Reverse Mortgage Questions for Vancouver WA Retirees
I frequently conduct Reverse Mortgage seminars and of course I encourage questions.
Here are a few Q & A's from a recent event.
Q: What does HECM stand for?
The term is used exclusively for FHA reverse mortgages. It stands for Home Equity Conversion Mortgage. Home equity is converted to cash with an FHA insured reverse mortgage.
Q: Who determines the value of my home?
An FHA approved appraiser is hired to evaluate your home and determine the value. You pay for the appraisal up front with your credit card and you receive a copy of the appraisal. I have no influence over the value of your home or the appraiser.
Q: I plan to travel and live on the road for several months of the year. How will that affect my reverse mortgage?
As long as your primary residence is your home, there is no worry about travelling. You will get a letter from the lender once a year asking that you verify you are still residing primarily in your home.
Q: Can the lender take my home if I outlive the loan?
You cannot "outlive" a reverse mortgage loan. You do not need to repay the loan as long as you or one of the borrowers continues to live in the home and keeps the taxes and insurance current. The bank cannot collect more than the value of the property at the time it is sold.
Q: How much money can I receive from a reverse mortgage on my home?
The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home. First, of course, any existing mortgages are paid in full before distribution. Currently the FHA reverse mortgage caps the appraised value at $625,500 for homes in Vancouver WA and across the nation. Keep in mind, the lender does not lend 100% of the value of your home....only a portion based on certain criteria. Generally, the more valuable your home, the older you are, and the lower the interest rate, the more money you can borrow.
Q: Can I leave my home to my kids?
When you leave your home permanently you or your estate will repay the loan and accrued interest and charges. Typically your home is sold; most children do not need it or want it. The remaining equity in your home, if any, belongs to you or to your heirs similar to a home with a conventional mortgage.
Q: What about credit?
Currently, a credit report is ordered for the sole purpose of finding any existing liens against your home. Your credit score is not an issue. Very soon, guidelines will be changing and credit will matter. There is a need to insure that the borrower has enough money to continue to pay taxes, insurance, and to maintain the home.
Q. My home is in a living trust. Does that matter?
No. The lender may ask that some language be clarified to protect the lender's interest in the mortgage.
Q: What kind of documentation do I need to provide?
Driver's license and Social Security card, Medicare card, or other Social Security proof. We will also need to know the name and phone number of your homeowner's insurance agent so that we can get an insurance binder. If there is a deceased spouse, the lender may require a copy of the death certificate.
Questions I frequently ask my audience:
Do you like where you live and do you want to remain in your home?
Do you have a child with special needs who wants to remain in the home after your deaths?
Do you like making house payments?
What are your financial concerns? Financial goals?
Do you know of any loan available today with conditions such as: Don't bother to make any payments until you leave the home permanently?
Would you like to read my client testimonials?
Caregivers, children, real estate agents, elder law and estate planning attorneys should all take time to find out what a reverse mortgage is all about. A reverse mortgage equals peace of mind. Staying in one's home offers privacy and dignity to aging Americans. For many their home is their only asset, and they should be offered a sensible solution for staying in their home. I am a Reverse Mortgage Specialist and I happy to answer your Reverse Mortgage questions and help you to find a solution to you or your loved one's housing needs.
Reverse Mortgage Questions for Vancouver WA Retirees
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