Seniors Reverse Mortgage

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Seniors Reverse Mortgage

P.O. Box 1118
Templeton, CA 93465
Direct: 805-423-3112
Office: 805-434-9142
Fax: 1-888-310-4491

A reverse mortgage enables homeowners 62 and older to borrow a portion of the equity in their home, without having to sell or give up title. There are no monthly mortgage payments of any kind for the life of the loan. The money received can be used for any purpose. A reverse mortgage does not have to be repaid until the borrower moves out of their home permanently, and the repayment amount can never exceed the value of the home. After it is repaid, 100% of any available remaining equity is distributed to the borrower or the borrower’s heirs. HECM reverse mortgages are backed by FHA and the U.S. Department of Housing and Urban Development (HUD). All borrowers must comply with all loan terms and obligations to prevent any type of loan default.


How do I qualify for a Reverse Mortgage?

It is surprisingly easy. You and any co-borrower(s) must be at least 62, own your home, and occupy the home as your primary residence. The home does have to meet certain FHA/HUD requirements that are determined by a qualified appraiser.



What if there is an existing mortgage or lien on my home?

Your home does not have to be owned “free and clear” to qualify for a reverse mortgage. However, any existing mortgage or lien must be paid off at closing. Reverse mortgages are often used to pay these items. Your mortgage debt is not eliminated by the reverse mortgage, but only postponed. You are refinancing your current mortgage into a reverse mortgage that will be repaid when the home is sold in the later future by you or your heirs.



How much money can I receive?

The amount of money you can receive is determined by the value of your home, the age of the borrower(s) and the current interest rate. We are happy to provide you with a summary of the amount of money currently available to you.



How can I receive the money?

You can receive your money as a lump sum (all at once), monthly payments or a line of credit. Many people choose a combination of these options.



What costs are involved with a Reverse Mortgage?

The upfront costs to complete a reverse mortgage are probably the single biggest downside. If your home appraises for $625,500 or more, the upfront costs can be close to $20,000. A lesser appraised value has less fees. The majority of those fees go directly to FHA for mortgage insurance. Other costs include the loan origination fee, title insurance, appraisal, and others. The high costs are because this is a FHA regulated and insured program however, it does provide for a very low interest rate as a result. The costs are funded by the loan and are not “out of pocket”.



How can I use the money I receive?

You can use your money any way you choose:

Home improvements and repair

Healthcare, medical bills and insurance

Re-finance your current mortgage or pay for other debt such as credit cards

Day-to-day living expenses

There are absolutely no restrictions on how you can use your money!



Will I have to pay any taxes?

Please contact your tax adviser regarding the proceeds you receive from your reverse mortgage. Borrowers are required to continue to pay their property taxes and home insurance. This is an obligation of the loan agreement.



Will I lose my home to the bank?

You remain the owner of your home, not the bank, and you can live in it as long as you choose. This program is regulated and insured by the Federal Housing Administration (FHA) and guaranteed by HUD (United States Housing and Urban Development). You cannot be forced to sell or move unless the agreed loan terms/obligations have not been satisfied.



Will the income from the Reverse Mortgage affect my Social Security or Medicare benefits?

Reverse Mortgage income will not affect Social Security or Medicare benefits. If you have a specific question about your benefits we suggest that you contact your local Area Agency on Aging (AAA) at 1-800-677-1116.



When is a Reverse Mortgage due and payable?

A reverse mortgage does not have to be repaid until the borrower moves out of the home permanently. Additionally, the repayment amount cannot exceed the value of the home. You or your heirs will have the option to refinance the home and keep it in the family, or sell it and keep 100% of any available remaining equity.



What terms and obligations do I have if I take out a reverse mortgage?
Reverse mortgage borrowers are required to be current on their property taxes and homeowners insurance throughout the life of their loan. If these loan obligations are not met, this could result in a default by the lender. The residence also must be the borrowers primary residence and must be occupied by the borrowers for 6 months or more out of the year.

Do I continue to own my home?

Yes, you retain 100% full ownership of your home. As with any mortgage, the lender will have a lien against your property. After the mortgage is repaid, you or your heirs keep 100% of any remaining equity.



How do I get started?

Call us today to discuss your specific needs. We are committed to helping you and are happy to visit with you in the convenience of your home.



Reverse Mortgage Misconceptions:


With a reverse mortgage, the bank takes your house at the end.

Not true! With a reverse mortgage you and/or your spouse continue to own the home, and are the only names on the deed or title. Reverse mortgages are designed to tap only a portion of your equity, so you may be able to pass on an inheritance, or have money left over from the sale of your home should you decide to move.



Reverse mortgages are only for desperate “seniors”, or for the “house rich and cash poor.”

Not true! This type of loan is used by homeowners from all walks of life to enhance their retirement years. The growing popularity of this program highlights its benefit to help homeowners manage many different financial situations.



You must be debt-free to qualify for a reverse mortgage.

Not true! Even if you have an existing mortgage or other debts, you may qualify for a reverse mortgage. The reverse mortgage can eliminate the need to continue to make monthly payments on that debt, freeing-up valuable cash for monthly expenses and bills.



When a reverse mortgage comes due, the bank sells the home.

Not true! When you move or sell and the loan is finally due, you or your heirs can either pay the balance on the reverse mortgage and keep the home, or you can sell the home and use the proceeds to pay off the reverse mortgage. You or your heirs keep any money remaining from the sale after the reverse mortgage is paid off.

Content copyright 2007-2009. Katie Bateman.