There are two types of reverse mortgages currently available: the FHA-insured HECM (Home Equity Conversion Mortgage) that is frequently advertised on TV, and a new proprietary loan referred to as a Jumbo Reverse. Jumbos are primarily designed for people who have homes worth over $800,000 or non-FHA-approved condos worth more than $500,000. Jumbos allow homeowners to access more of their wealth than is possible with an FHA product.
We’re often asked, “What is reverse mortgage counseling and why do I have to do it?”
People worry they won’t pass counseling or they’ll have to meet someone or they’ll be asked uncomfortable questions.
This article will eliminate the mystery and fear around counseling and help you pass the counseling questions asked at the end.
Retirees are going to have to access some of the wealth trapped in their home. The question is how? Using a conventional HELOC (home equity line of credit) can be especially risky for retirees.
In the past two years, there has been much favorable press around reverse mortgages both from high profile news sources (Wall Street Journal, NYT, Forbes, Bloomberg) and Ph.D. academics discussing a reverse mortgage as a wealth management tool. You can find these articles on our Facebook page. Despite the coverage, there is a lot of confusion around what happens at the end of a reverse mortgage. We're frequently asked the following...
Getting a reverse mortgage is not like the old days. Since 2014, there are more rules, more paperwork, and borrowers must now qualify to get a HECM (Home Equity Conversion Mortgage). These changes were designed to protect seniors and tax payers by reducing defaults. Most people do not understand reverse mortgages; even fewer are aware of these recent changes. Most people who assume that because they have a lot of equity, they can automatically get a reverse. They are surprised and frustrated when they find out that’s no longer the case.
If you’re trying to cut a board in half, a hammer is a terrible tool. This analogy applies to most financial products or strategies – the pros and cons depend on the context.
We’re often asked, “At what age can you get a reverse mortgage?” The quick answer is 62, however, when more than one person lives in the home, the answer is more complicated.
Below we'll explore the details, including recent changes by HUD (the Department of Housing) which were implemented to protect younger spouses who aren’t on the loan.
How to intelligently shop for, compare, and get an FHA-insured reverse mortgage.
Our passion is helping seniors overcome the challenge of not having enough income or cash. The financial tool we specialize in is a reverse mortgage. We help homeowners, home buyers, and professionals who refer to us.
Frequently, we hear thoughtful questions like:
• How do I know if this is suitable or right for me?
• What does it take to qualify or would I be eligible?
• What are the benefits, costs, pros and cons?
• What are the steps and how long do they take?
This article includes two videos: 1) an Overview of the process; 2) an Explanation of each of the steps, and an opportunity to download a one-page Map that shows approximately when steps occur.
Most people approach borrowing and debt very transactionally, which is not their fault because they've never been trained how to view debt as one part of a comprehensive wealth management plan.
Think of a well-constructed plan like a wheel with six spokes: 1) income, 2) assets, 3) liabilities (debt), 4) taxes, 5) legal, and 6) risk (insurance). If one spoke is longer or shorter than the others, the wheel will be out-of-round and progress will be slower and more difficult than it needs to be.
When financial planners, Realtors, home owners or buyers contact me about how to get a reverse mortgage, I encourage them to step back, take a look at the bigger picture, and begin with the end in mind. Where does the client want to be in 3, or 5, or 10 years? How does each spoke affect the others?
There are several myths about reverse mortgages: the lender will take your house, they’re very expensive, the kids won’t get anything, etc. Ongoing and recent changes by HUD to the FHA-insured reverse mortgage program have enhanced its long-term stability and suitability as a solution to one of America’s biggest demographic challenges – bridging the gap between longer lifespans and insufficient retirement savings. Here we will consider the claim that reverse mortgages are expensive.
Financial planners, CPAs, and estate planning attorneys continue to ask about the new HECM requirement called Financial Assessment and how their clients can Qualify for a Reverse Mortgage.It has been described as the biggest change to ever happen to the reverse mortgage program.
Now, unlike before, lenders must analyze the borrower’s credit history, liabilities, debts, and income to determine their willingness and capacity to meet their financial obligations to qualify for a reverse mortgage.
