About MLS Reverse Mortgage
What is a Reverse Mortgage?
A reverse mortgage is a program designed to enable homeowners 62 years and older to convert part of the equity in their homes into tax-free cash flow* without having to sell the home, give up title, or take on a new monthly mortgage payment. Instead of making monthly payments to the lender, as with a regular mortgage, the lender makes payments to you. You are required to pay your property taxes, insurance and any other charges associated with your property. Visit the Reverse Mortgage FAQ section to see a list of the most commonly asked questions.
Reverse Mortgage Education Center
How Much Money do I qualify for?
Reverse Mortgage Rates
Rates as of 7/30/14
Fixed Rate Lump Sum: For borrowers looking to take a full draw of their reverse mortgage proceeds, the fixed rate reverse mortgage will generally provide thousands more than the adjustable reverse mortgage. Those looking to payoff a large existing mortgage or to use the money immediately should consider the fixed rate option.
Adjustable Rate Credit Line: Unlike Home Equity Lines of Credit offered by your local bank, the line of credit cannot be closed or frozen. The line also increases in availability each month based on the unused portion.
Tenure Payment Plan: Sometimes referred to as an "annuity mortgage", the proceeds made available to you may be structured into monthly installments guaranteed for life as long as you occupy the home as your primary residence and make required tax and insurance payments.
The first step in obtaining a reverse mortgage is the mandatory reverse mortgage counseling by an independent, HUD approved counseling agency. The counseling can take place in person or over the phone. It has been out experience that most clients choose to received counseling via phone.
The HECM counselor will review your specific situation and offer any alternatives to the reverse mortgage, should the agency feel you may be better suited for another product. Additionally, counselors are now required to ask potential borrowers about income, assets, debts and monthly living expenses in order to perform a budget analysis. Once your counseling session is complete, the counselor will mail a counseling certificate to be signed by all borrowers and returned to your lender.
Lenders are not allowed to do any work for a borrower that may incur an expense prior to receiving a signed counseling certificate.
The most popular reverse mortgage program, accounting for over 95% of reverse mortgages in the U.S., is the Federally Insured HECM or Home Equity Conversion Mortgage (Pronounced "Heck-Um"). This Government Insured program was first signed into law in 1988 and has lately seen an explosion in popularity. In Fact, hundreds of thousands of seniors have improved their quality of life with a reverse mortgage. Fixed Rate Reverse Mortgages are gaining in popularity and is an option that should be explored by anyone considering a reverse mortgage. The purchase reverse mortgage has been available now since January 1, 2009.
Purchase Reverse Mortgage
If you are 62 or older and are considering purchasing a new home, then you should consider a purchase reverse mortgage. If you don't think you qualify for conventional financing, then a HECM for purchase may be the answer.
A Reverse Mortgage for Purchase allows seniors, age 62 or older, to purchase a new principal residence using loan proceeds from the HECM (Home Equity Conversion Mortgage). The loan can be used to downsize, move closer to friends or family, move to a home more suitable to age at home or for any other reason… all without having the burden of monthly mortgage payments. You are just responsible for payment of taxes and insurance and any other that may be associated with your property, such as HOA fees.
Your Purchase HECM Starts Here:
Working with a Realtor? Odds are, your Realtor or the sellers may have several questions about how the HECM for purchase works. We would love to help educate them to help streamline the process and remove all confusion from the purchase transaction. We have closed several purchase reverse mortgages and welcome your questions.
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