Las Vegas Undressed

Reverse Mortgages and Your Home

Mark Clawson - 702-351-7912 - markvclawson@gmail.com

First of all, you have to look at where you are in your life. You may have the means to restructure your assets and avoid the use of a reverse mortgage. There are many things to consider and it is important to take your time before you jump.

That being the case, to qualify for a reverse mortgage you need to be 62 years of age. Your home needs to be your principal residence, and it should be free and clear or have a small mortgage that can be paid off with the proceeds from the reverse mortgage. You have to make sure that your property meets the standards set by HUD and you will need to need to discuss the program with a HUD approved counselor.

I think the counselling program makes a lot of sense, you need to know what you are doing and feel comfortable.

I have been referencing the HUD program because I think it makes more sense than a privately insured reverse mortgage. The HECM Reverse Mortgage loans (HUD program loans) generally provide the largest loan advances of any reverse mortgage. They also give you the most choices in how the loan is paid to you and you can use the money for any purpose. They can be costly, but HECMs are generally less expensive than privately-insured reverse mortgages. Other reverse mortgage may have smaller fees, but they generally have higher interest rates which means less money to you.

Many retirees are cash poor and home rich. The idea behind a reverse mortgage is unlocking the value in your home. Your payments of principal have created an equity pool that you can access.

A reverse mortgage is not an inexpensive loan. That is why it is important to review all of your other options. If those other options are not available then it can make sense. The loan fees are based on the maximum credit limit for the HUD lending area for the government Home Equity Conversion Mortgage (HECM). This means that you may be paying fees on a loan amount that is higher than your actual loan. It is important to have a trusted advisor who you can count on to give you a fair loan fee.

The loan also has an up-front mortgage insurance fee of 2% of the maximum lending limit. This mortgage insurance insures you that you will continue to receive payments even if your mortgage lender were to go out of business. You then have your normal costs of the appraisal, escrow, title fees, etc., and you get the idea.

While the costs seem high, the insurance on these loans are more for borrower protection than any other loan the government insures. This insurance protects the borrowers in two ways. First, if a lender ever goes out of business or fails to pay a borrower in a timely manner for any reason, HUD steps in and makes certain that the borrower receives a steady stream of payments. As you read about lenders going out of business, with a HUD insured loan, you never have to worry about whether or not your payments will be made to you. Also, HUD will insure that the borrower will never owe more than the property is worth regardless of how much money the borrower receives over the years, how much interest accrues, or what property values do in the future. Everyone hopes that values will continue to go up, but if the values should fall, the senior borrower and their heirs will never owe more than the property is worth.

There is an article entitled Top 10 Things You Should Know If Your Interested in a Reverse Mortgage on my menu bar or you can just click here. This should answer most of your questions. Though I do realize that everybody is an individual and their circumstances will be different.

What is mportant to know is that I am willing to work with you in any way that I can. I pride myself in being a trusted advisor and if this program doesn’t make sense for you I will let you know. This is all about helping people and finding some peace in life.

Mark Clawson - 702-351-7912 - markvclawson@gmail.com