A Reverse Mortgage is a Loan Program that allows you to use the Equity in your Home to pay your Mortgage Payments. For the most part my investors only offer Reverse Mortgages for California Property.
You may be able to receive cash in addition.The Primary Reverse Mortgage is an FHA/HUD backed loan. That is to say that you are guaranteed to receive the Loan Payment Program you selected.
This Reverse Mortgage loan is for people with limited income that want to stay in their home, payment free, until they pass away. However, you can take out a Reverse Home Mortgage Loan, and still be free to sell your home at any time.
It is a fabulous program for Senior Citizens, and I am the Senior Citizen Loan Expert. For an Example of how a Reverse Mortgage Works: My client's name was Frank. He lived in the mountains and owned his home worth $160,000. He only owed $33,000 on his house.
But, cash flow was a problem for him. He had limited fixed income with Social Security. He paid $300 a month for his home, plus taxes and insurance. The Reverse Mortgage could help him in this way:
1) He would no longer have the $300 a month payment. That would be paid from the equity in his home.
2) He could either receive another $300 a month, or take $50,000 in cash, or use a $50,000 credit line.
He decided to use the Credit LIne because he had Govenment Medical Insurance that would stop paying for his Medical Bills if he had too many assets. This way he had it all. Because of getting a Reverse Home Mortgage he could live in his home for the rest of his life, never have to make principal and interest payments, and have lots of financial freedom because he had a credit line of $50,000 to pay for the items needed or wanted.
The Government Backed Reverse Mortgages changed the way he lived his life, and very much for the better.
This is a quote from the California Association of Mortgage Brokers regarding pending legislation for Reverse Mortgage Loans and Borrowers. We hope very much that this legislation passes. (9/06)
The third piece of legislation, SB 1609, introduced by Senator Joseph Simitian, D-Palo Alto, helps protect seniors when they enter into reverse mortgages. "It is our responsibility to help protect those who are most vulnerable in our society," Schwarzenegger said in a statement. The bill prohibits a reverse mortgage lender from accepting an application or assessing any fees until the borrower has received independent counseling regarding the loan. It also prohibits a lender from requiring a borrower to purchase an annuity as a part of the reverse-mortgage transaction and requires a reverse-mortgage contract to be translated into Spanish, Chinese, Tagalog, Vietnamese or Korean if the contract was primarily negotiated in one of those languages.
Typically, a reverse mortgage allows homeowners 62 and older to receive either monthly payments or one lump sum from the property's equity without having to sell the property or make monthly repayments. The reverse mortgages also don't have to be repaid for as long as residents do not move, but they must be repaid in full, inlcuding all interest and other charges, when the last living borrower dies, sells the home or permanently moves away.
The borrowers continue to own their homes and are responsible for property taxes, insurance and repairs. "Older Californians considering reverse mortgages as a source of retirement income will be provided greater consumer protections as a result of SB 1609," Corporations Commissioner Preston DeFauchard said in a statement.
To discuss your particular fact situation or apply for this loan, please call me or email me at Judy@SellensLending.com
If you have a Senior Citizen Organization that would like to have a Reverse Mortgages Seminar given in their meeting place, we would be happy to do that as long as distance does not interfere.
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Contact Judy Sellens at www.SellensLending.com
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