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OK, What Is A
Reverse Mortgage?
(continued)
Processing Time: On average,
it may require 4-8 weeks to process and close a Reverse Mortgage. This may
even require more time in cases where the home is in need of repairs required
to be acceptable for the program.
 Closing Costs: Most closing
costs are financed into the loan. We can tell you how charges for your
appraisal, title insurance, origination fee and recording fees are handled. We
will be happy to provide you with a Good Faith Estimate of Closing Costs from
information provided by filling out the "Contact Us" form, via telephone or
face-to-face meeting.
Interest Rate: The interest
rate charged varies depending on the Reverse Mortgage program selected by you.
All programs offer adjustable or fixed rates, and the adjustable rate loans have lifetime caps on the maximum
allowable rate. The rates and costs are set by FHA, FNMA and the Private
Investor in the case of higher valued properties. We will be happy to provide
you with a quote using the current rates.
Impact on Income Taxes and Social
Security: Proceeds from a Reverse Mortgage are considered to be proceeds
from a mortgage loan and not considered income. Therefore, the funds received
are not subject to income tax and do not affect Social Security Benefits.
Borrowers receiving Medicaid or SSI may not be affected if the funds from the
Reverse Mortgage are spent in the month received. As always, we recommend that
you consult with your tax advisor for further details and advice.
Repayment: The
Reverse
Mortgage becomes due and payable at the time you permanently leave your home.
The Reverse Mortgage can be repaid either from the proceeds of the sale of the
property or other liquid assets, or in the event of death the heirs can obtain a conventional
mortgage to pay off the reverse mortgage. The loan balance consists of the
financed closing costs, the cash that was advanced to the borrower and any
interest and servicing fees that accrued. Remaining equity belongs to the you
or your heirs. The Reverse Mortgage is subject to a non-recourse limit, which
states that you or your heirs are only required to repay the loan balance or
the fair market value of the home, whichever is less. Should you outlive the
lender's estimate and have the principal go to zero, the home is yours until
you choose to leave it at which time ownership would revert  to
the lender.
For an estimate (and it is just an
estimate) of what we are talking about click on the calculator
If you want to see the steps needed
to obtain a Reverse Mortgage click here.
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