Reverse Mortgages
By Dave Mattull
Generally speaking, your retirement funds may come from savings, investment income, and Social Security. But now, there’s another source that may help you complete the longevity planning puzzle. Reverse mortgages are becoming increasingly recognized by homeowners and financial advisors as a smart and safe way to access an important retirement asset: home equity. Most reverse mortgages are government-insured Home Equity Conversion Mortgages (HECMs). You will often hear the terms used interchangeably. Available exclusively to people age 62 and older, a reverse mortgage could help you live more comfortably and be more financially prepared for the future.
For example, you can use a reverse mortgage to:
- Avoid selling investments at a loss in a “down” market
- Establish a “stand-by” line of credit that you can tap as needed.
- Unlike a traditional Home Equity Line of Credit (HELOC), a reverse mortgage line of credit cannot be reduced or revoked, as long as the terms of the loan are met. The unused line of credit grows over time.
- Supplement retirement income with tax-free* funds
- Delay collecting Social Security for a larger monthly benefit
- Pay for medical or long-term care costs
- Finance the purchase of a more suitable home, with no monthly mortgage payments**
Some of the benefits of a reverse mortgage:
- The ability to use your home equity to help you maintain a more comfortable standard of living.
- Allows a homeowner to live in their own home.
- Provides funds that can reduce month-to-month obligations.
- Eliminates required monthly mortgage payments.
- Healthcare needs: Pay for healthcare and prescription drugs.
- Home improvement/home care modifications.
- Provide a cushion for the unexpected.
- Travel; weddings; insurances; debt consolidation.
- Assist in purchasing a new home. Yes, you can use the Reverse mortgage to purchase a home.
- Financial security and peace of mind.
- Great flexibility. You can choose to take your proceeds as a line of credit, monthly advances for a set period of time, a monthly stream of funds for as long as you live in your home, a lump sum or a combination of these options.
- No monthly mortgage payments. If you qualify and have an existing mortgage, home equity loan, or any other type of debt, you can pay it off and reduce your monthly expenses. Or, if you own your home free-and-clear, you can get the additional funds you need with no minimum monthly repayments required. (As the homeowner, you remain responsible for paying property taxes, homeowners insurance, and homeowner’s association dues if applicable.)
As you explore your reverse mortgage options with First Integrity Mortgage Services, Inc., we will serve as your guide through the entire loan process. Here’s a basic overview of what you can expect. To learn more, contact us today.
1. Education: I will help you determine if a reverse mortgage is the right solution for you — and if so, which type best fits your needs and goals. To help you make an informed decision, I’ll answer all your questions, assess your individual needs and financial situation, thoroughly explain everything, and prepare you for your independent counseling session. I encourage you to include your family members and trusted advisor(s) in your decision-making process.
2. Independent Counseling: To ensure that you understand all aspects of a reverse mortgage, you are required to have a session with an independent counselor who is approved by the U.S. Department of Housing and Urban Development (HUD). It usually takes about 60 to 90 minutes and can be done in-person or over the phone.
3. Application: I will help you complete the application and collect your documentation. I will let you know exactly which documents you’ll need to provide.
4. Property Appraisal, Loan Processing, and Approval: We will submit the paperwork and we process your application. As a matter of fact, we order a home appraisal, which determines the exact value of your home. We’ll also order title work and existing mortgage payoff amounts. An underwriter will then review your application for approval.
5. Closing: Once the loan is approved and final documents are ready for your signature, we’ll contact you to schedule your loan closing, which can take place at your home. Any existing mortgage(s) will be paid off with a portion of the proceeds from your reverse mortgage. After the closing and any applicable rescission period, the loan will fund and you will receive your money.
Am I eligible?
To be eligible for a reverse mortgage, you must:
- Be at least 62 years old
- Live in the home as your primary residence
- Have sufficient home equity. (Contact your First Integrity Mortgage Services to find out if you have enough home equity to qualify.)
- Not be delinquent on any federal debt
- Participate in a consumer information session held by an independent counselor who is approved by the U.S. Department of Housing and Urban Development (HUD)
Licensed mortgage professionals at First Integrity Mortgage use their experience, expertise, and the special programs available to discover your goals, present multiple relevant options, and recommend the program that best meets YOUR needs!
To get all the facts, please contact Dave Mattull.
Office phone number: 314-878-4900
Cell phone number: 314-570-4970
Email: davem@firstintegrity.com
First Integrity Mortgage Services is a locally owned mortgage banker located at 77 West Port Plaza, Suite 200, St. Louis, MO 63146, NMSL#276593.
Visit us today at www.firstintegrity.com and see the difference!!
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