrowers recovering from the catastrophic Maui wildfires to consult with mortgage servicers and housing counselors and access federal, state, and local housing resources without having to contend with the burden of an impending foreclosure action.  I live in California, have a reverse mortgage, and would like to know what would happen... Read Full Article

How Long Can You Leave Home with a Reverse Mortgage?

How long could that homeowner be absent (e.g., on an extended vacation) before they would be considered not residing in the house?  Would they be allowed someone else living in the house to care for them? I will start with the second question as it is more straightforward to answer without reservations. The reverse mortgage does not prohibit a borrower from having anyone else live on the property, such as a family member or a live-in caregiver.  The borrower may undoubtedly bring in help to assist them in their living... Read Full Article
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