As a reverse mortgage expert, I have the answers to your loan questions. Are you over the age of 62? Do you live in Denver or its surrounding areas? Contact me, Kathy Muni, today to answer all of your questions today.
How Do I Qualify for a Reverse Mortgage?
- At least one borrower must be 62 or older.
- It must be your primary residence.
- You should have between 30% and 60% equity in your home depending on the age of the youngest borrower or non-borrowing spouse.
- You always own your home; the lender never does.
- Loan proceeds are not taxable. (Check with your tax advisor.)
- No monthly payments are required, and the loan comes due when the last borrower or non-borrowing spouse leaves the home permanently.
- HECM counseling is required.
Contact us for a free, no pressure, no obligation conversation so that we can provide numbers specific to your unique situation.
How Much Money Could I Get?
That is based on the age of the youngest borrower or non-borrowing spouse, the value of your property and the interest rate. Rates are especially low right now and home values are high, so this is the time to investigate whether a reverse mortgage is right for you so that you can benefit the most from a reverse mortgage. The older you are, the more money you can access. (Finally, it pays to be older!) A portion of the loan proceeds are available at closing and will be used to pay off your existing mortgage(s). If there is additional equity, a portion may be available at closing and the remainder one year and one day after the closing.
How Do I Receive the Money?
You have choices! You may receive cash at closing, a guaranteed-growth line of credit, a monthly income stream for the rest of your life or for a period of years, or a combination of these options. If you opt for a fixed rate loan, there is only the cash at closing option. Contact us to see which option(s) will best meet your needs and goals.
What Costs Are Associated with a Reverse Mortgage?
The fees are largely set by FHA so that you will not be charged excessive fees. There is upfront mortgage insurance that is based on the value of your property. This is like the Funding Fee charged on VA loans and the same fee charged on all FHA “forward” loans. It is 2% of the value of your property. (Jumbo reverse mortgages do not have mortgage insurance.) There is an origination fee set by the government, and the usual fees associated with any refinance or purchase such as title fees, credit report, flood certification, underwriting/ processing and recording fees. The only out-of-pocket costs are possibly counseling and the appraisal. The rest of the fees are rolled into the loan.
Is It Required That I Receive Counseling Before Getting a Reverse Mortgage?
Yes. Counseling is required by the government to be sure that you understand how a reverse mortgage works. The signed counseling certificate is needed before the loan can move forward.
Do I Get Taxed on the Money I Receive from my Reverse Mortgage?
The loan proceeds are not taxable and may be used in any way you choose. This is a great advantage over draws on your 401(K) and many retirement accounts where the withdrawal is taxed. Your tax advisor will provide more information.
Do I Have to Pay Any Fees During the Course of my Loan?
Other than paying your property taxes, homeowner’s insurance, HOA dues (if applicable) and maintaining the home there are no out of pocket fees for the life of the loan.
Savvy retirees are realizing that to thrive in the area of retirement finances, a clear understanding of all their options is required, and preparation is key for formulating the best strategy. By reading this book, you will be taking a big step towards equipping yourself with the knowledge you deserve in order to achieve the retirement you desire.
As you already know, retirement is longer and more unpredictable than ever before, and every viable resource is needed to meet financial goals and sleep peacefully at night. One such resource is the newly restructured reverse mortgage.
Historically, retirees have dismissed the reverse mortgage or relegated it to use as a last resort. However, following recent program restructuring, a growing number of retirees with significant savings are incorporating reverse mortgages into their retirement plans.
In this book, I’ll break down how the reverse mortgage has changed and why it can play a key role in retirement. We will explore real-life case studies and practical ways to incorporate it—all in easy to understand, straightforward language. I’ll highlight the many ways reverse mortgages can help:
- Eliminate Monthly Mortgage Payments
- Increase Cash Flow and Preserve Savings
- Reduce the Most Common Risks to Retirement
- Ensure Access to a Reserve Pool of Money
- Add New Dollars to Retirement Savings
- Protect Against Inflation, Declining Property Values, and Unexpected Expenses
- Manage Tax Brackets and Bridge Monthly Income Gaps
- Plus Many More Benefits!
The reverse mortgage may not be the best strategy for you, but I believe every retiree deserves to have a basic knowledge of how it works, in order to decide for yourself if one is right for you, or simply to factor it out of your retirement equation.
By the end of the book, you’ll have a clearer understanding of your options and will be prepared to have open conversations with your adult children and loved ones, knowing all the facts. You’ll be equipped with up-to-date information that enables you to make informed decisions for your financial future and security.
Written by Don Graves, RICP®, CLTC®, CSA, a skilled reverse mortgage specialist with 20+ years of experience in the industry.
Don Graves, RICP®, CLTC®, CSA is president of the Housing Wealth Institute, best-selling author and adjunct instructor at the American College of Financial Services. He is one of the nation’s leading educators on incorporating housing wealth into retirement income planning. Don has been quoted in Forbes Magazine, featured on PBS, and is a sought-after professional speaker whose workshops are helping retirees determine if the reverse mortgage is right for them.
With the current retirement income crisis facing baby boomers and existing retirees, today's asset mangers, insurance agents and hybrid advisors need every viable resource to help their clients and sustain their practice.
In Housing Wealth, American College instructor and reverse mortgage expert, Don Graves, distills more than 20,000 advisor/client engagements over two decades into practical, back-of-the-napkin, common sense strategies.
Through simple case studies and easily applied concepts, the advisor will learn how today's reverse mortgage can:
- Increase Clients' Cash Flow and Preserve Assets from Premature Erosion
- Reduce the Most Common Risks to Retirement Income
- Optimize Retirement Outcomes for the Mass Affluent
- Improve Liquidity and Add New Dollars to Retirement Savings
- Help Advisors Create More Planning Opportunities from Existing Clients and Gain Access to New Ones
- Manage Tax Brackets and Keep Clients within Lower Adjusted Gross Income Boundaries