With so many mortgage products available on the market, it can be hard to know which ones will serve you best as a homeowner. It can be confusing! Is a reverse mortgage the best option?
You Must Own Your Home
You have to be on title to your home as a borrower and you can have a mortgage too. It is to your advantage to be free and clear of a loan balance, however, if you have one, it helps that it is small enough to be paid off. The reverse mortgage loan is placed in the first position as a refinance. If there is a mortgage already on the house, the reverse mortgage pays it off. The result is no monthly payments!
Few Conditions Apply
Guidelines change all the time. We can always count on change and many conditions apply to this loan. In 2015 financial assessment became the law of the land with reverse mortgages. This means you not only must be 62 years or older, but you must also have enough equity in your home and qualify with enough income and acceptable credit demonstrating you can pay property taxes, homeowners insurance, and other applicable property charges.
Home Ownership Is Relinquished
Not true! You always retain ownership of your home. You remain on title as an individual or in Trust.
Expensive Loan Fees
Closing costs are very similar to a traditional loan including title and escrow fees, bank fees, origination, and appraisal. The reverse mortgage named HECM ( home equity conversion mortgage) also includes an upfront mortgage insurance premium which is financed along with the mentioned closing costs.
To learn more about reverse mortgages, contact your local certified Reverse Mortgage Professional (CRMP) for guidance and expertise.