reverse loan calculator
But don’t get excited about this awesome news, because it’s only increasing 2% which on the average, will boost up benefits 20 to 25 bucks a month.
Just imagine how you could spend that extra money you will be receiving beginning in January of next year. Ummm, let’s see? I can think of a number of thrilling possibilities.
New tennis balls in lots of different colors for your Walker. Or extra money to blow at the Dollar Tree Store where one can find so many awesome deals, especially the junk from China.
Or maybe a couple cocktails at a Denny’s restaurant where you can get a Senior Discount when you order some of their nutritious food.
“Yes”, I am being sarcastic I know. But really only 2% increase?
I may look very youthful in my picture on this website, but I’m a senior too and if I wasn’t working I would be standing on a street corner begging for money and food.
I’m lucky however, because I enjoy being a Reverse Loan Consultant and meeting many wonderful and amazing people who are considering using the funds from a Reverse loan to pay for medical expenses ( I just had a partial knee replacement in August.), home improvement, care giving or maybe simply taking that long “talked about, one day we will go to Maui” and finally doing it.
The number one concern of everyone, but especially seniors is out-living their retirement funds ( If they have any) and not being able to afford to remain in their home for the rest of their lives.
But there is an option, a wonderful option and no one should be “scared” to look into the FHA government insured loan program just for seniors affectionately referred as the HECM.
Its smart to find out if you would benefit from it or not, plus it’s better than being reduced to groveling each month for enough money to pay on going expenses and staying awake at night in a state of fear.
Oh and by the way. I have a Reverse loan on my home that I used to pay off two mortgages I had at the time during the height of the Recession and Financial “crash”. So unlike the majority of any of my competitors, I’m qualified about the advantages of using the loan because of my own experience.
And I’m glad I did. It was a great decision at the time and I don’t regret it.
If I hadn’t taken advantage of using a Reverse mortgage for my own situation, I would have lost my home in a foreclosure as I was quickly running out of money.
In the last several days I have received quite a few panicky phone calls from people who are disparate to complete the counseling that is required by HUD prior to applying for a Reverse mortgage. And the counseling agencies are slammed with requests for appointments and will not be able to provide everyone an appointment immediately when they request one.
And the reason for the panic is due to the pending changes to the HECM program offered through FHA that will take effect on October 2nd.
The changes will be a reduction in the amount of funds to a borrower (Referred to as the Principal Limit) and will fall between 20% to 11% depending upon on the age of the youngest borrower.
And the Mortgage Insurance Premium (MIP) that is paid to FHA to insurance the loan will increase from .50% if the client is utilizing 60% or less of the money from the Reverse loan, to 2.00%
The reason behind these changes is to make sure that the Reverse loan HECM will continue to be an viable option for seniors and to be certain that the MIP pool of insurance will be well funded to cover any loans in the future in the event there is no equity left in the property at the time the loan becomes “due” at the death of the borrower(s).
The Mortgage Insurance Premium Fund will cover the “short” fall and it will not be the responsibility of the Estate to pay the entire balance in full if the property does not have enough equity to do so. And that is the main benefit of paying the MIP.
As of this writing and if you live in California, the latest you can complete your telephone counseling appointment would be tomorrow September 20th. because California requires a 7 day “cooling off” period before you can start the loan process.
I can take your application during this time, but I cannot start the loan process. We have to wait and then we would order a HUD Case # for the borrower and hopefully get it into the system no later than September 30th.
The calls that I have been getting are from people who procrastinated about whether or not to do a Reverse loan and they had months to think about it and now it’s frankly too late to start one.
I will have the new calculations for the pending changes, most likely by the end of the month if anyone wants to contact me about how much money they could receive after October 2nd. 2017.
Like “death and taxes” are a certainty and no one can avoid, you can be certain the HUD will always be “tweaking” the Reverse loan program and this will not be the last time that they will do it.
Just don’t procrastinate.
Reverse mortgage loan applications need the following documents from the borrower and it’s very important that they provide everything that is needed to process their loan in a timely manner.
How quickly a loan funds and closes mainly depends upon the borrower’s cooperation in providing whatever the lender as requested.
- Copy of photo I.D. Typically a current Driver’s License or a Passport
- Copy of Social Security Card or a Medicare Card
- Copy of Social Security Awards Benefit Letter. These are mailed out each December and show how much Social Security income will be received in the following year.
- (2) Months of checking acct statements ( All pages) to show SS deposits or any other payments such as a pension/retirement check.
- Most recent statement for any existing mortgage(s)
- Copy of Homeowners Insurance Declaration Page
- Complete copies of most recent quarterly statements for investments and or 2 months of bank statements. All pages.
- Copy of Trust if one is in place. The new loan will record in the name of the Trust.
- Name and Phone number for the management company if there is a Home Owners Association.
If the borrower is currently employed or receiving income from rental properties, the following items will also be required along with the list above this line.
- (2) Years Federal Tax Returns – All Schedules
- (2) Years W’2’s and any 1099’s
- Most recent Year-to-Date Pay Stub for the previous 30 days.
Yes, I know. It’s a lot of documentation and it’s very similar to what is needed for a traditional loan. However, it continues to quite easy to be approved for a Reverse loan compared other mortgages.
Plus, you won’t have any payments to make on it, so don’t be intimidated by this list.
If the reader has any questions about this or anything else about Reverse loans, please call me. I’m here to help you through the confusion.