Want to know More About Reverse Mortgages?

A reverse mortgage is a financial tool designed to provide a form of financial relief for homeowners 62 and older. It allows seniors to stay in their home, eliminate their current mortgage payment, and access their equity - tax-free! Unlike traditional "forward" home loans or second mortgages, no repayment is required until the homeowner(s) no longer occupies the property as their primary residence.

Any homeowner over the age of 62 can apply for a reverse mortgage. The borrower must occupy the home as your primary residence. Reverse mortgages are based on your home's equity and age of the borrower - there are no income or credit requirements.

The application process is the same as any other real estate loan. Your current loan (if you have one) will be paid off with your new reverse mortgage, totally eliminating any current mortgage payment you have! If you have additional equity, you can access that money - tax-free! If your home is free and clear, you can use a reverse mortgage to gain access to the equity that you have worked so hard to build. As the homeowner(s), you can choose from one of four ways to receive the additional cash from your reverse mortgage:

Since reverse mortgages allow you to make no monthly payments, the mortgage amount you owe grows larger over time. As your mortgage increases, the amount of equity you have left after selling or paying off the loan generally grows smaller. The amount owed at the conclusion of a reverse mortgage (when you no longer occupy the home) is either the amount of the home's value or the amount of the current mortgage - whichever amount is less. Also, your home will continue to appreciate just the same as if you had a regular mortgage, increasing your equity as time progresses. As a Reverse Mortgage borrower, you will retain your place on the property's title and continue to own your home, so you will still be responsible for property taxes, insurance and repairs. No repayment is required until you no longer occupy the house. What could you do if your mortgage payment was eliminated, or if you had additional cash? Whether you just want to have more money to enjoy your life, help support a loved one or pay off other rising bills and medical expenses, a reverse mortgage can give you immediate access to your money. Talk to a Reverse Mortgage Expert today to learn more about how a reverse mortgage could help you.

Whenever interest rates go down, there is almost always a large number of Americans who attempt to refinance their home mortgages. If these people find the right deal, they are able to lower their monthly mortgage payments by a significant amount. For other people in the U.S. who are over the age of 62, a reverse mortgage helps achieve financial stability by eliminating their monthly mortgage payment altogether. So the question is, can older homeowners who already have a reverse mortgage refinance those loans just like they would a conventional mortgage and receive even more money? The answer is yes – if it is done under the right circumstances.

Borrowers may wish to wait until national mortgage rates fall to a level that is significantly lower than the rate for which they secured their reverse mortgages. Otherwise, seniors will receive less money in loan advances, not more. Secondly, homeowners should have their homes appraised to see if the residences have sharply increased in value since the reverse mortgage was obtained. If the home's value has remained fairly constant or has depreciated, then the refinancing process will not be advantageous for the borrower. Next, borrowers should see if the federal lending limit in their area has increased. Those rules and limits change as time passes, and a higher loan limit may allow individuals to get a bigger loan than they did originally. The final factor is the most constant one: age. The older a homeowner is, the more money he or she can qualify for on a reverse mortgage.

So if a situation arises where the combination of these four factors are tilted heavily in the homeowners' favor, then refinancing may be an option. But before starting the refinancing process, seniors should ask themselves: Am I happy with the terms of my current reverse mortgage? Has the reverse mortgage accomplished what I had hoped it would? If not, then the homeowner should perhaps look elsewhere to improve his or her financial situation. The next question to ask is simpler: do I need more money? Just because interest rates have dropped doesn't mean that reverse mortgage borrowers must to embark on the lengthy process of refinancing their loans. Finally, each homeowner should find out if the fees and upfront costs associated with putting together another reverse mortgage agreement will eat into any realized gain from the refinancing process. If so, it may be less trouble to stay in the current reverse mortgage.

If homeowners do decide to refinance, they should look into some additional choices that they might not have had when they first secured their reverse mortgages. For example, they may want to obtain a fixed rate reverse mortgage to lock in the low interest rate and pocket the cash difference after the original loan is paid off. Conversely, if market conditions indicate that interest rates are likely to drop even further, then a variable-rate reverse mortgage might be a better choice, especially if the initial rate is even lower than that of a similar fixed-rate loan. In addition, if a person's home has appreciated drastically, a jumbo reverse mortgage might be an attractive alternative. Though the interest rate of this loan type might be higher, its lending limit would be equivalent to the home's increased value, thus securing more money for the borrower.

But even when mortgage rates remain fairly steady for the life of a reverse mortgage, it still may be a good idea to seek refinancing. For example, let's say that a homeowner acquired a reverse mortgage on a home valued at $300,000 back in September of 2004. At the time, the owner was 65 years of age. As a result, the person received a total cash payment of $145,150. We'll say that the individual accepted this cash in the form of monthly payments of $750.

Now, let's fast forward to September of 2009. The homeowner is now 70 years of age, and we'll say that his home has appreciated in value to $425,000. If we assume that the interest rate and lending limits have remained the same, the person would still qualify for a loan of $232,170. After paying off the $45,000 in payments received over five years (60 months times $750 each month), the individual still nets $187,170 – an increase of $43,020 (minus mortgage costs, of course) over the original loan amount. That extra money coming in every month might be enough to cover additional day-to-day expenses, medical bills, or long-term care needs.

Just like with first-time reverse mortgages, counseling is required from a federally-approved agency before a reverse mortgage is refinanced. This is to ensure that the homeowner will benefit from the changes in market conditions, loan limits, age, and home equity so that the new loan will be more attractive than the old one. But reverse mortgage borrowers can take solace in knowing that if their financial needs change as they age, they still have the option of refinancing.

Do you have a lot of questions about reverse mortgages? Don't worry! Even before you go through the application process here at Reverse Mortgage Match, you'll meet with a HUD-approved mortgage counselor so you can feel sure about your decision to get a reverse mortgage.

For many people, getting a mortgage is one of the largest investments they'll ever make. The same goes for a reverse mortgage. To qualify for a reverse mortgage, all borrower(s) must go through counseling.

The counselor must be a third party who is approved by the U.S. Department of Housing and Urban Development (HUD). We will provide you with a list of available approved counselors in your area or that you can contact by phone. Counseling generally takes an hour and can be provided in person or via telephone. They will talk to you about your reverse mortgage options and if a reverse mortgage is right for you.

Either the homeowner themselves or the homeowner's legal representative can request reverse mortgage counseling. Authorized legal representatives include a guardian, conservator, or person holding a durable power of attorney who has been authorized to act in legal matters by the owner.

You might ask "Why do I need counseling? I know my finances!" Counseling by a HUD-approved counseling agency is mandatory, regardless of what kind of loan you choose. Their purpose is a safeguard to educate and inform you about everything you need to know about this transaction. Having an outside party explain your options and go over the details will only help you educate yourself and plan for your future.

If you're ready to eliminate your mortgage payment and start using your money for the things important to you, get in touch with a Reverse Mortgage Expert today.

For older homeowners needing some extra cash, a reverse mortgage might be the answer to their problems. Instead of monthly payments to a lender, reverse mortgages provide additional cash flow to the borrower for as long as he or she occupies the home. Such an arrangement can markedly improve financial situations for Americans 62 years of age and older who qualify for a reverse mortgage. But like any additional source of cash flow, it must be used wisely for it to be effective. Otherwise, such funding has the potential to create more problems than it solves.

In order to make a reverse mortgage work for them, seniors must first understand the different types of payment options that these loans offer. There are six ways that reverse mortgage borrowers can receive their funds, depending on which type of loan they choose. First, they can take the balance of money due to them in a single lump sum payment. Next, they can choose instead what are called term payments, which pay out an equal sum of money for a fixed period of months or years. Tenure payments are similar to term payments, but have no specified end date and continue throughout the life of the loan or until the person dies or vacates the residence. A borrower also has the option of accepting a line of credit, which enables monetary disbursements of varying amounts to be made whenever they are requested by the homeowner.

The final two choices are basically combinations of the above mentioned categories; modified term payments combine a line of credit with monthly payments for a predetermined time period, while modified tenure payments are the same as modified term payments but without a fixed termination date.

So a homeowner has a host of options when it comes to receiving payment from a reverse mortgage. But it's important to carefully consider which choice is right for you. For instance, homeowners should think twice about receiving a lump sum monetary payment unless they either have exceptional discipline and/or money managing skills or a specific need for the entire amount, such as a large unpaid debt or legal settlement. Otherwise, these homeowners are likely to spend the money too quickly and have no funds remaining to supplement their income over time. For this reason, seniors should strongly consider opting for some form of term payment, tenure payment or credit line arrangement to better manage their funding.

Seniors are generally advised to list all monthly expenses, identify existing sources of income from pensions, social security, and retirement plans, and then determine how much money is needed to balance their budgets. They could then specify term or tenure payments to avoid monthly shortfalls.

Reverse mortgage homeowners could also set up a line of credit with the idea that it could be used as either an annual "luxury stipend," which could be renewed and adjusted each year throughout the life of the loan. Or a "rainy day" emergency fund, which could be accessed only when unforeseen expenses arise. Of course, borrowers could also establish a schedule of modified term or modified tenure payments should their financial needs be more complex.

One of the most common applications of reverse mortgage payments is for repairs on the home itself. Allocating money for home improvement purposes makes even more sense in the case of a reverse mortgage, because the homeowner must remain in the home to be eligible for these funds. Individuals can also apply reverse mortgage payment toward outstanding medical bills, credit card balances or other outstanding debts. Some cash can be set aside for other medical needs, such as prescription drugs, in-home care, or long-term care insurance. These monies can also be allocated for so-called "lifestyle enhancements," such as the purchase of a new car, boat, trailer, or other vehicle. Finally, seniors may decide to use the cash to treat themselves to a dream vacation, cruise or shopping spree.

When deciding how to spend reverse mortgage payment, senior citizens must consider their future needs and those of their children and grandchildren. Many people set aside some reverse mortgage payment for the medical needs of a child or other relative. Grandparents may also choose to open a college education fund for their grandchildren, which can earn additional interest up until the money is needed. Parents may also put some of the money toward helping their children buy their first house, remodel their existing home, or start a small business.

Whatever financial needs they may have, seniors should try to allocate payment received from a reverse mortgage as specifically as they can. Like money received from retirement funds, investments, and Social Security benefits, payment from a reverse mortgage can only be helpful if it is spent wisely.

More and more elderly Americans are looking into reverse mortgages these days. For homeowners ages 62 and up, a reverse mortgage can be an excellent way to receive extra cash flow to help cover expenses or improve seniors' quality of life. But reverse mortgages are very complex financial agreements, and it's easy for people to get confused about these transactions. Here are some of the most common misconceptions about reverse mortgages:

1. The lending institution actually owns the house in a reverse mortgage arrangement. Borrowers still maintain ownership of the home under a reverse mortgage, just like with a conventional mortgage. But instead of the homeowner paying off the mortgage with monthly payments, he or she receives money periodically based on the equity that has been put into the home over many years. Because there is no change in title possession, homeowners must still pay property taxes, keep up with repairs, and maintain proper insurance on their home.

2. Under a reverse mortgage, a homeowner can lose his or her home. Exactly the opposite is true. If homeowners remain compliant with the terms of the reverse mortgage (such as not renting the home out for extra income or living elsewhere for over six months in a given year), then they can remain in the home for as long as they live or until they leave or sell it. They cannot see their home taken away from them as a result of foreclosure.

3. A bank will automatically sell the home when a reverse mortgage comes due. Though this is a common occurrence, there is no requirement under the terms of a reverse mortgage that the home be sold upon the loan's disposition. Often, revenue received from the sale of the home is the easiest source of funding for repayment of a reverse mortgage. But if homeowners (or their heirs) choose to do so, they may pay off the reverse mortgage with other monies or by taking out a conventional mortgage on the remaining loan balance.

4. Homeowners can't qualify for a reverse mortgage if they don't meet certain income requirements. There are no income requirements for a reverse mortgage. Individuals must only meet the age requirement and have enough equity invested in the home in order to qualify. Whether a homeowner gets Social Security benefits, receives a pension or 401(k) distributions, profits from investments, or has no money coming in at all, the status of the person's reverse mortgage application will not be affected.

5. A reverse mortgage may affect seniors' Social Security or Medicare benefits. In most cases, these entitlement programs will not be affected by funds received as a part of a reverse mortgage. However, the payment might affect the status of a person's Medicaid eligibility if the individual gets more than $2,000 ($3,000 for a couple) in a calendar month and does not spend it by the end of that month. Reverse mortgage money may also influence a senior's status under some Federal Supplemental Security Income or state entitlement programs.

6. A conventional mortgage must be entirely paid off in order for a homeowner to qualify for a reverse mortgage. Seniors can still obtain a reverse mortgage even if they owe some money on their original mortgage. However, any funds received from a reverse mortgage must first be used to repay the conventional mortgage. For example, if a homeowner qualifies for $100,000 under a reverse mortgage but still has $25,000 remaining on the home's original mortgage, he or she will receive just $75,000 in payments.

7. Under a reverse mortgage, the homeowner faces numerous restrictions on how he or she can spend the money. Funds received from a reverse mortgage can be used for anything. A homeowner can spend the money on medical bills, prescription drugs, home repairs, a new vehicle or a luxury item. The money can be allocated toward repayment of credit card debt, other loans or legal judgements. And a person can set aside reverse mortgage funding for the purpose of future long-term care, additional investing or even a college fund for his or her grandchildren.

8. A homeowner could be stuck with a huge bill at the end of a reverse mortgage if the value of the home depreciates. A reverse mortgage is known as a "non-recourse" loan, which means that the lender cannot demand a larger amount than the value of the home at the time of disposition. In other words, if the market value of the home falls below the amount of debt owed on it (a conventional mortgage would be called "upside down" under these conditions), or if the occupant outlives the life of reverse mortgage, then he or she is only required pay back an amount equal to the value of the home. This is actually one of the main advantages of a reverse mortgage. It's important to note, though, that if the homeowners default their loan by failing to pay taxes or insurance, they will owe the balance, even if it's greater than the value of the home.

Any other questions about a reverse mortgage can be answered by a qualified counseling agency. Homeowners are required by law to seek counseling from a federally-approved agency before they can secure a reverse mortgage. These counselors can also formulate an individualized assessment of each homeowner's financial situation before a reverse mortgage agreement is signed. Counseling and other legal safeguards have been implemented to provide senior citizens with all the information they need to make an informed decision on securing a reverse mortgage.

Reverse mortgages are helping thousands of Americans live their golden years without the threat of foreclosure or the fear of financial instability. Homeowners over the age of 62 can qualify for a reverse mortgage, which eliminates the monthly payment on the home and also disburses money to the borrower. Depending on which type of loan they choose, these funds can either be distributed monthly, as needed, in a lump sum, or through a line of credit. But many people are unclear about exactly what happens when the time comes to repay a reverse mortgage.

First, let's review the conditions under which a reverse mortgage loan comes due.
1. If the homeowner dies
2. If the homeowner closes on the sale of the home
3. If the homeowner permanently relocates to another residence (such as a different home, an assisted living community, a healthcare facility or the home of a family member or friend)

In cases where a married couple takes out a reverse mortgage, both spouses must meet the aforementioned requirements before repayment can take place. So if one individual dies or has to move into a medical facility, his or her partner can continue to live in the home until he or she passes away or has to relocate.

However, there are other scenarios in which a reverse mortgage holder can ask for repayment of the loan balance, most of which have to do with violations of the mortgage's terms. For instance, if the homeowner fails to stay current on his or her property taxes, that could trigger a repayment clause under the conditions of a reverse mortgage. The same circumstances could occur if the property owner does not maintain adequate insurance as required both by law and the terms of the loan agreement. And if the borrower allows the home to fall into disrepair, the lending entity has the right to demand that the reverse mortgage be repaid.

Whatever the reason, the process following notification that a reverse mortgage must be paid off is generally the same. The amount that the homeowner will owe the lender is equal to the sum of:


the total amount of cash payments received
the total amount of funds drawn from any lines of credit that were established
any interest that was accrued on the disbursements throughout the life of the mortgage
any fees or financing costs that were not paid for when the reverse mortgage was signed (but were instead financed along with the rest of the loan).


It is important to note that no other assets or income received during the time period of a reverse mortgage are factored into a repayment schedule. For example, if the homeowner used some of the money to buy a new car, placed another portion of it in a savings account to earn interest, and invested another amount in the stock market and earned a large rate of return, his or her loan repayment obligations would be the same as if he had taken the same amount of money and spent it on day-to-day expenses.
It is important to note that no other assets or income received during the time period of a reverse mortgage are factored into a repayment schedule. For example, if the homeowner used some of the money to buy a new car, placed another portion of it in a savings account to earn interest, and invested another amount in the stock market and earned a large rate of return, his or her loan repayment obligations would be the same as if he had taken the same amount of money and spent it on day-to-day expenses.
The most common method of repaying a reverse mortgage when it comes due is to apply the revenue from the sale of the home to the loan balance. After closing is completed and the sale is finalized, any portion of the proceeds left over after paying off the reverse mortgage goes either to the homeowner or his or her heirs. This often happens if the value of the home increases due to housing market factors. However, if the home depreciates over the course of the reverse mortgage and the sale amount does not fully cover the balance left on a reverse mortgage, the borrower does not have to pay the difference. That's because a reverse mortgage is a "non-recourse" loan – meaning that the lender cannot receive a greater amount of funds than the monetary level of home equity at the time of the property's disposition. So if the value of the home decreases due to such factors as neighborhood blight, lower housing demand, or normal wear and tear on the home itself, the borrower is only responsible for whatever price he or she can obtain for the home.
But there is no requirement that the funding received from a sales transaction must be used to pay off a reverse mortgage — only that the mortgage is repaid somehow. Often, seniors or their heirs will choose different methods of repayment. For example, if a borrower has access to additional funds, perhaps from a savings account, retirement plan, or investment portfolio, those monies can be applied toward the loan balance.
A homeowner also has the right to liquidate other assets to repay a reverse mortgage. If the loan comes due because of the death of the borrower, his or her heirs may choose to use their personal funds to pay off the reverse mortgage and keep the home in the family. The heirs may also decide to take out a conventional loan or mortgage to finance the remaining balance and pay it off over an extended time period. This would also eliminate the need to sell the home in question.
In conclusion, homeowners need not be overly concerned about the future point in time when a reverse mortgage will come due. Because the main purpose of a reverse mortgage is to keep seniors in their homes as long as possible, the terms and options of repayment are designed to accomplish that goal without an undue financial burden placed on the borrowers.

With the growing number of homeowners choosing a reverse mortgage, many are also concerned about the impact of this option on their eligibility for social security, Medicaid, or Medicare. The truth is, a reverse mortgage does not affect the homeowner's Medicare or Social Security coverage. However, if you have Medicaid, this becomes a little more complicated.
Medicare is the medical coverage automatically provided for seniors over 65, while Medicaid is the medical insurance for low income individuals. If you are on Medicaid and are looking to qualify for a reverse mortgage, a large sum of money could change your eligibility for the medical assistance.
Individuals who have liquid resources over $2,000 or couples that have liquid resources over $3,000 would no longer be eligible for Medicaid. So, receiving your reverse mortgage payment in one lump sum is helpful if you can spend it all at once, so that no money is left over for future months. This would apply if you had extensive repairs to be made, or household emergencies. Left over reverse mortgage money would count as an asset, and may push you over the Medicaid eligibility limit.
If you cannot spend the entire lump sum at once, then it may be better for you to receive your reverse mortgage as a line of credit or in payments. A line of credit is a lump sum that has been set aside for you. You have full access to it, but it's not counted as an asset because you don't have the money until you withdraw it.
Regardless of what you end up choosing, it's important to check with your local Agency on Aging or a Medicaid expert to know your options. While reverse mortgages are a great way to relieve financial stress, there's also no reason why you should lose medical coverage to pay for other necessities in life. Keep in mind that it is entirely possible to qualify for a reverse mortgage, and also keep your Medicaid eligibility.
For homeowners with Medicare and Social Security, there are no financial eligibility requirements that prevent you from obtaining a reverse mortgage, so be sure to talk to a Reverse Mortgage Expert today.

The process of getting your reverse mortgage will be a lot like getting any other real estate loan you've had. Only the advantages of a reverse mortgage are even better, because you'll never make a payment on this loan while you live in the home! Our goal at Reverse Mortgage Match, is to help you understand each and every step of the reverse mortgage process. Here's what you can expect:

1. Talk with us! Contact a Reverse Mortgage Expert now to find out if a reverse mortgage is right for you and if you qualify.

2. We'll help you fill out the application At this time, we'll work together to help you choose the best type of reverse mortgage for your needs and determine how you'd like to receive the money from your new reverse mortgage - a line of credit, lump sum, monthly payments or a combination of those. Don't forget to consult your financial advisor.

3. Counseling is required Because reverse mortgages are a big step for any homeowner, HUD (Department of Housing and Urban Development) requires that all applicants receive third-party counseling to explain all the available options and details. We'll provide a list of counselors for you to contact. The average counseling fee is $125. Price will vary by office and location.

4. Appraisal and Inspection An appraisal will need to be completed on your home in order to determine the market value, make sure it fits within government guidelines, and check for any repairs needed to the home. You might need a structural inspection as well. A fee of $375 can be waived if you qualify based on our property valuation process. Reverse Mortgage does not make a profit from these proceeds; we only charge the minimum amount to cover the cost of the appraisal itself. If you are billed for an appraisal, and then decide not to move forward with the loan and the appraisal has not yet been completed, a full refund will be given. If however, an appraisal was completed on your property, a refund will not be issued. This is because the payment will have already been issued to the appraiser to compensate him for his out-of-pocket costs.

5. Underwriting After we get all the documents we need from you, we'll be working behind the scenes to finalize all the details of the loan.

6. Closing We'll set everything up; and come to you home with all the final documents to sign. We couldn't make closing any easier!

7. Disbursement As with all home loans, the right of rescission period takes three business days. Any debts you'd like included are paid and proceeds can be taken in the form or a wire or check.

8. Repayment For the life of the loan, you do not ever make monthly mortgage payments to your lender. Reverse mortgages become due when the borrower(s) no longer occupies the home. If death of the borrower occurs, the heirs/estate may repay the loan from the sale of the home or refinance the home. It's really that easy!