Reverse Mortgage - Danielle Rosellison, Security First Mortgage

What is a reverse mortgage?

·         It’s a special type of loan that enables individuals who are 62 years or older to convert some of their home’s equity into tax-free funds

·         Unlike traditional equity loans, you receive payments instead of making them

 

Who is eligible?

·         Homeowner(s) who are at least 62 years of age and occupy the property as their principal residence

·         Eligible properties include single family homes, condominiums and town houses, or a 2-4 unit dwelling

·         The home must be owned free and clear or have a small remaining balance (usually less than 50% of the value of the home) which will be paid off with the reverse mortgage

·         No income, employment or credit requirements are needed to qualify

 

How much can someone borrow?

·         The amount that can be borrowed is based on a HUD formula that factors in the age of the youngest homeowner, the interest rate, the lesser of the appraised home value and the FHA lending limit, and the amount of any existing liens on the home.

 

What are some of the benefits?

·         The reverse mortgage customer retains ownership and lives in their home

·         Cash advances can be used for any purpose

·         Loan proceeds are not considered income and will not affect Social Security or Medicare benefits.  However, your monthly reverse mortgage advances may affect your eligibility for some other programs.  Consult a professional to see how payments might affect your personal situation.

 

What type of interest rate options are there?

·         Reverse mortgage are currently available with either a fixed or variable interest rate

·         Any adjustment in a variable rate mortgage has no effect on the amount or the number of loan advances you can receive, but causes the loan balance to grow at a faster or slower rate

 

What are the tax-free options?

·         Lump sum advances make funds available immediately

·         Tenure plans provide fixed, monthly loan proceeds

·         Line of credit makes funds available upon request

 

What are the costs involved with a reverse mortgage?

·         There are closing costs, which can be financed into the loan.  These may include an origination fee, title insurance, appraisal, mortgage insurance premiums and escrow fees.

·         Typically, there are no out of-pocket expenses

·         The customer is expected to continue to maintain the property, pay real estate taxes and home ownership premiums.

 

How is the loan repaid?

·         The balance due comes from the home sale proceeds or a refinance.  There is no requirement that the home be sold, only that the loan be repaid.

 

For more information, please visit http://sfmiloans.com/reverse-mortgage/.

When: Thursday, September 26, 2013 – 12:00pm – 1:15pm Where: WWN weekly lunch meeting Presenter: Danielle Rosellison, Security First Mortgage