How Much Can You Borrow With A HECM Reverse Mortgage?

Posted on April 2, 2020 by Beth Paterson, CRMP

Determining How much is available with a reverse mortgage Have you considered a reverse mortgage and wondered how much you could borrower? Are you concerned that your retirement funds are reduced during this bear market? Having funds available from a reverse mortgage when the market is low can benefit your retirement portfolios. We have borrowers who are thankful they have these funds so they don’t have to pull money from their portfolios while the market is down.

The following outlines how much you could borrow with a Home Equity Reverse Mortgage (HECM) reverse mortgage.

FHA calculates a Mortgage Lending Limit. This is the maximum amount a lender will look at in determining how much will be loaned to a borrower. Initially one cannot borrow 100% of the home value.

There are several factors used to determine the amount of money available to the borrower(s) initially. The amount available to be borrowed is the Principal Limit.

– The Principal Limit depends on:

Type of reverse mortgage program chosen
Age of the youngest borrower or in the case of an Eligible Non-Borrowing Spouse, the age of the younger spouse
Current expected interest rate based on a 10-year SWAP, rates are currently low so more funds are available than when they are higher.
Appraised value of the home or FHA’s Mortgage Lending Limit; whichever is less
For the HECM For Purchase, the appraised value, FHA Mortgage Lending Limit or purchase price, whichever is lower

The amount available for a borrower to use is determined by:

– Principal Limit

Less Service Set-aside (if applicable)

– Equals available Principal Limit

Less closing costs

– Equals net available to borrower(s) before mandatory obligations. Mandatory obligations are items required to be paid off at closing or during the 1st year. For example, mortgages, liens, judgements, federal debt such as taxes or student loans. It can also include set-asides for repairs and taxes and insurances due in the 1st year.

Less any mandatory obligations
Less Life Expectancy Set-Aside (LESA) if required or chosen (A set-aside to pay property taxes and hazard insurance in the future)

– Equals net available to be used as borrower(s) desires

One can obtain a HECM reverse mortgage on higher valued homes. The amount borrowed is based on the FHA Mortgage Lending Limit, currently $765,600

While initially you cannot borrow 100% of the home value. Over time with the small monthly loans of interest and FHA Mortgage Insurance Premiums being added to the loan balance, your loan balance, or amount you borrowed, could be the home value or more than the value at time of origination. As a non-recourse loan, borrowers or their heirs do not owe more than the appraised home value at the time the loan is being repaid.

Would you like to explore a reverse mortgage for your situation? Contact us if you are in Minnesota. As your local broker, we work with several lenders and provide free information and facts with no obligation, meeting in person whenever possible.

For other states, contact your local reverse mortgage specialist who is a broker, one who works with several lenders, has their Broker License/NMLS and preferably holds the Certified Reverse Mortgage Professional (CRMP) designation.

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link: https://wp.me/p4EUZQ-3yN

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

HECM Reverse Mortgages and Non-borrowing Spouses, What You Need To Know

Posted on February 8, 2019 by Beth Paterson, CRMP

Reverse mortgage can be done with a non-borrowing spouse

There are times when one is looking into a reverse mortgage but there is a spouse that is not 62. HUD implemented some options and protections for some non-borrowing spouses. Let’s take a look at what you need to know about the HECM Reverse Mortgages and Non-borrowing spouses.

A Non-Borrowing Spouse is the spouse, as determined by the state law where the spouse and borrower/ mortgagor live at the time of closing, but is not a borrower on the loan.

Non-Borrowing Spouses must comply with FHA’s requirements.

Non-Borrowing Spouses do not need to be 62 at the time of the closing, however, the amount of proceeds available are based on the age of the younger borrower or Eligible Non-Borrowing Spouse.

Non-Borrowing Spouses may qualify for a Deferral Period. The Deferral Period is the time following the death of the borrower during which the due and payable status is deferred for a Non-Borrowing Spouse.

For Non-Borrowing Spouses on loans as of April 25, 2014, the borrower must be legally married at the time of closing in order for the Deferral Period to apply.

In 2015 HUD clarified the eligibility of Non-Borrowing Spouses:

An Eligible Non-Borrowing Spouse is one who is married to the borrower and occupies the home and has their age used for determining the principal limit or maximum claim amount of the loan. The Eligible Non-Borrowing Spouse maybe protected by the deferral period.
An Ineligible Non-Borrowing Spouse is one who is married to the borrower but does not occupy the home and their age is not used for determining the principal limit or maximum claim amount of the loan. Ineligible spouses are not protected by the Deferral Period.

Borrowers and Eligible Non-Borrowing Spouses must respond annually to the marital status certificate and occupancy status certificate. HECM provides funds for retirement

The Eligible Non-Borrowing Spouse must:

Have been the spouse of a HECM borrower at the time of the loan closing and have remained the spouse of the borrower during of the borrower’s life.
Have been properly disclosed at origination and named as a Non-Borrowing Spouse in the HECM loan documents.
Have occupied, and continued to occupy, the property secured by the HECM as their Primary Residence.

If a divorce occurs, the borrower must provide a copy of the divorce degree. The Non-Borrowing Spouse is no longer eligible for protections and the Deferral Period and not required to provide the annual certificates.

The Deferral Period will not apply to anyone the borrower is not married to at the time of closing but marries in the future.

The home must be the primary residence of the borrower at the time of their death in order for the Eligible Non-Borrowing Spouse to qualify for the Deferral Period.

If the borrower dies before a Non-Borrowing Spouse, the due and payable status will be deferred as long as the Eligible Non-Borrowing Spouse continues to meet all the qualifying attributes and satisfies the requirements:

Establish legal ownership or on-going legal rights to reside in the property secured by the HECM within 90 days from the death of the last surviving HECM borrower.
Ensure all obligations of the HECM borrower(s) continue to be satisfied after the death of the last surviving borrower.
Ensure that the HECM does not become due and payable for any other reason after the death of the last surviving borrower.

The due and payable status is in the Deferral Period only for the time the Non-Borrowing Spouse continues to meet all requirements of the loan and the property remains the Principal Residence of the Non-Borrowing Spouse. If any conditions cease to be met, the Deferral Period ends and the loan immediately become due and payable.

The HECM is non-assumable therefore the proceeds of the HECM are not available for use or disbursement to any Non-Borrowing Spouse during the Deferral Period.

The HECM funds will only be made available during the Deferral Period for items specified in the loan documents, i.e., from Repair Set-asides for required repairs outlined during the origination period and required to meet FHA insurability and are satisfactory and completed during the established time frame. No unused funds will be disbursed.

The mortgage will continue to accrue interest based on the terms of the mortgage and loan agreement at the time of closing.

The FHA Mortgage Insurance Premium (MIP) will continue to be charged and sent to FHA.

If applicable, servicing fees will still be collected i accordance with the terms of the loan.

Non-borrowing spouse may qualify for due and payable deferral period

When the Deferral Period ends and the loan is called due and payable, the interest, MIP and servicing fees if applicable, along with any proceeds received from the borrower during the term of the loan will become due.

Don’t run from a reverse mortgage if your spouse isn’t yet 62 but know HUD’s rules. Take time to understand and have the facts.

If you’d like to understand and get the facts on reverse mortgages? Contact us if you are in Minnesota. As your local broker, we work with several lenders and provide free information and facts with no obligation, meeting in person whenever possible.

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Reverse Mortgages are not complicated; but are multi-faceted

Posted on September 12, 2018 by Beth Paterson, CRMP

Reverse Mortgages are not complicated but multi-faceted It is often stated that reverse mortgages are complicated or complex transactions. In reality reverse mortgages aren’t any more complex than a conventional mortgage or other financial products. Do you understand all the terms and features of a conventional mortgage or HELOC? Do you understand your 401K’s, stock investments or other retirement plans? What about your credit card(s)… do you know how they work?

Comparing Your Smart Phone To A Reverse Mortgage My smart phone has so many bells and whistles I don’t understand all the options or how it works. They too can seem complex but are really just multi-faceted. I still utilize one and I don’t think I could live without it any more. If people are open to getting the facts, they will likely have a better understanding of reverse mortgage and might just find it useful.

Rather than looking at reverse mortgages as complicated, look at them as they are multi-faceted.

Let’s clarify some of the facets about reverse mortgages.

People still think the bank or the lender will own the home once the reverse mortgage is done. Or the bank or lender will take ownership once the loan becomes due and payable. However, like a conventional mortgage or HELOC, the title remains in the homeowners’ name, the bank or lender does NOT own the home. When the reverse mortgage borrowers are no longer in the home as their primary residence, the loan becomes due and payable.

The amount repaid is the amount borrowed by the homeowners including interest and FHA Mortgage Insurance Premiums over the term of the loan. (Because one is not making payments, essentially one is making small loans each month.)

After the loan balance is paid off, any remaining funds go to the borrowers or their heirs. As a non-recourse loan, if the loan balance is higher than the fair market value of the home, the borrowers or their heirs don’t have to come up with the difference.

Other false statements often seen or heard are that reverse mortgages are a scam, only the lender benefits. They take advantage of people. Let me clarify, the most common reverse mortgage, the Home Equity Conversion Mortgage (HECM) is FHA insured and regulated by HUD – no, not scams but a valid loan using a home as collateral.

Celebrating having a revese mortgage Borrowers receive many benefits in having funds to use for current needs or retirement and long-term care needs without having to make monthly interest and principal payments, improved cash flow without restrictions on how the funds can be used, being able to stay in their home or purchase a new home.

Originators and lenders do get paid for reverse mortgage loans, but everyone gets paid for the work they do. Personally I find it rewarding to help people, and I’m not ripping people off, in fact I and others I know in the industry are certainly not getting rich in this career…there is a lot of work involved to originate reverse mortgages, but we’re passionate in making a difference for people. In fact, because of all the work, on some loans our compensation works out to very little.

Headlines have stated seniors are losing their homes to foreclosure if they don’t pay property taxes or keep insurance on the home. Think about it, with or without a mortgage if you don’t pay property taxes, the county will foreclose. If you don’t have insurance on your property and the home is destroyed you will have lost your home and you won’t have the money to rebuild or replace it. Neither of these are the fault of a reverse mortgage.

We often see or hear that the reverse mortgage should be a last resort, to refinance with a conventional mortgage or Home Equity Line of Credit (HELOC) or sell. The problem with this is most seniors don’t qualify for conventional mortgages or HELOCs. And if they do, the borrowers have to make monthly mortgage payments. Even if they can make the payments now, if life happens they may not be able to make the payments in the future. Rather than being a last resort the reverse mortgage can help one pay for retirement, long-term care.

The unused portion of the reverse mortgage line of credit grows so more funds can become available in the future. And the funds in the line of credit could be higher than what one could qualify for in the future. This can be very beneficial to seniors and isn’t available with any other loan.

Seniors often want to stay in their home rather than moving so don’t tell them to sell. If they do sell, where are they going to live? They’d still have housing expenses…can they afford those or wouldn’t having no rent or monthly mortgage payments be more beneficial?

HECM for Purchse If they do wish to sell maybe to downsize, move closer to their children or to purchase the home of their dreams, the HECM for Purchase program gives them the option to purchase without having to make monthly principal or interest payments. And maybe even create a line of credit for future needs.

Have you heard or read reverse mortgages are expensive? Have you looked at the costs of a traditional or forward mortgage? The costs are the same other than the FHA Mortgage Insurance Premium. With a conventional mortgage people want to know what the payment will be and what the interest is, they generally don’t pay attention to the costs. But when you look at the costs of the conventional mortgage you’ll likely be surprised, they aren’t really different from reverse mortgages.

HELOC’s may have lower up-front fees but the interest rate may be higher which in the long run could turn out to be more expensive than a reverse mortgage… besides one has to qualify on income, assets and credit. Additionally payments have to be made on the HELOCs. And there is a risk that they HELOC could be called due and at some point during the term the monthly payment must be increased to include the principal, not just the interest.

Other headlines or statements about reverse mortgages state the bank/lender gets the children’s inheritance. Another false one! The homeowners receive funds during the term of the loan, whether to pay off conventional loans or receiving funds monthly or draws from their line of credit. When the loan is being paid, due when the home is no longer the primary residence of the borrower(s), there may or may not be funds left for an inheritance. The lender is receiving payment of principal and interest, this is NOT stealing the children’s inheritance from the remaining equity. With the reverse mortgage, the homeowner is using the funds for their needs or wants. Are you as heirs going to give them the funds they need just so you have an inheritance? What about letting your parents live their quality of life and not worry about getting an inheritance?

The last one I’m going to cover today is the option that lowering your expenses is a better option. Really? Most seniors don’t have this option. Seniors want to maintain their lifestyle and why shouldn’t they? Do you want to be told to lower your expenses, stop getting your hair done, not having cable TV, being able to get together with friends for lunch, go to a family wedding or reunion? Just because one turns 62 doesn’t mean they can’t enjoy life especially when they have equity in their home they can utilize.

Understanding Reverse Mortgages-A Book About Reverse Mortgages Take time to understand and have the facts. Those who do, see the reverse mortgage is not complicated but many faceted and they see the benefits it can bring to their lives.

If you’d like to understand and get the facts on reverse mortgags? Contact us if you are in Minnesota. As your local broker, we work with several lenders and provide free information and facts with no obligation, meeting in person whenever possible.

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Home for the Holidays…Creating A Wonderful Life for your Older Loved Ones

Posted on December 12, 2017 by Beth Paterson, CRMP

Home for the Holidays, Staying at home With the families gathering for the holidays now is a good time to discuss memories, dreams and desires with our senior loved ones. One of the most important things to keep in mind is having an understanding of the senior and considering what they want. As George Santavana stated, “Before you contradict an old man, my fair friend, you should endeavor to understand him.”

Our seniors are valuable to our families and to our society. They are not just a potted plant in the corner that looks beautiful. They bring experience, knowledge, history and a sense of who we are. They have and continue to contribute to our world. While we treasure other things that are old, we often discount our senior’s opinions, needs and desires.

Sister Mary Germma Brunke wrote, “It is the old apple trees that are decked with the loveliest blossoms. It is the ancient redwoods that rise to majestic heights. It is the aged wine that tastes the sweetest. It is ancient coins, stamps and furniture that people seek. It is the old friends that are loved the best. Thank God for the blessings of age and the wisdom, patience and maturity that go with it. Old is wonderful!”

Remaining at home with a Reverse Mortgage How can we help make “old” wonderful? As you are visiting with your loved ones ask them what they remember about moving into the house they first purchased, what they like about the neighborhood. How do they feel about where they are living now. Have them share memories of their friends from their youth and what they treasure about the friends in their life now. What do they cherish? What has value to them? What’s important to them?

Have your loved ones define security and find out what gives this security to them. From their viewpoint what does it mean to be independent? How do they define dignity in their life? What do they need to feel they still have control and choices in their life?

Listen to them without making judgments. If they repeat the same story several times, look at it as a process or stage they are going through. It doesn’t mean they have dementia, it may just mean that something about that time in their life has a significant impact on their life. Find out the details of that time of their life and what it means to them now.

There’s a wonderful book by David Solie, M.S., P.A., “How to Say It To Seniors: Closing the Communication Gap with Our Elders” that provides insight into understanding and gives great suggestions on how to have the discussions with your loved ones.

Discuss memories of being in their home As you listen to the answers of your loved ones are you discovering that they want to stay in their home? Are they struggling financially? Do you need a little extra help with chores or getting out to church or visiting with friends or going to a movie? Do they need some physical therapy to help be able to do what they desire? Is nutrition and meals a concern? Would assistance in bathing be helpful? Would some medical equipment help them remain at home more comfortably?

There are many options available to help seniors meet their needs and desires. If they want to stay in their home and need some extra cash, consider a reverse mortgage. If they want to move to a home closer to you or to downsize, consider using a reverse mortgage for the financing. If they need some extra help, a home care agency can help them. Home care agencies provide companion services, meal preparation, medication reminders, bathing and skilled care. Physical therapy can be brought into the home. Adult Day Services are an often overlooked option. And if the family dynamics come into play, a Geriatric Care Manager can help facilitate as well as assist in determining needs and resources.

Senior Companionship“Aging is not ‘lost youth’ but a new stage of opportunity and strength.” (Betty Friedan) Let’s honor our seniors at this stage of their life with the value they provide to us and with the opportunities available to meet their needs and achieve their desires.

Reading some of my other blog articles will help provide you and your loved ones with information to help their life to be wonderful:

For further details on the reverse mortgage contact us if you are in Minnesota. As your local broker, we work with several lenders and provide free information and facts with no obligation, meeting in person whenever possible. For other states, contact your local reverse mortgage specialist who is a broker, one who works with several lenders, has their Broker License/NMLS and preferably holds the Certified Reverse Mortgage Professional (CRMP) designation.

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Is it crucial to have no mortgage in retirement or wiser to do a reverse mortgage?

Posted on September 27, 2017 by Beth Paterson, CRMP

Using home equity for retirement cash flow I recently received a comment on a blog post saying that it is, “absolutely crucial that Americans reach the vocational finish line (retirement) with their personal residence being FREE & CLEAR!” Have you also thought this?

I challenge him, and you, to consider to whose perspective is it crucial? Your perspective, the homeowners’ or their heirs’ perspectives? Depending on the report referenced, it’s somewhere between 80% and 90+% who want to remain in their homes and age in place, but even if they want to relocate and downsize, being debt free is less important than living their lives with security, independence, dignity and control.

Statistics show a large majority of senior homeowners have mortgages that they have to pay monthly mortgage payments on. The debt payments can be a hardship for seniors. Fortunately with the reverse mortgage, the most common being the Home Equity Conversion Mortgage (HECM) offered by HUD and insured by FHA, monthly mortgage payments are not required.

Yes, the reverse mortgage is a debt but to be paid back when the homeowners are no longer living in the home as their primary residence. The reverse mortgage offers flexible payment options, borrowers can choose to make payments when they want, how much they choose to make or make no payment at all.

And yes, reverse mortgage borrowers are still responsible for paying property taxes, hazard insurance and if applicable, HOA dues. But these expenses are part of the responsibility of home ownership whether there is a reverse mortgage, traditional mortgage, HELOC or no mortgage.

The reverse mortgage is a non-recourse loan, which means there is no personal liability to their borrowers or their heirs.

Home equity is a retirement nest egg and to use it for retirement cash flow there are two options, 1) sell it (but then where are they going to live and have improved cash flow for a longer term and for long-term care planning?) or 2) leverage the home equity with a reverse mortgage. The line of credit option with the HECM offers a growth rate which is not available with any other loan.

Reverse Mortgages can be used for Retirement Planning Financial advisors are suggesting using reverse mortgages for retirement planning: Wall Street Journal points out that advisers are now promoting reverse mortgages as a valuable tool for retirement planning in their article “New Math on Reverse Mortgages.”

As Wade Pfau, Professor of Retirement Income at The American College in Bryn Mawr, PA and a Principal and Director for McLean Asset Management, states in his article, Forbes: Wise Reverse Mortgages Can Be the Saving Grace of Unprepared Retirees, “…that is the nature of retirement income efficiency: using assets in a way that allows for more income and/or more legacy.”

According to Jamie Hopkins, Co-Director of the American College’s New York Life Center for Retirement Income and an Associate Professor of Taxation at the American College, in Forbes, Reverse Mortgages Can Be A Retiree’s Saving Grace “Robert C. Merton, a finance professor at MIT’s Sloan School of Management, recently stated ‘Americans have wrongly steered clear of reverse mortgages.’”

Even with the HECM changes going into effect on October 2, 2017, the reverse mortgage can be a valuable tool in retirement as it always has been.

In the real world a Reverse Mortgage is another planning tool In a perfect world, ideally it is to not have debt of any kind including no mortgages, having a huge retirement portfolio to cover one’s lifestyle and long-term care costs.

However, in the real world, many who have thought they have saved for retirement find that when “life happens” they use those funds quickly. The reverse mortgage is another tool for planning for retirement and long-term care costs as well as more immediate needs. This way they have a plan and funds for when “life happens.”

If you’d like to improve your retirement cash flow now or for the future, contact us if you are in Minnesota. As your local broker, we work with several lenders and provide FREE information and facts with NO OBLIGATION, meeting in person whenever possible.

This material may be re-posted provided it is re-posted in its entirety and without modifications and includes the contact information, copyright information and the following link: http://wp.me/p4EUZQ-1y7

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Should you do a HECM Reverse Mortgage or leave an inheritance?

Posted on May 22, 2017 by Beth Paterson, CRMP

Leaving home as inheritance with reverse mortgage? “I want to leave an inheritance for my kids.” “I want my son to get my house.” “The reverse mortgage will eat up my inheritance.” “The reverse mortgage isn’t good for the kids.” “The reverse mortgage should only be done with those who don’t have children.” These are statements that are often seen or heard when a reverse mortgage is mentioned.

My questions are, do the children have the money needed to cover the costs of mom’s or dad’s needs today if they don’t have the money and don’t do a reverse mortgage? Will they have the funds in the future when there are needs? Do the children even want the house?

Even financial planners helping their clients have funds for planning their long-term needs who suggest exploring a reverse mortgage hear, “I want to leave the house to my children.”

Let me share a story. As I always do, I have a discussion on the needs and desires of one who is considering a Home Equity Conversion Mortgage (HECM) or a reverse mortgage. In this one particular situation, the woman, Chris*, was living off her Social Security income of about $600 a month. She needed new teeth, new glasses, some new clothes, and her home needed some repairs. She loved going to plays but couldn’t even afford the community plays for $5 to $10. Doing a reverse mortgage would help Chris “live with more” so she completed the application.

Son concerned about inheritance with reverse mortgage A few days later she called to say she decided not to proceed. When I inquired why the change, she replied that her son didn’t want her to do it. After some exploratory questions as to why, she said her son wanted her home after she had passed away so he could rent it out and make money.

How outrageous is this?

Was she really going to do without all the things she needed as basic necessities not to mention just being able to have some money for a few extra things to enjoy life while she’s still alive just so her son could make money off her house after she passed away?

While I was astounded by this response, I kept my tongue in check and calmly asked her if her son was going to provide the money she needed now or was she going to do without the glasses, teeth, clothes, and home repairs so her son could benefit after she passed away. She said, “Of course not, he doesn’t have the money to help me.”

In another situation, the daughter was living with her parents, Gale and Glen*, helping them around the house and with their care. The couple decided to do the reverse mortgage to pay off their current mortgage because when something happened to one of them the other could not afford to make the monthly mortgage payments on their current conventional mortgage.

The daughter was concerned about where she’s going to live when both of her parents are no longer in the home as their primary residence. Even without her parents doing the reverse mortgage, with their current mortgage in place, she would have to figure out a way to pay off that mortgage to remain in the home.

Is living from Social Security check to Social Security check just to get by and maybe doing without some of the things in life that give dignity such as having lunch with friends, getting one’s hair done, or having cable TV really a good option over a reverse mortgage?
Maybe you have some savings, funds in retirement plans, is it enough to cover your long-term care needs?
Why should one be more concerned about leaving an inheritance than having their independence and control of their life and living comfortably?
Why do children think they deserve an inheritance rather than their parents being able to live comfortably, have security, independence, dignity and control of their lives?
Aren’t these the same things every one of us wants?
Why would one deny your parents of living life comfortably?

Even if one’s children are able to help their parents financially today, do their parents really want to be dependent on their children? What happens if “life happens” to their children, they lose their job, get sick, have to come up with money to pay for their kid’s college, etc. and they no longer have the funds to help their parents? This can impact everyone!

Reverse Mortgage provides funds for enjoying life Maybe one doesn’t have immediate needs for funds as Chris did. In planning for the future, using the reverse mortgage line of credit that grows over time, could be beneficial to provide funds when those needs arise. The reverse mortgage funds could mean one doesn’t have to tap their other retirement funds or they could supplement them.

What if one needs home care or has medical expenses? Why should one do without needed care so they can leave an inheritance? Why do children think they should receive an inheritance over their parents having the dignity of paying for their own care and expenses?

If one moves into senior housing, whether independent living, assisted living or skilled care, does one really think there will be funds left to leave for an inheritance? Or will the children have to help pay for the senior housing? Whether private pay or services paid by Medicaid or other government funds, there may not be an inheritance.

And whose money is it anyway? Who should benefit from the use of funds or assets that the senior worked so hard for? Shouldn’t the money and assets be used for whatever one’s parents need or want?

Many seniors say, “My kids are doing better than I am.” This is often the case but even if this isn’t the case, why should one be concerned about leaving money after their gone?

A reverse mortgage is a loan against one’s home to allow seniors 62 and older to remain in their home with security, independence, dignity and control. The most common, and only one available in Minnesota, is the FHA insured HECM. The reverse mortgage offers many benefits including:

No monthly mortgage payment requirements (one must abide by the terms of the loan including paying paying property taxes, keeping hazard insurance on the home and abiding by the terms of the loan)
Income or credit are not used to qualify for a low interest rate.
The loan is due and payable when the home is no longer the primary residence of the borrower(s) or on the 150th birthday of the youngest borrower.
As a non-recourse loan, if the loan balance is higher than what the home can be sold for at fair market value, the borrower or their estate are not responsible for the difference. And the opposite is true too, if the loan balance is lower than what the home is sold for, the borrower or their estate receives the difference.
The borrower remains the owner of the home with the title staying in the name of the borrower(s).

In addition, the reverse mortgage has many protections, likely more than any other financial product or service. To learn what these are read, “You Need To Know Reverse Mortgage Borrowers Are Highly Protected.”

I’m happy to say Chris did proceed with her reverse mortgage. And for years afterwards I received at least one call, sometimes a couple calls, a year saying she’s so relieved to have the money to meet her needs. Besides the initial needs, she has had funds to fix her car when it needed some repairs, to cover some medical expenses and she had funds to take a trip to attend a family wedding. And yes, she’s even enjoying the community plays every now and then.

Once Chris passes away her son will have the opportunity to keep the home by obtaining a conventional mortgage to pay off the reverse mortgage. If he’s renting the property out, the rent payments he will be receiving will cover the mortgage payment – he could still make money if priced accordingly. In the meantime Chris is remaining in her home with the security, independence, dignity and control she deserves and enjoying her life.

For Gale and Glen’s daughter when they are no longer in the home, if she wants to stay in that home, she would need financing to pay off her parent’s reverse mortgage. This may be done by obtaining conventional loan, a reverse mortgage if she qualifies, or from funds as a beneficiary of a life insurance policy or other retirement programs.

So what do you think is better? Doing without today just so a child can have an inheritance or the senior being able to fulfill one’s needs and wants while they are alive?

Contact us if you are in Minnesota. As your local broker, we work with several lenders and provide free information and facts with no obligation, meeting in person whenever possible.

When you decide to do a reverse mortgage make sure you work with a local originator or loan officer who specializes in reverse mortgages, has years of experience and knowledge in reverse mortgages in your state, preferably holds the Certified Reverse mortgage Professional (CRMP) designation, licensed in your state, is a broker, working with various lenders, and is willing to meet with you to review the details, before the application, during the application and at closing.

I would caution about working with an originator from another state who is mailing all the documentation, including the application and not “meeting” with you to explain and review what you are signing. (The lenders in another state may send a notary for application and/or closing – they are not licensed mortgage brokers so can NOT answer questions, they are there only to verify your signature.) Ask for references and find out if the loan originator will be there for you even after the loan has closed. If you feel pressured, call another originator. You can find a list of questions to ask an originator at our webite: www.RMSIDAC.com.

To ensure that borrowers understand reverse mortgages HUD requires anyone doing a reverse mortgage to complete counseling through a third-party. They will review the program and discuss other options that may be available.

*Borrowers’ situations are real; borrowers’ names changed to protect their identity.

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Choosing between A HELOC and A HECM Reverse Mortgage

Posted on February 21, 2017 by Beth Paterson, CRMP

Choosing between HELOC and HECM People often look at Home Equity Lines of Credit (HELOC) to give them extra cash. These can be a good option. However, for those 62 and older, a Home Equity Conversion Mortgage (HECM) Line of Credit may be more advantageous. Let’s compare the two.

	Home Equity Line of Credit (HELOC)	Home Equity Conversion Mortgage (HECM) Reverse Mortgage Line of Credit
Borrow against equity in home	Yes	Yes
Uses of funds	There may be stipulations that funds can only be used for certain things, i.e. remodel, adding an addition.	No restrictions.
Draw Period, time during which you can access funds/Repayment Period, time when you make payments to repay the loan	Draw Period is usually 5 to 10 years; when draw period ends you can no longer access funds. Repayment period is usually 10 or 20 year terms; Some may require a payment of the full balance at one time at the end of the draw period.	Longer term: Draw period is as long as the home is your primary residence and you abide by the terms of the loan and there are funds available in your line of credit. Repayment is due when the home is no longer the primary residence, usually when borrower dies, sells or moves. Due date on mortgage document is 150^th birthday of youngest borrower.
Payment Requirement	Yes – requires a minimum monthly payment of interest during Draw Period; eventually increasing to include principal to pay entire loan balance during Repayment Period.	No – Offers flexible option; No monthly mortgage payment required but can choose to pay as little or as much as you want or NOT at all.
Responsible for Property Taxes, Insurance, maintaining property; paying HOA dues if applicable	Yes	Yes
Interest Rates	Most are Adjustable Rate; as interest rate rises payments will also rise. Generally no cap on the size of the adjustments. Lifetime caps may be available for a shorter term HELOC. May vary by State law.	Adjustable Rate. Interest added to loan balance, only impacting loan balance at end. (See Non-recourse Loan.) Adjustable Rate Options have a lifetime cap on the rate; for the monthly adjustable rate it is10 points and for the annual rate it is 5 points over the initial rate at the time of closing. Fixed rate option is available but does not offer Line of Credit option, all available funds must be drawn at closing.
Called due or Freezing Funds	Banks can call the loan due or freeze funds not yet used or cut the Line of Credit if they find adverse information about the borrower’s credit or as the market changes as was done when home values declined.	Line of Credit cannot be frozen as long as you meet terms of the loan. Because FHA insures the loan it’s guaranteed to be there for you during term of the loan.
Line of Credit Growth Rate	No	Unused Line of Credit grows so more funds become available in future with Adjustable Rate Option.
Re-borrow LOC Funds	Yes	Yes; If loan payment(s) made, reduces loan balance and funds can be re-borrowed in future with Adjustable Rate option. Line of Credit is not available with the Fixed Rate Option so funds cannot be re-borrowed.
Non-recourse Loan – The loan can only be repaid with the value of the home. There is no personal liability to repay the loan from the borrower or their heirs.	No	Yes
Qualifying	Lenders look at income, credit worthiness including credit scores, and ability to make HELCO payments. Regulatory requirements and restrictions may prevent some seniors qualifying.	62 and older, meet Financial Assessment requirements demonstrating their ability and willingness to pay property taxes and insurance into the future. In some circumstances a Life Expectancy Set Aside may be required to cover the property taxes and insurance.
Planning for future	Short term loans limit use in future when one might need long-term care.	Longer term loan offers options for planning and potentially having funds for long-term care needs in the future.

If you are looking for funds for a short period of time, you can afford to make payments and you qualify, a HELOC may be the best option for your situation.*

Happy they decided on HECM Reverse Mortgage over HELCO

For those 62 and older, generally the HECM is more advantageous over a HELOC.

With the flexibility of making payments toward the loan balance, or NOT making a mortgage payment at all, the HECM reverse mortgage line of credit could be part of your plan for when life changes.
(Borrowers are still responsible for paying property taxes, hazard insurance and maintenance of the home.)

The HECM Line of Credit funds, which have a growth rate on unused funds, can provide some safeguards if one’s situation changes such as loss of job, Social Security or pension reduced because of the loss of a spouse, or changed or reduced of financial assets. Or if “life happens” with funds in a HECM line of credit you could cover your long-term care needs.

Additionally one can change their payment plan option to receive tenure or term monthly payments; this can benefit them as their needs change.

*If you do a HELOC then later decide to do a HECM, there is a 12 month seasoning requirement, have to wait 12 months, after taking out the HELOC and drawing $500 or more. Doing the HECM initially may make more sense.

Blog posts’ information is current as of date post published, program is subject to change in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Refinancing A Reverse Mortgage – Should you?

Posted on January 10, 2017 by Beth Paterson, CRMP

Current reverse mortgage borrowers are receiving letters encouraging them to refinance. While refinancing a reverse mortgage is an option, let’s explore whether it should be considered.

Just like refinancing a conventional, or what we call a forward, mortgage, borrowers consider refinancing a reverse mortgage when they need more money. But just like a forward mortgage, one needs to make sure they are going to receive a benefit when they refinance. And just like a forward mortgage, when refinancing the closing costs are part of the transaction.

When I receive the calls from my borrowers who have received the letters or encouragement on their statements I start with these questions:

How long ago did you take out your reverse mortgage?
What was the value of your home at that time?
What is the value of your home now?
What is your current loan balance on your reverse mortgage?
Are you receiving monthly payments?
Do you have funds in a Line of Credit?
Why would you want to refinancing?

These questions are pertinent in helping one decide if it makes sense to consider refinancing.

Keep in mind the factors used to determine the amount a senior can receive from their reverse mortgage include: the interest rate of the program chosen, the age of the borrower (the older one is the more funds one can receive), and the home value based on an FHA appraisal or the FHA Lending Limit.

The first three questions are important in determining if you will be able receive more money when refinancing. As one aged during the time home vales were increasing refinancing made more sense because borrowers were more likely to be able to receive additional funds.

As you know, during the housing crash home values decreased. Now while home values have started to increase, we often find that the borrowers will still not receive additional funds from refinancing their reverse mortgage. (However some states the values have increased faster and higher than others. In MN, while increasing, the values have not increased enough to warrant refinancing in many situations.)

If, however, the initial reverse mortgage was taken when there was a lower lending limit, i.e. $251,750 and the current home value is, say $400,000, then refinancing may be considered.

For many years the FHA Lending Limit was based on the county in which one lived. In 2008 the Lending Limit was changed to a national limit of $417,000. In 2009 and through the end of 2016, the national limit was $625,500. January 1st through December 31, 2017 the FHA Lending Limit for reverse mortgages has been increased to $636,150.

Is refinancing a good idea just because the Lending Limit has increased? Not necessarily, especially if one’s home value isn’t in the higher valued range.

The current loan balance is important because when refinancing the reverse mortgage, the current reverse mortgage needs to be repaid. If there aren’t enough proceeds to pay off the current mortgage and to receive additional money then refinancing doesn’t make sense.

The next two questions, whether they are receiving monthly payments or have funds in a line of credit, are important because most likely it doesn’t make sense to refinance a reverse mortgage if they still have funds available to them that will last them for a few more years.

With a forward mortgage sometimes refinancing is done to reduce the interest rate. With the reverse mortgage generally it doesn’t make sense to refinance for the interest rate. Remember one isn’t making payments with a reverse mortgage so the interest rate doesn’t impact their monthly cash flow, it only impacts the amount that will be repaid when the loan becomes due and payable.

It is important to note that the reverse mortgage is non-recourse which means there is no personal liability to the borrower or their heirs if the loan balance is higher than what the home can be sold for.

The funds available to borrowers are determined by the age of the youngest borrower, the Expected Interest Rate and the program chosen. If the Expected Interest Rate is higher, less funds will be available.

Until 2008 all reverse mortgages were adjustable rate mortgages. Don’t panic, this isn’t a bad thing with a reverse mortgage. With the adjustable rate reverse mortgage there is more flexibility by having the option of a line of credit, monthly payments, a lump sum or a combination of these.

The adjustable interest rate is made up of an index and a margin. The index is based on the LIBOR and the margin is determined by the lender. HUD set a floor at 5.06% which means the funds available will be the same if the interest is at 5.06 or below. Currently the interest rates are remaining low, below the floor so one generally will not receive more funds if they were to refinance.

In 2008 a fixed rate option was introduced. With the fixed rate one has to draw all funds as a lump sum; the line of credit and monthly payment options are not available. One is not going to gain a benefit of more funds available by refinancing for a lower interest rate. However we have had some who refinance from a fixed rate to an adjustable rate to receive the flexibility the adjustable rate option offers, especially if one chooses to make payments on their reverse mortgage.

When refinancing one will still have closing costs so you have to consider if refinancing will offset off set a lower interest rate and/or funds one is receiving.

The Streamline Refinance of the FHA Housing and Urban Development (HUD) Home Equity Conversion Mortgage or HECM reverse mortgage requires a calculation demonstrating borrowers receive at least 5% more or they must go through the counseling session to review their situation. Some lenders require the counseling for any borrower refinancing their reverse mortgage. This is a strong protection to help borrowers from falling for a lender’s marketing letters and thinking refinancing may be a good idea when it really isn’t. Unfortunately it can cost seniors to find out this information as counselors are allowed to charge, generally $125 for the counseling session.

The National Reverse Mortgage Lenders Association (NRMLA) ethics committee set a guideline that reverse mortgage borrowers who want to refinance must wait a minimum of 18 months along with the “closing cost test” and “loan proceeds test.”

The last question or why you are considering is important in the decision to refinance because there could be valid reasons to refinance that benefit you. Some include a title change, i.e. adding a younger spouse to title when they turn 62, taking on a new spouse are a couple reasons.

While options should always be considered, after reviewing the above questions and your answers, at this time refinancing generally doesn’t make sense for the majority of reverse mortgage borrowers. Hopefully seniors don’t get sucked in with marketing letters & statements by completing an application so that the lender can just take an application when refinancing doesn’t make sense for them.

This material may be re-posted provided it is re-posted in its entirety and without modifications and includes the contact information, copyright information and the following link: http://wp.me/p4EUZQ-1q4

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Believe It Or Not, Reverse Mortgages Are NOT A Scam!

Posted on December 5, 2016 by Beth Paterson, CRMP

Comments under factual articles in the media, “warnings” to those interested in exploring a reverse mortgage, and even research says people are afraid of reverse mortgages because they think they are a scam.

Most people have, or had, a conventional mortgage using them to purchase their home or have refinanced their original purchase mortgage…these aren’t considered a scam. So why are reverse mortgages considered a scam?

A reverse mortgage is a loan to a homeowner using the home as collateral or security where the lender puts a lien against the property, just like conventional mortgage, but with special terms for those 62 and older.

The Home Equity Conversion Mortgage or HECM, the most common reverse mortgage, is insured by FHA for the purpose of providing a valuable financing alternative for senior homeowners to help them remain in their home and have access to funds by withdrawing a portion of their home equity.

Whether a conventional mortgage or a reverse mortgage, borrowers are responsible on how they use the funds from their loan. If not used wisely, with a conventional mortgage the borrower is said to be irresponsible; with a reverse mortgage it is said the lender took advantage of the borrower and it’s a scam. Why? It is the borrower who is making the choices.

Let’s compare the two.

	Reverse Mortgage	Conventional Mortgage
Loan Collateral	It is a loan using the home as collateral.	It is a loan using the home as collateral.
Title/Ownership	The title stays in the borrower’s name, they remain the homeowner.	The title stays in the borrower’s name, they remain the homeowner.
Interest Rate	Income or credit scores don’t affect the interest rate.	Interest rate can be impacted by one’s income and credit score. Limited income and poor credit means a higher interest rate.
Qualifying	One homeowner needs to be 62 or over. Income and credit history are used to for qualifying; to determine if borrowers meet HUD’s Financial Assessment requirements. If one has a history of late payments on debt and a low residual income, a Life Expectancy Set Aside may be necessary. Under some circumstances they may not qualify. These requirements are lower and less strict than a traditional loan.	Income and credit history and scores are used to for qualifying; low income and/or a poor credit may mean one doesn’t qualify for the conventional mortgage.

Closing Costs

Closing costs generally include origination fee, appraisal, title and recording fees. Closing costs could be offset by lender or broker credits but will likely have a higher interest rate.

FHA Mortgage Insurance Premiums are charged.

Closing costs are comparable to reverse mortgages…side-by-side comparisons have been done.

Closing costs generally include origination fee, appraisal, title and recording fees. Closing costs could be offset by lender or broker credits but will likely have a higher interest rate.

If doing a “Forward” FHA Mortgage Insurance Premiums are charged. On conventional mortgage one may be required to pay for Mortgage Insurance.

Closing costs are comparable to reverse mortgages…side-by-side comparisons have been done.

Loan Amount Borrowed

Initial amount borrowed is based on the age of the youngest homeowner, appraised value or FHA Lending Limit, expected interest rate and program chosen.

Over time the amount borrowed increases with the interest amount charged, FHA Mortgage Insurance Premium and draws being added to the loan balance. At some point the amount borrowed could be more than the value of the home at the time the loan was initiated.

If payments are made (they are optional), then they could decrease the loan balance.

Amount borrowed is based on appraised value of home, credit score, income, debts, and program chosen.

Receipt of Funds

Can receive funds as a line of credit, monthly payments to the borrower, lump sum or a combination of these.

Line of credit increases monthly so more funds become available over time. The available line of credit can never be withdrawn by the lender if borrower is abiding by the terms of the loan.

Conventional mortgage funds are drawn as a lump sum.

Home Equity Line of Credit (HELOC) creates a line of credit for a specific term and specific amount. The line of credit does not increase and the lender can withdraw the loan at any time.

Use of Funds

Borrowers benefit by having access to funds for whatever they need or want. It can be used for more immediate needs or as a financial planning tool or even to purchase a home.

Borrowers purchase a home or refinance to have funds for what they need or want.

Monthly Mortgage Payments

The advantage is monthly mortgage payments are not required make which takes away the risk of foreclosure from not making a monthly mortgage payment.

With a conventional mortgage or HELOC one has to make monthly mortgage payments. If the mortgage payments aren’t made, usually within 3 to 4 months, the foreclosure process will begin.

Payment Requirements

While monthly mortgage payments are not required, they can be made; it’s a choice of the borrower as to when, how much, how often, or not at all. Making payments reduces the loan balance.

With the adjustable rate, the funds are applied to the line of credit and can be re-borrowed without refinancing.

Payments are required to be made.

One has to refinance to access more funds.

Interest

Interest is accrued over the life of the loan. This increases the loan balance over the term of the loan.

If one chooses to make payments the loan balance will be decreased by the amount of payment(s) made.

Interest is paid each month along with the principal generally reducing the loan balance over the term of the loan.

If one has a balloon payment the full payment would be required at the end of the loan term…generally 10 to 15 years.

Borrower’s Responsibilities

Borrowers are responsible for keeping insurance on the property, paying property taxes and maintaining the home. As long as they abide by the terms of the loan they are not forced from their home.

If they don’t abide by the terms of the loan, they risk a foreclosure.

Borrowers are responsible for keeping insurance on the property, paying property taxes and maintaining the home. As long as they abide by the terms of the loan they are not forced from their home.

If they don’t abide by the terms of the loan, they risk a foreclosure.

Loan Term/Due Date

It is a loan and does need to be repaid at the end of the loan term. The reverse mortgage loan is not due and payable until the home is no longer the primary residence of the borrower. (Or if they don’t abide by the terms of the loan.) The due date on the mortgage is the 150th birthday of the youngest borrower.

It is a loan and does need to be repaid over the life of the loan. A conventional mortgage loan term has a due date generally in 15 or 30 years from the closing date. A HELOC’s loan term has a due date generally in 10 to 15 years from the closing date.

Equity Difference When Sold

When the loan is being repaid, if the home is sold for more than the loan balance, the borrower or their heirs receive the difference.

Non-Recourse

All reverse mortgages are non-recourse which means there is no personal liability to the borrower or their heirs. The loan is paid back only from the property.

Conventional loans can be non-recourse, it’s determined by the lender. Without the non-recourse factor the lender can be repaid from other assets of the borrower.

FHA Mortgage Insurance Premium Covers When Loan Due

If the loan balance is higher than what the home can be sold for when the loan is due, the FHA Mortgage Insurance covers the difference to the lender; the borrower or their heirs or tax dollars don’t cover this difference.

Staying in home when all funds used

Once a reverse mortgage is in place, even if one draws all the funds available from the reverse mortgage, the borrowers can stay in their home as long as they abide by the terms of the loan, i.e. pay property taxes and insurance, HOA dues if applicable, and maintain the home.

Borrowers stay in their homes even when all funds are drawn as long as they abide by the terms of the loan.

Protections

Requires counseling by a HUD approved 3^rd party counselor as a protection to help borrowers understand the details of the reverse mortgage. The processing cannot start until the counseling has occurred.

HUD regulates what lenders and third-parties may charge stating they must be customary and reasonable costs necessary to close the mortgage. Mark-ups are not allowed.

Disclosures and sample closing documents must be provided to borrowers at application.

No counseling required.

Mark-ups on such items as processing and underwriting fees and courier fees can be charged.

Lender/Bank and Investor Benefit

Lender makes money by the interest charged on the loan.

Would you loan money without receiving a benefit or compensation?

Lender makes money by the interest charged on the loan.

Would you loan money without receiving a benefit or compensation?

Use a reverse mortgage to stay in home As you can see, reverse mortgages compare to conventional mortgages and they are NOT a scam. As with any financial product, or any purchase for that matter, one should get the facts and understand the terms of what they are purchasing.

The loan officer one is working with should be explaining the features and terms of the reverse mortgage. Yes, unfortunately there are bad apples in every industry but that doesn’t mean the product is bad. The reverse mortgage industry has implemented protections to prevent borrowers from scam.

Don’t jump to conclusions! Understanding them, one might find the reverse mortgage is a viable option for their situation.

Blog posts’ information is current as of date post published, program is subject to change in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Basics of Reverse Mortgages You Need to Know

Posted on September 13, 2016 by Beth Paterson, CRMP

The Home Equity Conversion Mortgage, or HECM, is the most common reverse mortgage and only one available in Minnesota. The HECM was first insured by FHA in 1989 for the purpose of providing a valuable financing alternative for senior homeowners to help them remain in their home and have access to funds by withdrawing a portion of their home equity.

A mortgage like any other mortgage where borrowers retain title and borrow against their home equity, the reverse mortgage offers special terms for seniors home owners 62 and older. One advantage for seniors is with the reverse mortgage there are no monthly payment requirements although borrowers are responsible for paying property taxes and insurance. While monthly payments aren’t required, one can make a payment or payments when and how much they choose.

The Principal Limit or maximum loan amount is determined by the home value or FHA Lending Limit, currently $636,150, the age of the youngest borrower (the older one is the more they can receive), the Expected Interest Rate, and the program chosen. Doing the reverse mortgage at a younger age may still be more beneficial than waiting until one is older.

To qualify borrowers must meet a Financial Assessment requirements demonstrating their ability and willingness to pay property taxes and insurance into the future. In some circumstances a Life Expectancy Set Aside (LESA) may be required to cover the property taxes and insurance.

Reverse Mortgage Basics With the Adjustable Rate option, the funds available can be received in a lump sum, monthly payments, a line of credit or a combination of these. The monthly payments can be structured as one needs or for life as long as the home is the primary residence. Funds in the line of credit grow so more funds can be available in the future. The line of credit growth rate is a feature that makes the reverse mortgage a tool for financial and long term care planning.

A fixed rate option is available however only the lump sum draw is available and the draw amount is limited to the 60% of the Principal Limit (an additional 10% is available in some circumstances).

With a reverse mortgage you hold the keys and title The borrowers keep the title to the home and are responsible for property taxes, insurance, and maintaining the home. Unlike a conventional loan the interest accrues, increasing the balance with no mortgage payments due until the home is no longer the primary residence of the borrower(s) or if one has broken the terms of the loan, i.e. didn’t pay property taxes.

Because the closing costs are up-front, they are often perceived as high and often scare people away. However, the fees are comparable to the traditional closing costs of a conventional loan including an origination fee, appraisal, title fees, title insurance and recording fees. As a FHA insured loan, with the HECM borrowers also pay the FHA Mortgage Insurance Premium (MIP).

The repayment amount is the lesser of the loan balance or fair market value of the home. If there is remaining equity, it goes to the borrowers or their heirs. As a non-recourse loan there is no personal liability to the borrowers or their estate for repayment.

Generally the funds are tax-free but one should consult with their tax advisor for their specific situation.

One can have a trust, life estate, or receive Medicaid (Medical Assistance in Minnesota), Elderly Waiver or other public benefits.* In the case of a couple even if one of the borrowers goes into the nursing home or passes away, the other one can stay in the home and the loan isn’t due until both borrowers are no longer in the home as their primary residence. Not considered income, Social Security and Medicare are not affected. *Check with legal advisor for your situation.

Eligible non-borrowing spouses may be able to remain in the home if they meet certain qualifying attributes. Talk with your local originator and/or HUD approved reverse mortgage counselor for details.

With no limitations on how the funds can be used, through the years hundreds of thousands of seniors have benefitted from the reverse mortgage allowing them to stay in their home and have security, independence, dignity and control.

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Minnesota Reverse Mortgages SIDAC

Minnesota Reverse Mortgage Information, Facts and News from the Experts Excelling in Service

Tag Archives: Seniors

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Home for the Holidays…Creating A Wonderful Life for your Older Loved Ones

Is it crucial to have no mortgage in retirement or wiser to do a reverse mortgage?

Should you do a HECM Reverse Mortgage or leave an inheritance?

Choosing between A HELOC and A HECM Reverse Mortgage

Refinancing A Reverse Mortgage – Should you?

Believe It Or Not, Reverse Mortgages Are NOT A Scam!

Basics of Reverse Mortgages You Need to Know