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THEPRESS.NET
SEPTEMBER 16, 2016
Reverse Mortgages – Fact and Fiction By Beth Miller-Rowe What is a reverse mortgage? An FHA-insured, home equity conversion mortgage (reverse mortgage) is a loan program designed by and insured by HUD, which allows seniors 62 and over to access equity in their home. The reverse mortgage comes in many shapes and sizes, fixed rate, adjustable rates, monthly income or line of credit. We can pay off your current mortgage, and if there is sufficient equity, we can also provide monthly income or a line of credit. If you do not have a current mortgage against your home, then your options are even greater. Is a reverse mortgage 100 percent financing? The amount you can borrow is dependent on the age of the youngest borrower, current interest rates and the value of your home. It is not 100 percent financing, but rather a percentage of the value of your home. For example, if you are 62, you can borrow approximately 53 percent; if you are 85, you can borrow approximately 70 percent. The first thing we do is pay off your current mortgage, if any, and then we look at the other options open to you. Do both borrowers have to be 62+? No. HUD revised the rules regarding a spouse who is under 62 years of age. We now offer programs that will allow that spouse to remain in the home if something happens to the borrowing spouse. This is referred to as an eligible non-borrowing spouse. What can I do with the money? The bottom line is that you can do whatever you wish with the money. Many people use it to pay off debt, pay medical expenses, hire help around the home, travel or help grandkids or kids. The list is endless. One of my favorites is when I see people improving their home for their enjoyment. Often times, we remodel or upgrade our homes when we are going to sell in order to get top dollar. The sad part about that is that we don’t get to enjoy those improvements
while we are living in our home. Whether it is completely new kitchen and baths, adding some valuable accessibility features or creating a more open living space, why not spend some time enjoying those amenities? What are my responsibilities as a borrower? I call them the Big 5: 1. Pay your property taxes. 2. Pay your property insurance. 3. Pay your HOA dues. 4. Live in the home. 5. Maintain the home. As long as you do those five things, you can live in your home forever without making any principal and interest payments. Why does it all seem so confusing? We have all spent our entire lives paying down our bills and reducing our debt. It feels odd to us to be getting money from the bank and having our debt increase. That is understandable. The overriding goal was to reach retirement with our house paid off and no debt. Some people got there, but would now like to access some of the accumulated wealth to enhance their retirement years. Others were not so fortunate for a variety of reasons, not the least of which was the 2008 economic devastation that destroyed years of diligent savings and planning. It is a whole new way of thinking, and that is why a face-to-face meeting is so important. Speaking face to face is the very heart of good business. I would never consider ‘doing a deal’ that has to do with finances or my home with someone I have never met or laid eyes on. At our first meeting, I will explain the mechanics of a reverse mortgage in detail. We will review it every which way to Sunday, until you understand how and why it works. This meeting will determine the success of the process and, more importantly, the success of the reverse mortgage in meeting your long-term goals.
Beth Miller-Rowe Branch Manager and Reverse Mortgage Specialist The Reverse Mortgage Group
A Branch of American Pacific Mortgage
Office: 925-969-0380 Cell: 925-381-8264 Beth@YourReverse.com 3478 Buskirk Ave., Ste. 1000 Pleasant Hill, CA 94523
• No principal and interest payments required!
• You own your own home, not the bank!
• Proceeds are tax free!
BRE: 00950759/01215943 NMLS: 294774/831612/1850
Licensed by the Dept of Business Oversight under the California Residential Mortgage Lending Act