Something to check for when Scheduling Counseling

Before a reverse mortgage can proceed (following the application) it is necessary for the borrower to spend about 90 minutes with a HUD counselor to insure that all of the details of a reverse mortgage are understood.  Many of the counseling agencies charge for the session, however, most face to face sessions in Colorado do not charge.  Since Grant funding for housing programs became a victim of spending cuts in Congress the ceiling on the $125 previously charged has been lifted.

Make sure that before making your counseling appointment you ask if there is a charge!

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Reverse Mortgages are a whole new world after October 4th

On October 4th the scope of reverse mortgages changed where both those that are in need of paying off existing mortgages benefited and those that were considering a reverse mortgage but thought the costs were prohibitive also benefited.  The new HECM Saver products are for those that don’t need all of the money that would have been available previously and don’t want to pay the upfront costs for things like mortgage insurance.  This actually permits those with a short term need for money to consider a reverse mortgage as a viable strategy.

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Costs Associated with Reverse Mortgages

Anyone that has been concerned about the cost associated with reverse mortgages should make sure they discuss this with a trusted advisor as most of the programs have changed to the benefit of the borrower. I recently helped a woman buy a home that was originally going to close in March. It was delayed until April and she brought about $9,000 less to the closing table. She obviously was happy about the delay.

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Reasons to Consider a Reverse Mortgage

If your cash flow has been depleted because your income is lower, your investments are worth less or your expenses have increased (like for medical expenses) a reverse mortgage evaluation may be just what is needed. Most recently I helped two gentlemen who were having cash flow issues by educating them on how a reverse mortgage would help. And, of course, they were both surprised that they did not give up ownership of their homes to the bank, as many people believe. That’s right, the title to the home stays with the borrowers and when the home is sold and loan paid off, any remaining equity goes to the owner or to the estate. Please pass along any questions.

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Refinance if You Can…

There is a great article in the July 20th issue of Kiplinger’s Personal Finance entitled, “Refinance, If You Can.”  It talks about all the issues that exist today about loan qualification that did not exist over the past several years. For those who are over the age of 62 and have sufficient home equity, these qualifications don’t exist.

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