Questions about Reverse Mortgages from Spokane senior homeowners
Recently I hosted an opportunity for Spokane retirees, baby boomers and senior homeowners to learn about Reverse Mortgages at the Shadle Library. The library is a quiet, neutral location that is convenient for meetings, seminars and classes.
The following are questions and answers about reverse mortgages from that event.
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 Spokane 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 and the older you are, the more money you can borrow.
Q: What does "FHA insured loan" mean?
An FHA loan is a mortgage insured by the Federal Housing Administration, a government agency.The FHA is administered by the Department of Housing and Urban Development (HUD). Borrowers with FHA loans pay for mortgage insurance. The mortgage insurance protects the lender (the bank) from a loss if the borrower defaults on the loan. A reverse mortgage as defined by HUD would not be possible without FHA insurance.
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. If the home is in a trust, we will need to have a copy.
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: 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: We plan to travel and live on the road for several months of the year. How will that affect our 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.
I frequently ask my audience a few questions too.
What are your financial concerns? Financial goals?
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?
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?
And, I always offer copies of my client testimonials.
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. Financial planners, 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. I am a Reverse Mortgage Specialist and I am happy to answer your Reverse Mortgage questions and help you find a solution to your (or your loved one's) housing needs.
Questions about Reverse Mortgages from Spokane senior homeowners.