Did you hear that the $625,500 national HECM loan limit was extended through 2010? The bill was signed by congress yesterday and now we are just awaiting the presidents signature to make it official. This buys our industry much needed time to get the appropriations bill completed. If you want further clarification don't hesitate to contact me.
Reminder: Don't forget to FALL back, Sunday, November 1st is daylight savings!
Have a safe and Happy Halloween Weekend,
Sandy
Saturday, October 31, 2009
Thursday, October 29, 2009
Steps Involved in the Reverse Mortgage Process
Step By Step Process
1. Gather information and contact lenders to determine if a reverse mortgage is right for you. If necessary involve others that you trust, a family member, friend or adviser.
2. Counseling, HUD requires that you received third-party counseling from a HUD-approved agency. The counselor will ensure that you understand your reverse mortgage options. Counseling can be scheduled by calling a member of the National HECM Counseling Network or you can contact HUD directly.
3. Application, complete the application and determine how to receive payment. Options are as follows:
Lump Sum
Monthly Payments (your choice of loan advances for a specific period, or for as long as you live in your home)
Line of Credit (unscheduled payments or installments, at times and in amounts of borrower's choosing until the line of credit is exhausted), or
Any combination of the above three choices
4. Processing, application is processed by your lender who also orders an appraisal, title report, lien payoffs and credit report. The appraiser will determine the value of your home and uncover any structural defects or repairs that may be required following the closing of the loan.
5. Underwriting, upon receipt of necessary information and documentation your lender will finalize the parameters, package and submit loan for underwriting and final approval.
6. Closing, after loan approval a final signing is scheduled. The loan's initial interest rate is calculated and, in most cases, closing costs are financed by the loan. You are presented with closing papers and final figures for signing.
7. Disbursement, following closing you have three business days to cancel the loan. Once this period has passed the loan funds are disbursed and the loan has been applied to any previous debts on the property. You begin receiving payments according to your selected payment option.
8. Repayment, there are no monthly payments to be made during the life of your loan. The reverse mortgage becomes due and payable in full once: 1) the home is no longer being used as a primary residence, 2) it is sold, or 3) the borrower passes away. Upon the death of the borrower, the loan may be repaid from the sale of the home or by refinancing the existing reverse mortgage. All remaining equity belongs to the heirs/estate.
1. Gather information and contact lenders to determine if a reverse mortgage is right for you. If necessary involve others that you trust, a family member, friend or adviser.
2. Counseling, HUD requires that you received third-party counseling from a HUD-approved agency. The counselor will ensure that you understand your reverse mortgage options. Counseling can be scheduled by calling a member of the National HECM Counseling Network or you can contact HUD directly.
3. Application, complete the application and determine how to receive payment. Options are as follows:
Lump Sum
Monthly Payments (your choice of loan advances for a specific period, or for as long as you live in your home)
Line of Credit (unscheduled payments or installments, at times and in amounts of borrower's choosing until the line of credit is exhausted), or
Any combination of the above three choices
4. Processing, application is processed by your lender who also orders an appraisal, title report, lien payoffs and credit report. The appraiser will determine the value of your home and uncover any structural defects or repairs that may be required following the closing of the loan.
5. Underwriting, upon receipt of necessary information and documentation your lender will finalize the parameters, package and submit loan for underwriting and final approval.
6. Closing, after loan approval a final signing is scheduled. The loan's initial interest rate is calculated and, in most cases, closing costs are financed by the loan. You are presented with closing papers and final figures for signing.
7. Disbursement, following closing you have three business days to cancel the loan. Once this period has passed the loan funds are disbursed and the loan has been applied to any previous debts on the property. You begin receiving payments according to your selected payment option.
8. Repayment, there are no monthly payments to be made during the life of your loan. The reverse mortgage becomes due and payable in full once: 1) the home is no longer being used as a primary residence, 2) it is sold, or 3) the borrower passes away. Upon the death of the borrower, the loan may be repaid from the sale of the home or by refinancing the existing reverse mortgage. All remaining equity belongs to the heirs/estate.
Wednesday, October 28, 2009
Reverse Mortgage 101
The steps to a Reverse Mortgage are the same in a “Traditional (Forward) Mortgage as in the Reverse Mortgage.
…… the difference only lies in the qualification process and the repayment process.
1. The amount of equity you can access depends, in part, on your age. The older you are, the more money you qualify for. The age of the youngest person on title will determine how much money you are able to receive.
2. You do not need to own your home free-and-clear to consider a reverse mortgage. In fact, one of their most popular uses is the elimination of a monthly mortgage payment. As an example, a retired couple on a fixed income with a $1,200 per month mortgage payment would give themselves a $1,200 a month raise in cash flow if they replace their current mortgage. Many seniors that could not afford to retire because of a mortgage obligation have been able to do so after eliminating their monthly payment through a reverse mortgage.
3. Counseling by a HUD approved independent third-party is required for all borrowers undertaking a reverse mortgage as a consumer protection. Counseling may be conducted face-to-face or by telephone.
…… the difference only lies in the qualification process and the repayment process.
In a Reverse Mortgage:
There is “No Income” requirements for the reverse mortgage, no credit score… and
There is no repayment requirements for as long as continue to occupy the home.
1. The amount of equity you can access depends, in part, on your age. The older you are, the more money you qualify for. The age of the youngest person on title will determine how much money you are able to receive.
2. You do not need to own your home free-and-clear to consider a reverse mortgage. In fact, one of their most popular uses is the elimination of a monthly mortgage payment. As an example, a retired couple on a fixed income with a $1,200 per month mortgage payment would give themselves a $1,200 a month raise in cash flow if they replace their current mortgage. Many seniors that could not afford to retire because of a mortgage obligation have been able to do so after eliminating their monthly payment through a reverse mortgage.
3. Counseling by a HUD approved independent third-party is required for all borrowers undertaking a reverse mortgage as a consumer protection. Counseling may be conducted face-to-face or by telephone.
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