Hi Norma, HUD does allow trusts, but they must meet the established requirements. Before you change the title, send the trust to your servicer for approval and once you receive approval to do so, you can move the title into the name of your trust without issue. I recommend that when that time comes, you use a title company or attorney to be sure that your change of title does not create a taxable event and they can help you with that change.

Hello Jim, Borrowers have 5 different options for the receipt of their funds. And the options are based on the program they choose when they receive the loan but if they still have funds available, they can always change that option later. For example, the first option is a lump sum draw. This is where borrowers take all the money available to them on the initial draw at closing. Since they are taking all the money the program will give them, they obviously cannot change later to a new program because there are no more funds available to them. Most borrowers do not choose the lump sum option anymore unless they are buying a home and need the total amount for the purchase or need the entire amount to pay off an existing mortgage. The next option is a Line of Credit. As the name implies, this is where the borrower establishes a line of credit from which they may draw funds as they need them until such time as the total amount available to them is exhausted. The borrowers may take an initial draw from the line if they need funds right away or they may wait, but that choice is entirely up to them. To receive money, if there are still funds available in their line, they simply contact the lender and have the funds sent to their bank account (which is the easiest and fastest method) or have a check sent to them in the mail – their choice. Following that is a Tenure or payment for life. This is where the lender will let you know what amount you would receive as a payment for life based on your age, the value of the property and interest rates at the time you get the loan. The lender would send you a monthly payment based on that eligibility. If you later decided you wanted to change your option, for a small change fee (usually about $50.00), the servicer will do the calculations to determine how much would still be available to you under the other options and you could change to a line of credit, take a full draw of the remaining funds, or change the option to a term payment where you decide the payment amount. The Term option is the option mention briefly above. You set the amount of the payment you receive from the lender every month rather than allowing the HUD calculator to set it based on your age and other parameters. You can set a higher payment (or any amount you desire) than with the tenure option but you need to realize that you are more prone to using all the funds earlier and may outlive your funds availability. If that happens, you can still live in the home without having to make a mortgage payment, but once all the funds are gone, you will receive no more monthly payments. And then finally the option is to make the loan a modified Term or Tenure. This is where you take a portion of the funds and use them for a line of credit and then use the remaining funds for a tenure payment or a term payment. For example, if you had a total of $200,000 available to you and you want a monthly payment, but you have some work you want to do around the house as well, a modified tenure payment might be a good option for you. You could have $35,000 put into the line of credit to complete the work you wanted to do and then use the remaining $165,000 for monthly payments for life. All of the options work the same way with regard to the amount you owe, or your heirs owe should you decide to sell the home or if you pass before you receive all the funds. You only owe what you borrowed plus any interest that accrued on that amount (plus any fees or mortgage insurance you finance). You may have had $200,000 available to you in the example above, but if you only received $75,000 in payments, that plus any fees and mortgage insurance you incurred is the amount plus interest that you will need to repay if you pay the loan off early or pass before you received all the money.

Hello Lila, With the line of credit option, you can decide how much of the total loan you choose to borrow. For example, you may have a total of $200,000 available to you, but you can choose to only draw $50,000 and you are not charged interest on any funds you do not use. Also, you or your heirs never have to repay any loan proceeds you do not borrow so even though you had the larger amount available, you only repay what you borrow plus any interest that accrues (including the mortgage insurance premiums).

Hello Deborah, This is a government-insured loan and so the documentation is standard. Proof of identity, the income you use to qualify, the appraisal on the property, title work to see what liens are on the home and if it is a purchase, all the purchase documentation. If this is any property other than a single-family detached residence (condominium, manufactured home, etc.) there may also be additional items needed for the property itself. During the processing of the loan, the lender will run credit and verify the information received for the loan file. In addition, every borrower must go through HUD-approved counseling and obtain a certificate from the counselor. We have a list of the items you will need to send in for your initial package which you can review here that will give you a pretty good idea of the things needed but there is always the possibility that due to unique circumstances in your loan request, other requests may be made of you. If you have specific questions or situations you would like to go over with us, we would be happy to review the areas of concern with you in advance.

Hello Catherine, I assume you mean use your home for collateral for another loan or lien? And the answer to that question is entirely up to the other party from whom you wish to borrow. Nothing in the reverse mortgage prohibits you from taking out additional mortgages however, because the balance of the loan goes up as borrowers accrue interest and do not make payments, and because the amount available grows over time on the unused portion of the line, many other lenders are hesitant to loan behind a reverse mortgage simply because they do not know how high the balance or available line of credit could grow. If you do have a lender who is willing to lend behind the reverse mortgage though, there is no problem with the reverse mortgage under those circumstances.

Hello Nancy, The simple answer to this is yes, but you must qualify with the additional obligation. If you signed on the loan for another person, in this case for your daughter's mortgage, you are legally obligated to make that payment if she does not. Therefore, under residual income requirements, this payment amount will also be considered when determining your ability to qualify for the reverse mortgage. Even if your daughter has been making the payments, you are obligated to make them if she ever doesn't and so HUD includes them in your monthly obligations calculations.So, when you ask can you qualify, yes you can. The fact that you co-signed the loan does not in and of itself disqualify you for the reverse mortgage if you are living in your property as your primary residence and meet all of HUD's other requirements. But just know that if the payment amount itself disqualifies you, that is a different issue.Borrowers need to know that when they sign on a loan for a family member or friend, they are promising to also make those payments if needed and that can affect their ability to obtain other credit later. If you don't qualify with the payment on that other property, perhaps your daughter can qualify for a refinance loan on her home on her own now and could refinance that loan in her name alone?It might even work to her benefit if the rate or terms are better now than when she purchased. If she has owned the home for more than a couple years, there is a good chance she has built up some equity and it might be worth looking into if needed.

Hello Sylvia, Reverse mortgages do not use ratios for qualification. Instead, the underwriting uses a residual income method that subtracts all your monthly obligations from your income (including your home taxes and insurance) and you need to have minimum amounts left to live on each month in accordance with HUD requirements. The residual changes with family size and where you live due to the cost of living in different parts of the country and the increased cost to feed and care for a larger family. The required residual is not high and is much easier in most cases to meet than ratio guidelines. Another great feature of the residual method is that cash in the back can be dissipated to equate to income as can the reverse mortgage line itself, even if you don't plan to use a portion of the money every month because you could use it in the manner if you wanted to or needed to. And HUD takes it one step farther by letting folks who still don't meet the residual income requirement still qualify in many cases with a LESA (life expectancy set aside) wherein a portion of the funds are set aside to pay for the taxes and insurance on the property for life which brings your monthly obligations down since you no longer have to pay them -the lender does with funds from your reverse mortgage that are set aside for the sole purpose of paying these expenses when they come due. The bottom line is that you should not automatically assume that you will not qualify. Feel free to visit our calculator and you can see what you might expect to see in benefits from a reverse mortgage based on your age and property value with no personal information other than your month and year of age and the zip code where you live. After that, if you feel the numbers look good for your circumstances, we would be happy to discuss qualification with you based on your income and debts and let you know exactly what you would be looking at in advance.

Hello Peggy, HUD uses a residual income method to qualify borrowers for a reverse mortgage. They will require borrowers to have different amounts depending on what part of the country in which they live and the cost of living and the size of the family living in the home. A single borrower has to have a residual income of $529.00 to $589.00 per month in order to qualify (depending on where you live and you can see the exact amounts in our article here. Residual income is the amount of money left over after paying all other debts. And before you panic if you think you don't quite make it, many times the reverse mortgage proceeds themselves or cash you have in the bank may be able to get you to the required level through a method known as asset dissipation. This is where the underwriter can assign an income value for funds you have assuming that if you had to use some each month to assist your income, you could.

Good Afternoon Ustav, Firstly, if you own a home valued at $350,000, your loan will only be a portion of that value and that portion will depend on your age, the program you choose and the interest rates in effect at the time. Furthermore, your loan "term" is for your life, but you can choose if you want the payments to continue for as long as you live in the home and that option is called a "tenure" payment option or for a specified time period (such as the 15 years you mentioned) known as the "term payment" option. Both options could calculate differently, depending on the age of the youngest borrower. In short, I cannot give you the exact numbers based on the information you have given me, but I can go one step better. You can access our online calculator where with very little information (never a social security number or anything private), you can get the answers to all of these questions and compare the different options to see which is better for you. The information available to you includes the amount for which you are eligible based on your age(s), property value and current interest rates. You would be able to review the amortization schedule for any program you wish so you can see under both the term and the tenure options what you would owe at the end of 1, year, 5 years, 10 years and so on year by year, through the life of the loan. You would be able to see a list of closing costs for your area and a TALC which is a disclosure for reverse mortgages and stands for Total All Loan Costs that shows you what the effective cost is at various points in the loan. And as I said, there is a separate loan comparison so that you can see what the line of credit, different payment options or even the fixed rate lump sum payment would look like if you so choose. I think you will be much happier having the actual information you have requested rather than me giving you all estimates because I don't have the full information needed. If you want any further information after that, we would be happy to help you but if not, you will not be hassled or pressured. Give the calculator on our website a try, I think you will like it!

Hello Gustavo, You can do a reverse mortgage at any time with no waiting period required. There is a very good possibility that the loan amount would be determined by the purchase price or the current appraised value, whichever is less, if the purchase price is considerably lower than the current appraised value though. If that is the case (the value is now much higher than the amount you paid to purchase), you are safe at just the appraised value after one year.

Hello, We don't recommend a reverse mortgage as a short term or bridge type of financing because all of the costs are typically front end loaded but there are many factors that depend on the individual. Even though HUD has taken steps to lower costs on some of the loans and there are many low cost options available today, we still believe that if the borrowers think that they may want to move in the next 12 -24 months and do not have a dire need for a reverse mortgage, care should be taken with regards to the terms of the reverse mortgage they choose. Firstly, in direct answer to your parent's situation. 5 -10 years is more than ample time to consider a reverse mortgage. We were seeing borrowers considering reverse mortgages at a time when there were no low cost options and the loans were all very expensive and borrowers intended to stay in the properties for no more than 24 months at the longest and maybe less time. For those borrowers we habitually recommended they wait until they made the move they were planning if they could and then use the reverse mortgage on the home they planned to retire to. We had some borrowers who had no choice, it was a reverse mortgage or face loss of the home even if they thought they might move in a shorter time frame and those borrowers had to factor in the costs of the loan with the costs of selling in a bad market (2011, 2012) and many did well be waiting but that was a decision they had to make at the time and no one can tell the future. Now we have lower MIP payments available when borrowers are not using more than 60% of the funds available to them and typically lower lender fees available at this time when they do have to use most or all their funds. Either way, the closing costs have dropped significantly on many of the reverse mortgage loans closing today and therefore even though these costs are still front-loaded, many borrowers have the opportunity to use the reverse mortgage as an even greater tool today due to those decreased costs.

Hi Sally,I can't possibly advise you on whether you should go live with your father, that is a call you would have to make. I can tell you that whether you go live there or not, your dad will be able to live in the home for the rest of his life and then when he permanently leave the home (either from his death or if he had to go to an assisted living facility), the loan would then become due and payable.If you are his heirs, then you would have to option of keeping the home or selling the home at that time but if you choose to keep the property, you would have to be able to pay off the existing loan with either money you have available to you or be able to qualify for a new loan in your names at that time. Otherwise, you would have to sell the property at that time. You don't have to "buy the property" from the lender if you are your dad's heir, you would already own the property.You just need to keep these things in mind and plan accordingly whether you choose to move there or not if you are the heir and will be the owner of the property one day. It might make a difference as to how you prepare for ownership and loan payoff.

Hi Elizabeth,The reverse mortgage company does not "own" the house at the time the borrower passes. The loan becomes due and payable and it is up to the borrower's heirs to determine how they want to accomplish this. They can choose to sell the home and repay the loan, refinance the loan in their own name(s) or they can pay the loan off with other funds available to them. The lender does not own the property at this time and they do not own any personal property inside, it still belongs to the heirs of the borrower.Also, since the loan is a non-recourse loan, the lender can never seek repayment from any other assets to repay the loan. In other words, if the borrowers received all the funds before the prices of homes fell so dramatically in most areas of the country and lived there for many years without having to make payments, all the while accruing interest and now upon passing the property is not worth as much as is owed on the reverse mortgage, the heirs have the option to choose to either repay the obligation at 95% of the current appraised value or simply allow the lender to take the property to repay the obligation.Regardless of which option they choose, they still have the right to all the borrower's personal belongings and, as stated, the lender cannot seek repayment from any other assets other than the property itself.