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Reverse Mortgage FAQ's

Frequently Asked Questions for Reverse Mortgages

What have you heard about Reverse Mortgages?   If I wrote you a check today for $50,000 and told you that you do not have to make monthly payments, what would you do with that money?

  • Supplement your income?
  • Buy a new car, truck or motor home?
  • Replace lost income due to the death of a spouse?
  • Hire a caregiver to avoid nursing home?
  • Pay off debts?
  • Help your grandchildren?
  • Create a larger estate for your heirs?

Why Are More Seniors Taking a Closer Look at Reverse Mortgages?

  • They want to maintain their dignity and independence.
  • They want to improve their quality of life.
  • They are living longer and outliving their incomes.
  • Medical and prescription costs continue to increase at a staggering rate.
  • They want to protect themselves from lost social security and retirement income once the first spouse has passed away.
  • They want to have the ability to afford at-home healthcare and avoid the dreadful nursing home costs.
  • They want to fix-up their homes or want cash for needed home repairs.
  • They want to eliminate monthly mortgage payments.
  • They want to buy a new car, truck or motor home to travel and enjoy life.
  • They would like to create a larger estate for their heirs with proper estate planning.
  • They do not want to be a financial burden on their children.
  • Many are forced to or must return to work because of losses in the stock market and lack of proper retirement planning

What is a Reverse Mortgage?

This is a unique loan called a Home Equity Conversion Mortgage or “HECM” designed for seniors that are 62 years of age and older. It allows you to get equity out of your home in the form of monthly income - an equity line of credit or immediate cash, tax-free. Use for any reason or goal you have without ever having to make a monthly mortgage payment on the loan as long as you live in your home. Homeowners do have to pay taxes and insurance.

If you live in your home until your death, your heirs will have the choice to pay off the loan or sell your home and keep the remaining equity. If there is no remaining equity, no debt passes to your heirs or estate. Recourse is limited to the value of the property.

Is a Reverse Mortgage Safe?

Yes! FHA fully insures your loan and guarantees that no debt ever passes to your heirs above & beyond what the home is worth.

HUD participates in regulating the program and the industry to protect you, therefore, all reverse mortgage applicants must complete a HUD counseling session which we can help you set up.

Non-Borrowing Spouse protections are in place should the borrower pass away or leave the home.

In 2001, Congress passed legislation making Reverse Mortgages a permanent government program.

What are some of the features, advantages, and benefits of a Reverse Mortgage?

  • You keep title to your home.
  • You can keep your home in a living trust.
  • All income is Tax-Free.
  • No restrictions on how you use the funds.
  • Make no monthly principal & interest payments while living in your home.
  • You cannot outlive the loan.
  • There are NO charges to your property taxes.
  • Guaranteed by the U.S. Department of Housing (HUD).

What are my responsibilities?

  • You are responsible to keep the Insurance and Taxes paid on your home.
  • All property liens, if any, must be paid from the proceeds of the Reverse Mortgage.
  • You must continually occupy your home (cannot be gone for more than 1 year at a time).
  • You must maintain the home.

How Do I Qualify?

  • You and/or your partner are age 62 or older OR qualify for NON-Borrowing spouse guidelines
  • Have enough Equity in your home per the FHA calculations.
  • Plan to keep your home as your Primary Residence.
  • You must have enough income or reserves to pay the taxes, insurance and maintain the home.

A Reverse Mortgage has:

  • No monthly principal & interest payments as long as you live in your home.
  • Lower interest rates set by HUD.
  • You must be able to pay your taxes and insurance and maintain your home. 

How much money will I be eligible for?

Ask us for an analysis.  After a brief conversation with you, we can run an analysis for no cost and give you much more accurate estimates than any online calculator. We will show you all options and then recommend the program that fits your goals.

Each county has a lending limit on appraised values, which are set by the Federal Government. Your available loan amount is determined based upon that county lending limit, your age, the current interest rates and the equity in your home. The older you are the more you will be eligible for.

How do I receive the money?

  • Leave the money in the HUD program and take monthly payments to supplement your income;
  • Leave the money in the HUD program and take funds when you need them like a Home Equity Line of Credit;
  • Take all available funds as a “Lump Sum” disbursement:
  • Or a combination of the above.

What about your heirs/children?

  • Do they want to inherit your home free and clear OR do they want you to enjoy the most income possible today?
  • Most children want their parents to live at the highest standard of living possible.
  • They want their parents to maintain their dignity and independence.
  • When you do pass away, your children will receive the remainder of your estate once the loans are paid off.
  • If there is no equity left in your home, the lender's only recourse is the home value and no debt passes to your heirs or your estate.

    See what our current clients have to say about us...click here  

    Call our team (503)595.1600 or Toll Free at (800) 481-6036 to have a conversation. We can answer your questions and investigate your options.

    Best regards, Kim Dodge, Reverse Mortgage Specialist NMLS 186099 kim@usherfinancial.com 

     

     Usher Financial is a branch of American Pacific Mortgage Corporation and members of these organizations serving our community.

             

    Required Disclosures:  A reverse mortgage is a loan that must be repaid.  These materials are not from HUD or FHA and this document was not approved by the Department or Government Agency.

Usher Financial Group a Division of American Pacific Mortgage Corporation NMLS #1850 #1053700  NMLS #41721
5335 Meadows RD STE 110, Lake Oswego, OR  97035
Toll Free:  (800) 481-6036
Office:  (503) 595-1600
Toll Free:  (503) 595-1610
info@usherfinancial.com
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Usher Financial a Division of American Pacific Mortgage Corporation NMLS 1850 Branch NMLS 1053700
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