" The many benefits of a reverse mortgage include that it allows the borrower to stay in their beloved home , gets them access to taxfree income , and it doesn ’ t require a monthly mortgage payment ."
How Lenders Determine Reverse Mortgage Loan Amounts
Some lenders aren ’ t very concerned if the reverse mortgage borrower applicants have lower FICO credit scores in the 600 ranges . This is especially true if the reverse mortgage is insured by the federal government that is called a Home Equity Conversion Mortgage ( HECM ). These loans are only available through FHAapproved mortgage brokers like me and other lenders .
The HECM reverse mortgages are typically the most affordable with the lowest rates and fees and may be among the easiest reverse mortgages to qualify for because the government is insuring the lender who funds the loan against a portion of any future losses just like with traditional FHA home mortgages .
Let ’ s review below some of the key points associated with the FHA ’ s Home Equity Conversion Mortgages ( HECM ):
● The home must be the borrowers ’ primary residence .
● One of more borrowers in the home must be 62 or older even if one spouse is 20 + years younger .
● The home must be currently owned without a mortgage or there must be lots of equity in it . Any existing mortgage on the property will be paid off in full with the new reverse mortgage .
● Generally , you can ’ t be delinquent on any federal debt like student loans or defaulted SBA business loans . However , these debts might be paid off in full to qualify with some of the cash received concurrently at the closing .
● You must show that you have at least the minimum income to cover the property taxes , homeowners insurance , homeowners association fees , and other basic housing expenses . Many times , a borrowers ’ social security income may be sufficient to qualify . Regardless , it ’ s usually much easier for older borrowers to qualify for a reverse mortgage than a traditional 30 year fixed mortgage .
● You must chat with a HECM counselor by phone or in person so that you better understand the potential benefits and risks associated with your decision to choose a reverse mortgage .
Reverse Mortgage Comparisons and Solutions
Any reverse mortgage loans that are partly insured by the federal government also make these types of financial instruments much more affordable than older versions of reverse mortgages that were notorious for excessive rates and loan fees that gouged many senior citizen borrowers . Today ’ s rates and fees for reverse mortgages are also at or near their alltime record lows , just like with other types of financial products such as 30year fixed rate mortgages . Loan fees are also capped at much lower loan amounts today than 5 or 10 years ago , so the borrower collects much more overall cash .
The many benefits of a reverse mortgage include that it allows the borrower to stay in their beloved home , gets them access to taxfree income , and it doesn ’ t require a monthly mortgage payment . Today ’ s reverse mortgages should be compared with the most competitive life insurance plans and other types of financial instruments before you make a decision . You may be pleasantly surprised to learn that the 2021 version of reverse mortgage options may be your best financial choice for you and your family .
RICK TOBIN
Rick Tobin has a diversified background in both the real estate and securities fields for the past 30 + years . He has held seven ( 7 ) different real estate and securities brokerage licenses to date , and is a graduate of the University of Southern California . Rick has an extensive background in the financing of residential and commercial properties around the U . S with debt , equity , and mezzanine money . His funding sources have included banks , life insurance companies , REITs ( Real Estate Investment Trusts ), equity funds , and foreign money sources . You can visit Rick Tobin at
RealLoans . com for more details .
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