Ingrid B. Quinn

NMLS ID #211652 Arizona, Loan Consultant

Reverse Mortgage Loans

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Buyer-Seller-Rd-SignA Reverse Mortgage enables seniors, age 62 and older, to access a portion of the equity in their primary residence without giving up ownership, and without making monthly mortgage payments. Borrowers do not have to repay the loan until the last surviving borrower permanently leaves the residence. Borrowers must own their home outright or have a mortgage balance low enough to be paid off with the reverse mortgage proceeds and/or acceptable funds to close. Current LTV range 52–78% (range may change with interest rate changes) All borrowers must be titleholders, all titleholders must be borrowers. The lender does not take the home at death. Heirs sell or keep the property and keep any profit after repaying loan.
A Reverse Mortgage can ease senior’s financial strain. With a reverse mortgage, the equity in a home is converted into cash. This can be done in a few different ways, including monthly payouts, one-time payouts, or a mixture of the two. It seems to be that many people are not quite sure if this solution is the right one to choose. The truth is there are both pros and cons to a reverse mortgage. I will be discussing both sides with in this article.
Many believe that seniors are not given the full story about the details involved with cashing out on the equity in your home. Seniors are required to attend homebuyer/homeowner education to participate in a Reverse Mortgage. This should ensure that they have full understanding of the process.
Closing costs for this type of loan are higher. Although closing costs are standard with all mortgages, they are somewhat higher with a reverse mortgage because the origination fees and an upfront servicing fee are collected.
There are several reasons why a Reverse Mortgage may be a good solution for a senior. One of the top reasons people use a reverse mortgage solution is because borrowers are not expected to pay back the loan while they are living in the home. A senior can select from five payment plans:
Tenure- equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
Term- equal monthly payments for a fixed period of months selected.
Line of Credit- unscheduled payments or in installments, at times and in an amount of your choosing until the line of credit is exhausted.
Modified Tenure- combination of line of credit and scheduled monthly payments for as long as you remain in the home.
Modified Term- combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.
A home equity conversion mortgage (HECM) tends to be the most popular because it is a Federal Housing Administration (FHA) insured mortgage.
Many people prefer a Reverse Mortgage loan because they have an easier qualification process than a regular mortgage. There is no minimum credit score or income requirements to obtain one. Seniors generally have fixed or retirement income that may not support normal loan qualifications. Nearly all homes are eligible, including HUD-approved condominiums and single detached homes and some manufactured homes. For more information or comments about a Reverse Mortgage please contact me at ingrid.quinn@cobaltmortgage.com or visit my website at http://www.scottsdalemortgageexpert.com or http://www.cobaltmortgage.com/ingridquinn.

Author: ibquinn

I am a Senior Loan Officer at Caliber Home Loans, with over 32 years of Mortgage Banking experience. I have the expertise and knowledge to help focus in on your homeownership goals and make them into reality. My team of experienced mortgage professionals and I can assist you in all steps of the home buying process and ensure that you have a smooth and hassle-free transaction. Caliber cannot accept mortgage loan applications or inquiries for properties located in New York through this site. Ingrid Quinn NMLS #211652 BK#0923637 www.ScottdaleMortgageExpert.com

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