When I talk about Reverse Mortgages, the common reaction is that people who would benefit from them don’t want one. My response is that during my many years in the mortgage industry, no one has ever come to me wanting a mortgage.
- You want to live in a certain home, but don’t have enough cash to pay for it.
- You own a home and want lower payments, or less interest.
- You have equity and want to convert the equity to cash so you can buy something.
These same things apply whether it is a traditional mortgage or a Reverse Mortgage. The critical difference is that with a Reverse Mortgage, the payments are deferred until the borrower no longer lives in the home. Instead of making monthly mortgage payments, the mortgage payments are added to the loan balance.
Successes of Clients We Have Assisted
- Borrowers have come to us for purchase loans when they wanted to move closer to their children. They had equity from the sale of another home, but not enough cash to pay for the home they wanted. By combining their cash with a Reverse Mortgage, they bought the home they wanted.
- Another borrower sold a home that was free and clear and bought a more expensive home in a nicer location with a Reverse Mortgage and no monthly mortgage payment. She just had to pay taxes insurance and maintenance while living in the property.
- One borrower had an $1,100 house payment and about $1,300/month social security. An inheritance allowed her to pay the mortgage down enough to get a Reverse Mortgage, eliminate the mortgage payment and stay in her home.
- Some borrowers need additional income. By converting the equity to cash with a monthly payment for life, the borrower can get the income they need without depending on children or others. This option may be beneficial for children because it can eliminate the need to write a check to help parents each month, and may or may not result in a lower inheritance later.
- A 76 year old lady wanted to move, but did not want a Reverse Mortgage. She could easily qualify for a traditional mortgage. When I pointed out that a Reverse Mortgage might allow her to give up her job, she became interested.
Reverse Mortgage Requirements
The basic requirements to get a Reverse Mortgage are that at least one borrower must be 62 or older, live in the property as a primary residence, complete FHA approved counseling, and satisfy income, asset, and credit underwriting guidelines.
The reasons for a Reverse Mortgage are as varied as the people who get them. Please feel free to contact me at 303-469-1254 to discuss your current situation and what your goals are. I would be happy to explain your options and provide a free, no obligation, proposal.