Introduction to Reverse Mortgages
With thousands of Americans retiring each day here in the United States and savings rates, pensions, IRA dividends and investment income reaching levels of diminishing returns, a Reverse Mortgage may just be the answer for many households.
A Reverse Mortgage is by definition the opposite of a traditional mortgage. A traditional forward mortgage is a lien put on your home that requires monthly payments of principle and interest be paid to the lender to service this debt.
A Reverse Mortgage allows an eligible homeowner to actually receive payments from the bank FOR LIFE, as opposed to send a payment to the bank each and every month. The program allows a homeowner to use a portion of their home’s equity to actually receive tax free income from the bank without having to sell the home, give up title to the home or incur any monthly payments.
Who is eligible for a Reverse Mortgage?
Eligibility requirements are quite simple:
- The homeowner must be at least 62 years of age
- When there are two owners, both must meet the age requirement
- The property must be their primary residence, it cannot be investment property or a second home
- The property can be a single family residence, 2-4 family primary residence, condominium or manufactured housing
Is a Reverse Mortgage Safe?
This is one of the most popular questions we get and we want you to know that they are safe, they may not fit the needs of every 62 year old but, many will find the benefits of a Reverse Mortgage are significant.
Thousands of homeowners each year are using reverse mortgages as a source of extra income, to eliminate mortgage payments, pay for the cost of health care, make home improvements and establish cash reserves in case of emergency.
In fact, you can use the money you receive from a reverse mortgage to do anything you wish, there are no restrictions, it is your money and it is your home.
That’s right, it is still your home, even after you obtain the reverse mortgage. It is a common misconception that a reverse mortgage is a transaction where the lender will give you some money and…then take your house.
This is simply not true at all.
You never lose title to the home, your heirs will receive any equity in the home, the bank will never kick you out of your home.
Federal Oversight and Involvement
The Federal Government did recognize that a program like this could be open to abuse therefore, they established the One and Only Reverse Mortgage Product available today, it is called the HECM Program.
HECM stands for Home Equity Conversion Mortgage and is fully insured by the Federal Housing Administration and the Department of Housing and Urban Development. Since the inception of the HECM program the Government has endorsed over 735,000 reverse mortgages.
Even though the HECM is a government program, it is important to note that Reverse Mortgages are not reserved for the desperate or the impoverished. Many aging Americans are under the impression that you must be “hard-up” in order to apply, this again is simply not true, we assist homeowners in the Reverse Mortgage process that come from all income demographics.
Reverse Mortgage Closing Costs
In the past, the fees associated with insuring a reverse mortgage were a little high. It is very important to note that this has changed in recent years with the HECM Savers Program. NO LONGER are you required to pay the HUD Insurance fee with your proceeds. The Savers Program has eliminated nearly 80% of the costs due at closing, this has revolutionized the program.
We Understand You Have Questions
First and foremost we are here to help, we know that you will have questions and we also know that your family members will have questions.
Our goal is to make the process as simple as possible and we also know that you need to be informed in order to make your decision.
At Poli Mortgage Group, we are dedicated to answering your questions and answering the questions of your family. With this in mind, we are creating an online resource, designed to help you and your family learn all the details of a reverse mortgage.
In the coming weeks, you can visit this website and discover:
- All the details of reverse mortgages
- The most frequent questions we receive about reverse mortgages
- Useful resources such as calculators and Q&A
- Eligibility requirements
- Updates to the program
In the mean time we have decided to build a dedicated team to help you through the process. The HECM Program requires specialized knowledge and we have partnered with a veteran to the Reverse Mortgage Industry in order to serve you and answer your questions.
For a meeting or phone conversation please contact the head of our Reverse Mortgage Lending team:
Robert Norton can be reached by phone: 781-801-1461
Robert can be reached via email: Robert.Norton@polimortgage.com
Robert Norton has over 7 years as a dedicated reverse mortgage specialist and he is here to answer your questions.