Seniors Have Dreams Too -
They want to live A GOOD and SECURE LIFE in their retirement years.
They want to enjoy living in their own homes forever. Thousands of Seniors are using the reverse mortgage loan to convert a portion of the equity in their home into a tax free cash* to supplement their income.
A reverse mortgage loan will allow you to retire in the comfort of your home without having to worry about making regular monthly mortgage payments. With a reverse mortgage loan, you only need to pay for your taxes, insurance, and property maintenance. A reverse mortgage loan from Southland Mortgage Inc. can help you achieve your goals of remaining in your home and potentially increase your monthly cash flow.
A reverse mortgage loan may even allow you to delay social security benefits. Every year you delay collecting social security can increase your benefits in the future. Southland Mortgage can help make things easier for senior homeowners and help you retire in the comfort of your own home.
Contact us and one of our Loan Professionals will explain all the details and answer any questions you may have.
*Consult Your financial advisor and government agencies for any impact on your taxes or benefits.
A reverse mortgage is a loan for seniors age 62 and older. The property you are financing must be your primary residence.The reverse mortgage loan allows a borrower to convert a portion of the home equity into cash that can be used today. As with any other types of mortgage loans the reverse mortgage loan uses a home's equity as collateral. The reverse mortgage loan does not require regular monthly mortgage payments. Instead, the Bank pays you.
You can receive the money in a few different ways - a lump sum, a line of credit, monthly payments, or a combination of monthly installments and a line of credit. After obtaining a reverse mortgage loan, a borrower must continue to pay for property taxes, insurance, and maintenance. The approval process for a reverse mortgage loan is similar to any other type of mortgage, but there is an extra step. It is mandatory for all borrowers to enroll in a counseling session with a HUD-approved counselor and provide a counseling certificate to the lender as proof.
For a HECM reverse mortgage loan, we will calculate how much you can borrow from the available equity in your home. The calculation is based on the age of the youngest borrower, the interest rate and the appraised value of your property. This number is known as your principal limit. Generally, you can take out up to 60% of your principal limit in the first year.
With a reverse mortgage loan, every borrower is different and the amounts available will differ from one borrower to another. As a general rule, the amounts available increases the older the borrower, the higher the home value, the lower the interest rate and the smaller the amount to be withdrawn the first year of the loan. To discover how much you may qualify for, contact us and one of our loan originator specialist, will assist you and answer all of your questions.
Qualifying for a reverse mortgage loan used to be easy for anyone who was 62 years of age and had enough home equity. Unfortunately, after the recession and the credit crunch, and by 2012, a high percentage of reverse mortgage loans were in default. That year more than $1 billion of taxpayers' money was poured into a bailout. Naturally and soon after tougher regulations were adopted. Today, to be eligible for a HECM reverse mortgage loan, The Federal Housing Authority (FHA) requires that the youngest borrower is a minimum of 62 years old. Although most younger applicants are often the spouses, anyone can apply, including siblings, friends and others. The home which will be used to secure the reverse mortgage loan of the borrowers must be the primary residence of the applicant(s). No applicant(s) can be in default of any debt to the federal government. If the home is not owned free and clear, any existing mortgage must be paid off using the proceeds from the reverse mortgage loan at closing. In addition a borrower must meet financial eligibility criteria as established by (HUD) Housing and Urban Development. Borrowers must have sufficient financial resources to pay for housing costs such as property taxes, insurance, and maintenance fees.
In general, a good rule of thumb is 50% equity. Although there are no specific dollar limits, the best candidates for reverse mortgages are borrowers who have their home mortgage paid off in full or have a small mortgage balance remaining. If you do have a small existing traditional mortgage, it will be paid off at closing from the proceeds of your reverse mortgage loan.
If you have a significant outstanding mortgage balance, it may result in minimal cash out. However, with a reverse mortgage loan you do not have to make monthly mortgage payments. This can provide you the extra money you need to supplement your income in retirement. You do have to continue paying for taxes, insurance and maintenance. You can't take out all of your equity, but the more you have, the greater the available money from your reverse mortgage loan. Typically you can take up to 60% of your home equity in a reverse mortgage loan. Loan amounts can increase due to a variety of factors. The older the age of the borrower, the more your home appraises for and the more equity will be available to cash out.
Some borrowers may need to move away for one reason or another. A borrower may need to move to a nursing home, move in with their children or simply move to another location or a different state. Whatever the reasons, some borrowers may want to sell their home with a reverse mortgage loan. A reverse mortgage is a loan that can be repaid at any time and without any penalty.
Therefore, a borrower can sell their home at any time they choose and get out of a reverse mortgage loan, just like with any traditional mortgage loan. Once you decide to sell your home, you should contact your lender and request a full payoff quote in writing. You may want to retain a real estate agent to help you with the sale process, but it is not required.
You may choose to hire a real estate attorney to ensure that the full payment of your reverse mortgage is handled correctly. Once all liens on your home and any associated fees with your sale are paid off, any and all remaining proceeds will be yours to keep.