A reverse mortgage is a loan that enables homeowners who are at least 62 years of age to convert some of their home equity into cash, a line of credit, or to finance a home purchase with the freedom of no monthly mortgage payments if they live in the home as their primary residence. Unlike a traditional home equity loan or home equity line of credit a reverse mortgage doesn’t have to be re paid until the last surviving borrower or an eligible non-borrowing spouse no longer lives in the home, or the home is sold. If the borrower does not meet the loan obligations like paying the property tax and home owners insurance and maintaining the condition of the home then the loan will need to be repaid in these cases also. Reverse Mortgage can be a great option for that person looking to free up cashflow with the equity in their home as part of their retirement plan. If you want to start the process of getting a Reverse mortgage you should contact one of our Loan officers on the Northwest Mortgage Team. If you are in Bonney Lake, Graham, Sumner, Spanaway, or Tacoma call us now at 253-840-5600!
Am I Eligible for a Reverse Mortgage?
To be eligible for a reverse mortgage all title holders must be 62 years of age or older. The borrower must plan to occupy the property as their primary residence. The property must meet FHA standards for the property appraisal. You must have an enough equity to qualify, this is a formula that uses your age and the current equity in the property to figure out if you have enough equity. If you are short equity you can always put more cash toward your loan balance to qualify for a reverse mortgage.
Will the Bank own my Home if I have a Reverse Mortgage?
No, the bank will not own your home. You will remain the owner if the terms of the Reverse Mortgage are met. Which means if stay current on property taxes and home owner’s insurance and you maintain the home and occupy it as your primary residence you can remain in the home with no payments to make until the last eligible spouse leaves the home.
How much Money can I receive from a Reverse Mortgage?
This depends on a few factors. The first is the age of the youngest borrower when you obtain the reverse mortgage. The next is the amount of current equity you have in the property. The 3rd is the type of reverse mortgage you choose. A lump sum payment or monthly payments like an annuity or you can just set up a line of credit to use when extra funds are needed. All these things factor into what amount of money you can receive from obtaining a Reverse Mortgage.
What are the costs of a Reverse Mortgage?
In addition to interest costs, the costs can include a property appraisal fee, origination fee, closing costs (title fee’s and other 3rd party fees), mortgage insurance premium, servicing fee and a modest charge for Reverse Mortgage counseling. While closing costs can vary based on the type and size of the loan, they’re the same as those for any traditional mortgage. You can roll most of the up-front costs into the loan which will minimize any out of pocket expenses.
What should I do if I want to get a Reverse Mortgage?
If you want to start the process of getting a Reverse mortgage you should contact one of our Loan officers on the Northwest Mortgage Team. We can guide you through the process. If you are in Bonney Lake, Graham, Sumner, Spanaway, or Tacoma call us now at 253-840-5600!