Reverse Mortgage Refinance Loan
We often are asked the question” how does a reverse mortgage loan work and why would someone want this type of loan?” Our clients have used a reverse mortgage for many reasons.
A reverse mortgage loan may:
- Pay off your existing mortgage (Required on all loans)
- Pay a lump sum of money to you (fixed rate or adjustable rate)
- Establish a line of credit for emergencies or long term care (adjustable rate only)
- Pay a monthly amount to you for life (adjustable rate only)
- Pay a monthly amount to you for a specific term (adjustable rate only)
When you are considering a reverse mortgage, the first thing to ask for is the quote package and analyze at least 3 different loan options specific to you. The quote package provides a great learning opportunity to see how the numbers and the concepts work together. The loan amount will be determined by the age of the youngest borrower on the title or non-borrowing spouse, the expected interest rate, and the appraised home value up to the FHA maximum claim amount of $679,650. Although this sounds complicated, it only takes a few minutes to input and we are able to provide the information in a timely manner.
Will I Qualify for a Reverse Mortgage Loan?
Eligibility will require meeting certain basic qualification, although they are not all inclusive.
- A homeowner with at least one person on title aged 62 or older
- The home is your primary residence
- All underlying mortgages and liens must be satisfied at closing
- Pay ongoing property taxes, homeowner’s insurance, and HOA dues and maintain the home in good working condition
- Pass Financial Assessment by the underwriter including willingness and ability to pay ongoing obligations
For the property to be eligible for a reverse mortgage, it must meet FHA minimum property standards. We lend on the following property types:
- Single family home
- 2-4 Unit homes in which one is occupied by you
- HUD-approved condominiums
- Some manufactured homes on owned land
Additional Reverse Mortgage Information
It’s important to note that you will not give up ownership of your home. When you get a reverse mortgage, you retain the title to your property and it stays in your name. There are also no prepayment penalties, and you can pay off the loan anytime you wish without incurring a penalty. Reverse mortgages are non-recourse loans. This means that if the loan balance is greater than the value of the home when the property is sold, the broker cannot seek to recover the additional loan balance from you, the co-borrower, or the assets of your estate. Repayment of the loan is not required until you or the last surviving borrower sell, move, or pass away. You will still need to remain compliant with the terms of the loan, but as long as you continue to own the home and occupy it as your primary residence, the reverse mortgage does not become due.
Is a Reverse Mortgage Right for You?
Planning your short and long term goals takes a great deal of care. Let our team help answer your questions. You can get help calculating your loan amount by calling us at (425) 427-9377, emailing us at john@soundreverse.com, or by filling out our online form.
