ABOUT REVERSE MORTGAGES

Get the facts about a reverse mortgage!

In this video, Tim Oddo, Reverse Mortgage Specialist, explains what a reverse mortgage is.

Simply stated, a reverse mortgage is a loan secured to a home where the homeowner remains on
title and they (not the bank) own the property. The most common reverse mortgage that we have today is called the HECM (home equity conversion mortgage).

With a reverse mortgage, you can stay in your house for the rest of your life with no monthly mortgage payment. This allows you to generate cash flow
because you have no monthly mortgage payments due.

With a HECM reverse mortgage you can actually make a monthly payment if you choose to – it’s really a flexible repayment loan. However, most homeowners choose to take the no monthly payment option.

If you have any questions or you need more information about this powerful financial planning tool, give me a call!
 

How Can I Qualify For A Reverse Mortgage?

Here are some of the key distinctives about a HECM reverse mortgage:
A HECM reverse mortgage is a deed restricted loan based on age.
The minimum age for at least one of the borrowers in the home is 62 years of age or older.
So even if you’re 50 years old and you own your home free and clear, you don’t qualify for a HECM reverse mortgage.
The second key distinctive is your home title. This is the biggest misconception about a reverse mortgage. In a reverse mortgage the borrowers
remain on title, they continue to own the property , NOT the lender.
Any real equity and any real appreciation above what you have in the reverse mortgage is still your equity.
The third distinctive is about prepayment. There is no prepayment penalty on a HECM reverse mortgage.
If you don’t think you’re going to be in your home for at least 2 years I would recommend not doing the reverse mortgage. This is because there are
upfront costs that need to be paid.
But the fact is is you can prepay this mortgage off at any time. If you had to sell after two or three or five years there’s no penalty whatsoever.
fourth thing payments
The 4th distinctive is there’s no monthly mortgage payments. We do this loan to create more cash flow. Cash flow is especially important when you’re retired or semi-retired and you want to have fun, spend more time with your kids and/or your grandkids. You want to go on more vacations. Or you just want to help pay for medical expenses.
A reverse mortgage, when properly executed, creates financial freedom.

If you have any questions or you need more information about this powerful financial planning tool, give me a call!
 

Does The Bank Own My Home?

“Tim, I’ve heard from several different people that the apprehension about this reverse mortgage is that the bank will own your home. Can you talk a little bit more about that because I’ve heard you say that that’s the biggest misconception about reverse mortgages. ”

People are concerned if you do a reverse mortgage, when the homeowners pass away the home goes to the bank. This is simply not true.

With a reverse mortgage the homeowners’ own the home whether they live there for two years or twenty two years. When they pass away the home goes to the heirs and then the heirs can sell the home and take whatever equity is left in the home at that time.

At the time when mom and dad pass away and they had a reverse mortgage the heirs have two main choices:

(1)They’re either going to refinance whatever’s owed on that reverse mortgage at that time and then they could move into the home and live there
or
(2) They could sell the home and pay off whatever’s owed on the reverse mortgage and then the difference being the equity that they would take with them as part of their inheritance from from mom and dad.

If you have any questions or you need more information about this powerful financial planning tool, give me a call!
 

Can I Get A Reverse Mortgage If My Home Is Paid Off?

If you have any questions or you need more information about this powerful financial planning tool, give me a call!
 

Will I Ever Owe More Than The House Is Worth?

Can you obtain a reverse mortgage and then outlive the loan?
Can you ever get stuck with owing more than the house is worth?
Can your heirs ever get stuck with a deficiency judgement if they owe more than the home is worth?
The short answer is no and here’s why.
..watch video for explanation with numbers…
This loan protects the homeowners and their heirs until they exit the property.

If you have any questions or you need more information about this powerful financial planning tool, give me a call!
 

Why Get A Reverse Mortgage If My Home Is Paid Off?

Why would someone do a reverse mortgage if they already own their home free and clear?

That’s a really good question a lot of people think if they own your home free and clear there’s really no need to do a reverse mortgage.
The truth is is that a reverse mortgage when properly understood and when executed and used in the right circumstances can really become a powerful tool for retirement income planning to help you do some things in retirement that you just can’t do even when you own your home free and clear.

One of the big ideas about buying a reverse mortgage is we’re gonna use all of our equity. That just simply is not the case. Really what we’re talking about especially on a free a free and clear home is the ability to be able to use that money for a bunch of useful things.

So what would be some of those things? There aren’t any limitations to what we can use those funds for. They can practically be used for just about anything under the sun. What we see a lot of today is people use it for home improvements. You’ve been living in the home a long time and it needs a facelift or repair.

Perhaps people would use it to take one great vacation every single year. People have used it to buy a small second home.

It’s very flexible and another thing is is that the funds from a reverse mortgage are actually not taxable. The minimum age to qulaify for a reverse mortgage is 62. If you’re 62 and older and you have a significant amount of equity in your home or perhaps even on your home free and clear you really need to be looking this as an additional tool to help you in your retirement years.

Whether you’re retired or even semi-retired it’s a smart way to kind of create an insurance policy to ensure that you have money there in case you live to be 100! I just recently had a customer that was 94 years old. Her reverse mortgage allowed her to stay in her home.

If you have more questions let’s set up a time and I’ll come out and meet with you at your home or you can come to my office. It’s best to go over the numbers and figure out what the options look like and see if it’s a good option for you.

If you have any questions or you need more information about this powerful financial planning tool, give me a call!