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January 21, 2021 Reverse Loans No Comments

Higher Reverse Loan Amounts

Effective this month and year, the HUD Lending Limits for FHA Reverse loans were increased from $765,600 to $822,375.00

This is quite a large increase over previous years and could possibly make a difference for senior borrowers who will now have more access to their home’s equity, than they would have had last year in 2020.

The Lending Limit caps a home’s value at this figure, even if a property is worth more, the reverse loan amount will always be calculated on the Lending Limit or the appraised value of the home, whichever is less and the age(s) of the youngest borrower.

For some seniors, this increase can make it now possible to do the loan, because the higher value will possibly provide them a larger loan amount that can pay off an existing mortgage with a high balance, whereas previously, the loan may have been not been adequate enough for refinancing an existing mortgage.

Mortgage interest rates are at the lowest they have ever previously been, and that includes the interest rates on reverse loans, too. And in addition to very low rates, home values have increased substantially, creating more equity for many homeowners.

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Whether it is Fixed loan or a Line of Credit, FHA HECM, or one of the Jumbo reverse loans, now is the best time to apply for one,take advantage of low interest rates, and also the increased value of your home.

Use a reverse loan to increase your cash flow and create a safety net for the future, and have funds for unplanned expenses, and gain peace of mind.

November 4, 2020 Reverse Mortgages No Comments

Reverse Loan; Fixed or Adjustable?

Reverse loans offer many choices to senior borrowers, but it can be confusing to decide which one to use because they are different from traditional mortgages, no mortgage payments are required and they are easier to qualify for on a fixed income.

And they also do not have a loan term. Reverse loans are still a mortgage, but unlike what we are all accustomed to. They are different, but similar in that both are liens against the subject property.

In the past when applying for a mortgage to buy a home or refinance, the most popular one was the Fixed rate, because you always knew what your mortgage payment would be, unlike an Adjustable Rate Loan where it can change and possibly increase over time.

And everyone always shops for the lowest interest rate, but that meant you had to pay more Points to get a low interest rate, but if you chose a higher rate the Points would decrease, or possibly be a “Zero” Point loan.

However, with a reverse loan, it is entirely different. There are no Points, but an Origination fee and sometimes, there isn’t any fee at all.

The other difference is how the selected interest rate determines how much money you will receive from a reverse loan. Sometimes the lower interest rates provide less money, and cost more, but if the loan is being used to pay off an existing mortgage and freeing up more cash flow, then that would be a consideration.

And then there is the question whether or not to chose a Fixed interest rate or the HECM Line-of-Credit. is the borrower paying off a large mortgage? Then the Fixed rate might be the best choice.

But if there is a small mortgage or none at all, then the HECM Line-of-Credit would be the preferable choice, as it will give the borrower more flexibility with their funds, plus it has a “growth” feature that will provide additional funds in the future.

Anyone reading this is most likely thinking, it’s confusing. And it is. And that is exactly why it is important to meet with a Reverse Loan Consultant who can provide you with a personalized proposal and eliminate some of the confusion.

In the midst of Covid-19 and the uncertainty of the future, more seniors are now actively investigating the benefits of a reverse mortgage and many have applied for their own loan to preserve their savings and have a financial “safety net”.

And maybe you should, too.

September 16, 2020 Reverse Mortgages No Comments

Unplanned Life Events

We can never know what might or could happen in our lives from day to day. Recently it has been the pandemic of Covid-19 that has killed almost 200,000 Americans as I am writing this and the extreme fall-out from it which has created a massive amount of people who have lost their jobs and businesses.

Then there are the weather events. Massive killer fires in the western half of our country and the East and the South have to face more hurricanes and flooding. No one feels safe anymore and if you are a senior, even less so.

And that is why more seniors are seriously considering using a reverse loan so that they have money that is “banked” and available to them no matter what happens.

One example would be they have an insurance claim for damage to their home and the insurance company is fighting with them over it, at least they have money in the meanwhile to take care of their personal needs until they reach a settlement.

Add in isolation for seniors due to Covid-19, and anxiety about money is not a positive situation, but at the least having enough money reduces some of it, and about how to pay for food, care giving and other monthly expenses.

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If a senior has been relying on income from being employed to pay their mortgage payment, but now they are unemployed, they could refinance into a reverse loan that doesn’t have a monthly payment.

But reverse loans have a reputation for being expensive, but are they? They have the same costs as a traditional loan, but many people have heard they are expensive, but in truth, they are not.

Now more than any time in the past, is the time to learn about reverse loans, how much money you could receive, and if doing one is your best option to eliminate your worries and fears about the future.

Contact me for a chat about your situation and find out if a reverse loan be of value to you.

April 3, 2020 Reverse Mortgages No Comments

Covid-19 and Seniors at Risk

It has been a while since I have written anything in my blog, because like everyone else, my life was turned upside down with the pandemic and it’s destructive swath across the world, taking lives, ruining economies, creating fear, anxiety, and uncertainty.

Anyone who had a 401-K, some sort of a retirement plan or at the least, a savings account have seen them dashed, drained away and depleted within days and the Stock Market will continue to reel in uncertainty for most likely, a very long time.

Eventually, we will get through this terrible time, but if you are a senior, you may not have the ability to wait it out until the markets recover and are very worried about running out of money. I am here to say, that this is the one time a senior has an advantage over younger people because they have an option that younger people don’t have.

If a senior age 62 or older, lives in their home (even if they have a mortgage on it), they could apply for a reverse loan. However, too many are afraid of them because they think the Lender will end up owning their home (false), they have to still make payments (false), there is “fine print” to trick them (false) and they are “too good to be true”. (False again.)

The FHA HECM is the most regulated mortgage in the lending industry, to protect seniors from financial abuse.
Anyone who wants to apply for a reverse loan must complete telephone counseling with a HUD-approved Counseling Agency.
There are no mortgage payments, however, the borrower must continue to pay property taxes, Homeowner insurance and keep their home in good repair.
There are no restrictions on how the borrower uses their funds, except they are discouraged from buying annuities or other investment products.
They can remain in their home for their entire lives and leave it to their estate.

The reverse loan industry is seeing an increase in loan applications at this time because obviously money from a reverse loan will give them the safety and security they need and take away the fear and anxiety about running out of money.

The loan is safe, well-regulated and an ideal solution for all senior home-owners to consider right now. From the time the HUD Counseling is completed, the loan processing time takes about 45 days, however, it might begin to take longer with the increase in applications.

Although I am located in California, anyone who reads this may contact me if you have questions. I can point you in the right direction for a reverse loan consultant in your state.

Don’t hesitate. If you have a home or Condo and you are old enough, you have this opportunity for financial security. Look into a reverse mortgage. Now.

January 21, 2020 Reverse Mortgages No Comments

Options for Receiving Money in a Reverse Loan

The FHA HECM reverse mortgage is a Line-of-Credit that allows the homeowner and borrower three options to receive their money. It is very flexible and the borrower can change the terms at any time they may want to, but what are they?

One option ( and most borrowers will choose this), is to have money wire transferred to their checking account when the loan closes and funds.

Or they may wish to receive a tenure payment that will be funded to them every month for the rest of their lives.

Or a Modified-Term payment that I discussed in the previous post. Regards of which option may be used, they all can be changed at any time or do a combination of them. Whenever the borrower wants to make a change or receive additional funds from their account, all they have to do is contact the Loan Servicer and for a small fee of $25-$30 they can request a change.

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Maybe they want to receive their money every month for the rest of their lives. This would be the Tenure option and it will continue to be deposited into their account indefinitely as long as they occupy the property. Even if the funds in the reverse loan are exhausted.

Regardless of which option or combination a borrower may utilize, the borrower is required to live in the home, pay the property taxes and Homeowners Insurance and keep their home in good repair.

And what is the most common choice used? Cash at the close of the loan and request funds from the Line-of_credit when they want more money in the future.