Reverse Mortgage Education
What’s the best way to learn about reverse mortgage loans?
The best decisions in life are usually made with careful consideration. The education process is an important step in learning about reverse mortgages. To get started, go online and read websites, read articles, and get other people’s opinion who know about reverse mortgages. Many books have been written about reverse mortgages. Our President, John Barlow, has written a book called “Understanding Reverse Mortgages” and you can find it at Amazon using this link, www.amazon.com/author/jbarlow. The book gives you all the basics about reverse mortgage loans and uses 3 scenarios to show you how a reverse mortgage impacts people in different situations. Ask friends who have a reverse mortgage or have gone through the process. As with all advice you receive, make sure the people know the facts before they give you advice.
The next step is to contact us at Sound Financial Mortgage LLC to speak with us to discuss to determine your loan amount and how a reverse mortgage would apply to your personal situation. We provide a quote package that will include an estimated comparison worksheet to analyze the differing products available. It’s important to compare all of the products, closing costs, interest rates, loan amounts, loan types, and proceeds to ensure you have chosen the right product for your situation.
If you begin to feel like this may be a good option for you, the next step is to schedule an appointment with an independent HUD-approved counselor. As part of your quote package, you receive a list of local and national HUD-approved counselors for you to choose from. The purpose of HUD-approved counseling is for you to receive a independent opinion and to ensure all your questions have been answered from a source who is not compensated to sell you a loan. They will also discuss other ways for you to reduce your budget to maximize the money you have available each month. FHA has made this a required step for anyone who chooses to move forward to the loan application step. The counselors are required to explain options and other resources that may be available including social services. The counselors will explain the financial implications of obtaining a reverse mortgage and how it will impact your finances over time. Their main concern is for you to have all the facts necessary to make the best decision.
Home Equity Conversion Mortgage (HECM)
At Sound Financial Mortgage LLC, our primary loan is called a Home Equity Conversion Mortgage or HECM. Home Equity Conversion Mortgage (HECM) loans are insured and regulated by the Federal Housing Administration (FHA) and represent the majority of reverse mortgage loans today. We offer both reverse refinance loans and purchase loans under the HECM category.
HECM loans can have a fixed rate or adjustable rate. Each loan has advantages and disadvantages and the right loan will depend on several factors including the age of the youngest borrower or non-borrowing spouse, loan balance, equity stake in your home, and your needs moving forward.
When receiving proceeds from a HECM loan, options for obtaining proceeds may include:
- A single lump sum
- A credit line account that you control (Adjustable rate only)
- Monthly distributions for a specific period of time (term payments) or for as long as you live in your home called tenure payments (Adjustable rate only)
- A combination of these options (Adjustable rate only)
Request Reverse Mortgage Information
Here at Sound Financial Mortgage LLC, we can help you understand how everything fits together and if a reverse mortgage loan may be right for your situation. For more information, email john@soundreverse.com or give us a call at (425) 427-9377
