Reverse mortgages are on the rise in Massachusetts. While many of my friends and colleagues in the lending business have started focusing on loan origination and financial planning for older clients, these transactions are quite different from your typical residential refinance mortgage. It takes a great deal of training to become proficient in advising clients about their options and the best reverse mortgage plan that will suit their needs. Folllowing is some general information concerning reverse mortgages and an attorney's perspective (that would be me) on the features of this type of loan product:
Reverse Mortgage defined: A reverse mortgage is a type of loan available to persons 62 years of age or older that allows the mortgagor to borrow money against the equity in their home. These mortgages are useful to older clients who wish to supplement their income or cover expenses that their retirement or social security income will not meet. The best thing about a reverse mortgage is that YOU DO NOT HAVE TO PAY THE LOAN BACK as long as one of the borrowers remains living at the home, pays the taxes and insurance and keeps the property in good condition.
Qualifying for a reverse mortgage: It is relatively easy to qualify for a reverse mortgage; your current income, credit history and debt-to income ratio are not at issue in a reverse mortgage. You simply must be 62 years of age or older, own a 1-4 family home in which you live, you must have equity in your home and your home must met certain condition standards.
Loan amounts and payment options: Recently reverse mortgage limits have increased to $417,000.00! How much an individual can borrow is based upon th following criteria: theage of the youngest borrower on the loan, the value of the home and the current interest rate. Once you have decided upon the maount of money that you wish to borrow there are several payment options to consider: a lump sum payment to pay of existing debt/mortgages on the home, set monthly payments to the borrower, a line of ccredit available to the borrower for future use or some combination of the three.
The effect that reverse mortgages have on other benefits: Proceeds from a reverse mortgage are not considered income and will not affect some benefits such as Social security. There are other needs based programs that may count reverse mortgage proceeds towards income and a borrower may not be eligible for ome needs based programs.
The reverse mortgage process begins with counseling. Please feel free to contact me by email or telephone with questions about reverse mortgages to determine whether or not a reverse mortgage is the right loan product for you. I am a real estate closing attorney who has closed numerous mortgages for borrowers including reverse mortgages with several different lenders. I would be happy to refer you to a reverse mortgage specialist that I have had good dealings with. Initial consultations with my office are free and I am willing to travel to clients homes to conduct reverse mortgage closings throughout Massachusetts.
Disclaimer In accordance with rules established by the Supreme Judicial Court of Massachusetts, this web site / blog must be labeled "advertising." It is designed to provide general information for clients, prospective clients and friends of the firm and should not be construed as legal advice, or legal opinion on any specific facts or circumstances. This web site / blog is designed for general information only. The information presented at this site / blog should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.
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