A:You must own your home and all owners must be at least62 years of age. You should have significant equity in the home, but you do not need your existing mortgage to be completely paid off. A reverse mortgage can help pay off existing mortgages so you can stop making any future payments! In fact, you must use your reverse mortgage proceeds to pay off any existing mortgage balances.

You must also live in your home at least half of the year. Eligible home types include single family homes, two- to four-unit homes, condominiums, planned urban developments, townhouses, manufactured homes, and mobile homes. Cooperative apartments are not eligible.

Other conditions may apply. I can explain everything to you once I fully understand your personal situation.

A: No. Unlike traditional mortgages or home equity lines of credit, you do not need to make any ongoing mortgage payments.

A: No. All closing costs can be financed with the proceeds from your reverse mortgage when you work with Value Financial.*

A: You will still own your home since you retain the title. Value Financial can set aside proceeds from your reverse mortgage to ensure that property taxes and homeowner’s insurance are paid, should you choose that option. We can even help you set aside cash for future home repairs. Similar to most mortgages, as long as you continue to live in your home, keep up repairs, and pay property taxes and insurance, you can stay in your home as long as you choose.

A: If your spouse is also listed on your home’s title, he/she will be able to continue residing in the home and receiving the benefits of a reverse mortgage. If you do not have a surviving spouse, all equity remaining in the house will pass to your heirs. Your heirs can choose to sell the house, pay off the reverse mortgage, or apply for a traditional mortgage to finance the outstanding balance. We will work with your heirs to help them decide how to proceed.

A: Your interest rate will depend on the specific product you select and your situation.

A: Costs associated with a reverse mortgage are like those you’ll find with traditional mortgages. For example, there are closing costs (including appraisal fees, origination fees, mortgage insurance, title insurance, etc.) and servicing fees. The closing costs can be deducted from the reverse mortgage, so there are no out-of-pocket expenses when you work with Value Financial.*

A: Yes. With Value Financial, you can choose from multiple reverse mortgages. Value Financial's loan officers will help you make the decision that best suits your individual needs.

A: No. You can select a product that has a line of credit that will remain available as home equity should you never use the available line. With the HECM product, your available credit line actually grows at a rate relative to the current interest rate on the reverse mortgage.

A: No. Unlike a home equity line of credit, there are no income requirements.

A: Social Security and Medicare benefits are not affected. Supplemental Security Income (SSI) and Medicaid are not affected either, as long as all monthly cash advances are fully spent each month. Value Financial is happy to assist you in selecting the plan that will work best for you.

A: Yes. At any time you choose to increase the equity in your home, you can do so by paying all or a portion of your reverse mortgage balance.

A: Yes, all advances you receive through a reverse mortgage are tax-free. In addition, the interest paid on the outstanding mortgage balance may be tax-deductible, but generally not until the reverse mortgage balance is paid.

A: Both products allow you to turn the equity in your home into accessible proceeds. But, unlike a traditional home equity line of credit, a reverse mortgage does not require that you have an existing income stream in order to qualify, since it is designed to supplement your income. And, unlike a home equity line of credit, with a reverse mortgage, you make no monthly payments and can have no out-of-pocket expenses.*

A: No, you are not required to close and, legally, you have at least a three-day “Right of Rescission” period after closing to submit, in writing, a request to nullify the entire reverse mortgage.

 

*The only exception is that you may need to pay for your home appraisal in advance if your home value cannot be verified/substantiated.

Call Carlos today at 937-572-3713 and get the honest facts about reverse mortgages.

Copyright 2008 by Carlos Scarpero 937-572-3713 Carlos@CarlosScarpero.com

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