11990 Grant St., Suite 550 Northglenn, CO 80233
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11990 GRANT ST., SUITE 550 NORTHGLENN, CO 80233
5280 Magazine - Five Star Mortgage Professional Award Winner Since 2013
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303-668-5891
Understanding Reverse Mortgages
Net Admin • January 17, 2020
Your home represents many things: safety, independence, and memories to name a few. Now, with a reverse mortgage, it can also be a source of income. A reverse mortgage can provide a way to meet financial needs and ensure that you can stay in your home as long as you choose. Let’s take a look at some basic questions and answers to get you up to speed on the reverse mortgage and if it might be an option for you.
What is a reverse mortgage?
It is a loan against your home that does not have to be repaid as long as live in your home.
What is so unique about the program?
The borrower is NEVER required to make a monthly payment. It is a loan in “reverse.” Instead of making payments, you can receive them.
Will this loan affect my Social Security or Medicare?
No, absolutely not.
Will I have to pay income tax on the money I receive?
No. The money is considered proceeds of a loan and not taxable.
How much do I qualify for?
It depends on your age(s) and the value of your home as well as the interest rate at the time of closing. The older you are the more money you get.
Will I have to pay an up-front application/appraisal fee?
At Universal Lending you will not have to pay these fees out of pocket; they are included in your loan.
What are my responsibilities?
You and/or your spouse must live in the home, keep the property in good condition and make sure your taxes and insurance are paid on a yearly basis.
Do I have to own my home free & clear?
No, even if you have an existing loan, reverse mortgage proceeds can be used to pay the loan in full and you would never have another house payment.
When is the loan due?
The loan is due when you and your spouse no longer live in the home as your primary residence.
Is this a safe loan?
Yes. It is an FHA-Insured loan administered by the federal government.
Are reverse mortgages expensive?
Because of recent program changes, some reverse mortgages are less expensive than in years past.
Will I still own my home?
Yes. You DO NOT give up title to your property and you can sell and move at any time.
Can my wife and I get a reverse mortgage if I am over 62 but she is not?
Yes, only one borrower has to be 62 or older.
What questions should I ask a potential lender?
Ask if they process and underwrite their loans in state; you want your paperwork done locally. Make sure your lender has years of experience and ask how long they have been providing reverse mortgages. Ask if their loan officer will meet you face to face to explain the paperwork.
How can I be sure it is right for me?
A meeting with a HUD-approved housing agency is required. They will sit down with you (and your family if you like), to explain this program so you can make an informed decision.
Can I purchase a new home with a reverse mortgage?
Yes, the program is called Reverse for Purchase. It’s a great option for customers who want to downsize, move closer to their kids or buy a home with no outside maintenance and have no house payments.
So those are some of the basics. Begin with these question and answers to determine if a reverse mortgage might be an option for you. When you are ready to speak to an experienced Colorado mortgage loan officer, contact Popish Mortgage Group today!
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5280 Magazine Five Star Mortgage Professional Award Winner every year since 2013
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