Author Archive
Do You Really Need an Annuity or Insurance?
The new Housing and Economic Recovery bill prohibits reverse mortgage companies from requiring borrowers to purchase financial products in order to qualify for a reverse mortgage. This arose out of concern for applying for reverse mortgages who were being taken advantage of by unscrupulous lenders and scam artists that tried to sell unnecessary financial [...]
History of Reverse Mortgages
By now, most consumers have at least heard of a “reverse mortgage.” That is because these specialized loans have become increasingly popular in recent years. This article is dedicated to not only defining a reverse mortgage, but also providing a brief history how the loan originated in the United States.
Reverse mortgage loans are a special [...]
Reverse Mortgages, Insurance, and Medicaid
There has been quite a bit of attention paid in the media lately to the relationship between reverse mortgage payments and Medicaid availability. Because much of the information obtained by the media is hearsay or conjecture, this article intends to weed out fact from fiction.
According to one website dedicated to lending information, “if you receive [...]
Should You Sell or Take Out a Reverse Mortgage?
As seniors consider supplementing their retirement with the equity of their home, many have difficulty deciding whether to sell the property or apply for a reverse mortgage.
Although selling the home may be financially advantageous, many seniors would much rather stay in their homes than go through the hassle of finding a new home and [...]
When the Loan Ends
Reverse mortgages are advantageous because all loan payments are deferred as long as the property remains the borrower’s primary residence. There is no obligation to repay the loan until the owner dies, the home is sold, or the owner otherwise vacates the property (for example, to move into an assisted-living facility).
So, what happens when [...]
Why Do I Have to Complete Reverse Mortgage Counseling?
Federal regulations mandate that all prospective borrowers be required to meet with an independent, third-party reverse mortgage counseling service before they are able to apply for a reverse mortgage.
The counseling sessions are mandatory because many seniors aren’t aware that they have numerous rights and protections in lending and borrowing. Today, many consumer safeguards are [...]
Reverse Mortgages and the Housing and Economic Recovery Act of 2008
The Housing and Economic Recovery Act of 2008 was put in place to “strengthen and modernize the regulation of the housing government-sponsored enterprises and expands the housing mission of these GSE.” Although the bill was primarily created to address the sub-mortgage lending crisis, legislators included provisions to regulate the reverse mortgage industry and offer greater [...]
What is Non-Recourse Debt?
Within the context of learning about reverse mortgages, the average consumer may come across the term “non-recourse loan” quite a few times. After all, reverse equity mortgages are indeed a type of “non-recourse debt.” So what, exactly, is non-recourse debt and how does non-recourse debt compare to other types of debt? This article explains what [...]
Arm Yourself With Information to Prevent Being Taken In By A Reverse Mortgage Scam
New legislation has been put in place just to help prevent seniors from being taken in by scammers in the reverse mortgage industry. If you or a member of your family is considering a reverse mortgage, read the tips below to help protect yourself from unscrupulous lenders.
Con artists prey on those that are too [...]
HECM vs. the Jumbo Private Reverse Mortgage
There are many different types of reverse mortgages available, each with their own lenders, fee schedules, interest rate structures, and more. Two of those mortgage types, the HECM and jumbo reverse mortgage, each offer specific advantages to meet unique borrowers’ needs. Not everyone will benefit from the same type of reverse mortgage, so learning about [...]
Top Reverse Mortgage Questions, Part 2
1. When do I pay back my reverse mortgage loan?
All loan payments are deferred as long as the property remains the borrower’s primary residence. There is no obligation to repay the loan until the owner dies, the home is sold, or the owner otherwise vacates the property for 12 consecutive months (for example, to move into [...]
Top Reverse Mortgage Questions, Part 1
1. What is a reverse mortgage?
A reverse mortgage is a special type of loan used to “unlock” the equity in older homeowners’ (ages 62+) homes. Reverse mortgages enable seniors to cash in on the equity in their homes without giving up ownership of the property. The tax-free income is a loan, and payments are deferred until [...]
Reverse Mortgages vs. Home Equity Lines of Credit
There are some similarities between reverse equity mortgages and home equity lines of credit. Both programs use equity in the property to generate cash flow for the homeowner, and both require the homeowner to pay all property taxes and insurance and utility payments.
Another similarity lies in payment options. Reverse mortgages loans offer several disbursement [...]
When NOT to Consider a Reverse Mortgage
A reverse mortgage is a type of loan that allows homeowners ages 62 and older to convert part of the equity in their homes into cash - without selling the property, transferring the title, or making monthly payments on the loan. While these loans are advantageous to some seniors’ situations, reverse equity mortgages are not [...]
Reverse Mortgage Costs
Reverse mortgage fees are standard for reverse home loans, as with any mortgage product. While a somewhat unique financial product, a reverse mortgage is still a loan that has a lender, borrower, repayment terms, and fees. Borrowers can anticipate paying several expenses, including an appraisal fee, repair fees, up-front mortgage insurance premiums, an origination fee, [...]
Steps to Applying for a Reverse Mortgage
Once homeowners have learned about the advantages of reverse mortgages and decided that a reverse mortgage is appropriate for their situation, they can begin taking steps to secure the reverse mortgage loan.
Stage One: Counseling
Prior to applying for a reverse equity mortgage, all candidates must obtain third-party financial counseling from a Department of Housing and Urban [...]
Payment and Repayment of Reverse Mortgages
Reverse mortgages are an attractive option for senior citizens ages 62 and older who want the benefits of liquidity but have a large amount of their financial assets tied up in their home. Reverse equity mortgages are a special type of loan used to “unlock” the equity in older homeowners’ homes, allowing seniors to cash [...]
Consumer Safeguards for Reverse Mortgage Borrowers
There’s always a large concern for the safety of the elderly in business and lending situations. Scam artists often prey on older people in an attempt to defraud them of their money. In the case of reverse mortgages, the concern of exploiting the elderly can be of great concern to borrowers, their children, or their [...]
Basic Features of a Reverse Mortgage
A reverse equity mortgage can be an attractive option for some seniors, but this type of loan does come with a specific set of requirements and regulations. Any consumer considering using a reverse mortgage to unlock the equity in his or her home should carefully examine the terms of the mortgage before committing.
• Reverse mortgage [...]
What is a Reverse Mortgage?
Reverse mortgages are a special type of loan used to “unlock” the equity in older homeowners’ (ages 62+) homes, allowing seniors to cash in on the equity in their homes without conceding any ownership of the property. The tax-free income generated from the equity in the form of a loan is then available to the [...]