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A Reverse Mortgage is.. Definitely not for everyone! 

It may surprise you to hear a reverse mortgage lender saying this but it is true.  The loan is intended to be the last loan you will ever need and not a short term financial instrument.

Borrowers looking for a short term loan may be better suited for a different type of financing as reverse mortgages require mortgage insurance, origination fees and third-party fees that all must be paid up-front making the loan impractical for a short term solution. 

However, for those borrowers who want to remain in their homes and need extra income or cash to do so, a reverse mortgage may be exactly what you need.  There are a few questions to ask yourself:

A Reverse Mortgage is designed to be the last loan you may ever need.  It works opposite a traditional mortgage. Rather than making monthly payments to pay off a loan as is the case with a traditional or forward mortgage, with a reverse mortgage the equity in your home pays you. Since there are no monthly payments, there is no income or credit qualification required.  

The loan is safe and is Government-Insured by the Federal Housing Administration (FHA), a division of the Department of Housing and Urban Development (HUD). This loan was signed into law as a Government-Insured product by Ronald Reagan in 1988 and since its inception, it has helped hundreds of thousands of senior homeowners safely access the equity in their homes to help them better enjoy their retirement years. 

Reverse mortgages did not originate in 1988, there were previous versions but they were flawed and contained provisions which could hurt homeowners. Many of those misconceptions about the current government product linger still today.  But you can rest assured that the Home Equity Conversion Mortgage (HECM or “Heck-um”) insured by FHA is an excellent opportunity for seniors to access the equity in their homes without the pitfalls of the previous programs.

Borrowers have a choice of how they can receive their money.  After the current liens on the property are paid off, borrowers can choose a number of different ways to get their cash.  You can choose to receive the funds all at once, in monthly installments, as a line of credit you can access as you choose, or a combination of any or all of the above.  Regardless of how you choose to receive your money, you never have to make a monthly payment for as long as you live in your home.

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Is the Reverse Mortgage right for you?

“I don’t think a reverse mortgage is for me, I planned for my retirement”!

Does this sound like something you are thinking or have thought?  Then you are not alone.  We have had so many borrowers tell us that they thought they had planned adequately for their retirement and never thought they would need a reverse mortgage.  Some even felt embarrassment or shame that the retirement plans they had so carefully made were coming unraveled. 

It’s not your fault that borrowers are living longer, healthier lives and are therefore more active today than at any time in the past.  It’s not your fault that the costs of living have risen above most pensions and that many pensions and savings have been adversely affected over the years by financial maladies in the stock markets and other investment vehicles. 

It’s not your fault that the cost of living has risen much more quickly than the return on the funds that you set aside.  John Lennon said “Life is what happens to you while you’re busy making other plans”.  Well that is true with your retirement as well. 

Regardless of how well you thought you planned, life has a way of throwing you a curve ball and soon everything ends up getting in the way of those plans.  Let the specialists at All Reverse Mortgage Company show you how a reverse mortgage just may help you get back on the right track toward a financially independent retirement.

A reverse mortgage can help you stay in your home and since you can elect how you receive the money, you can choose to receive monthly payments to augment your income, you can receive a lump sum of cash to spend however you choose, or you can keep the money in a line of credit available to you at your request. 

Unlike Home Equity Lines of Credit offered by your local bank,  the reverse mortgage cannot be closed or frozen if the bank decides your income or the property’s value is not what the bank thinks it should be.  Say goodbye to worries about the rising cost of food, gas or energy bills.

Many senior homeowners have utilized their reverse mortgage funds for a variety of needs such as medical and prescription assistance.  Others have chosen to update their homes either to make them more accessible or more “senior-friendly”.  Still others have determined that they wanted to use funds to travel or for other leisure activities. 

In these economic times, it is also not uncommon for senior homeowners to again look to see how they can help their families, including college tuition for grandchildren.   Whatever your reasons might be, a reverse mortgage may be the tool that allows you to live the lifestyle you deserve and stay in your home when circumstances would otherwise require you to leave. 

Besides all the great things people can do with the proceeds of a reverse mortgage if their home is currently paid off, there is another category of senior borrower who also can benefit greatly from a reverse mortgage.  That is the senior homeowner who still has a mortgage payment.  It is another common misconception that your home must be owned free of current loans to get a reverse mortgage.  A reverse mortgage can be used to pay off existing mortgage loans and other liens.

You can eliminate existing loans and more importantly the monthly payment that goes along with them with your reverse mortgage.  Because a reverse mortgage does not require any income or credit qualification, you can even get a reverse mortgage if you are currently behind in your mortgage payments and in fact, we have gotten borrowers’ loans paid off in some instances just days before they were scheduled to go to foreclosure sale! 

The caring specialist who worked with one couple who had previously thought they were beyond help was able to get the entire mortgage processed in just 4 days and closed in 8 with the help of our lending partners!  While we do not guarantee 8 day closings on all reverse transactions, isn’t it nice to know that you are working with a company who can really perform when the chips are down? 

Whether you are thinking about your retirement and how to be more comfortable or how to stay in the home you love, a reverse mortgage might just be the last loan you will ever need and we would welcome the opportunity to help you achieve financial security in your retirement years.

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Reverse Mortgage FAQ's

A. No.  The existing liens do have to be paid off but you can receive the difference or even bring in the balance to close the loan if you wish to eliminate a mortgage payment.

A. The program is based on a number of factors and a calculator is used to determine eligibility.  You can go to the Reverse Mortgage Calculator or a trained specialist can tell you exactly what you and your property will qualify for.

A. Single family residences including HUD approved Condos, PUD’s, and manufactured homes meeting HUD guidelines, 2 – 4 owner occupied residences.

A. No.  You and your heirs always own your home just like any other loan. 

A. You can live in the home payment-free as long as you live in the home, pay your taxes and insurance and maintain the home in a reasonable fashion.  The loan becomes due and payable when the last remaining spouse no longer occupies the home or you sell your home.  You or your heirs are afforded an ample time period to repay the obligation.

A. A reverse mortgage is not an inexpensive loan.  In addition to normal costs such as an origination fee, appraisal, title, escrow, etc., you must also pay for HUD mortgage insurance. 

That is why this loan is intended to be the last loan you will ever need and not a short-term instrument.  These costs can usually be included in the loan, except in the case of the purchase reverse mortgage program.

A. Part of the HUD insurance guarantees that you and your children will never have to pay more than the property is worth in a bona-fide sale. 

If you or your heirs attempt to sell the home after your reverse mortgage and an arms-length sale nets less than the amount owed on the reverse mortgage, you or your heirs will not be responsible to pay that portion which the sale did not cover. 

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