IS A REVERSE MORTGAGE Right for You?
You must qualify to make the payment on taxes, insurance and HOA and any other revolving bills you have.
The property must appraise for enough to fit the HECM formula of age (number of years of life expected to extend) verses the equity. This is the secret sauce.
 |
| lavender wreath |
Home Equity Conversion Mortgage (HECM) are a good idea if you want to stay in your house until the day you die. Sounds rough; but that's what my Mom says. She wants to remain in her home.
With a HECM You eliminate your monthly mortgage payment. The loan
balance grows over time and the value of your estate may decrease over time. Closing
costs add to your financial burden.
You must live in the home as your primary residence,
continue to pay required property taxes, homeowners insurance and maintain the
home according to Federal Housing Administration (FHA) requirements. Failure to
meet these requirements can trigger a loan default that may result in
foreclosure.
Eligibility To be eligible for a HECM loan, some key
requirements are:
• The youngest borrower must be at least 62 years of age
• You must live in your home as your primary residence and
have sufficient equity
• You cannot be delinquent on any federal debt
• Property must be a single family residence, an owner
occupied 2-4 unit home, a condominium approved by the Department of Housing and
Urban Development (HUD), or a manufactured home that meets FHA guidelines
• Must meet financial assessment requirements as established
by HUD Obligations Once you obtain your HECM loan, you must continue to meet
the following conditions to maintain your loan in good standing.
• Complete a HUD approved counseling session
• Maintain your home
• Continue to pay property taxes and homeowners insurance and HOA
• Continue to own and live in your home as your primary
residence A HECM Loan Defined A Home Equity Conversion Mortgage (HECM),
commonly known as a reverse mortgage, is a Federal Housing Administration (FHA)
insured loan which enables you to access a portion of your home’s equity
without having to make monthly mortgage payments.
• Eliminates your existing monthly mortgage payments
• You can stay in your home and maintain the title - you still own the house
• Heirs inherit any remaining equity after paying off the
HECM loan. They can sell or refinance after you pass away
• The HECM loan is FHA insured
Federal
Housing Administration (FHA), you will be charged an up-front mortgage
insurance premium (MIP) at closing of 1.75% and, over the life of the loan, you
will be charged an annual MIP based on the loan balance. Your current
mortgage, if any, must be paid off using the proceeds from your HECM loan. You
must still live in the home as your primary residence, continue to pay required
property taxes, homeowners insurance, and maintain the home according to FHA requirements.
Failure to meet these requirements can trigger a loan default that may result
in foreclosure.
The loan becomes due and payable if you fail to meet any of
the above obligations or the last borrower or non-borrowing spouse passes away.
The heirs must repay the loan in order to inherit the property. Failure repay
the loan may result in foreclosure.
Loan Options There are two types of Home Equity Conversion
Mortgage (HECM) loans. It is important to select the one that best meets your
needs. Liberty offers fixed and adjustable rate HECM options. Either option can
be used to access equity on a home you already own or to purchase a new home.
If you have an existing lien on the property, it must be paid off as part of
the HECM transaction. Both options eliminate monthly mortgage payments and do
not require repayment as long as the loan obligations are met. Determining
Your Proceeds The amount of funds available, also known as the Principal Limit,
from a HECM loan is determined by: • Age of the youngest borrower or eligible
non-borrowing spouse • The lesser of the appraised value of your home, sale
price or the FHA national lending limit • Current interest rates • Balance of
your existing mortgage (if applicable) and all mandatory obligations The funds
available to you may be restricted for the first 12 months after loan closing,
due to HECM requirements. You may need to set aside additional funds from the
loan proceeds to pay for taxes and insurance.
You must live in the home as your primary residence,
continue to pay required property taxes, homeowners insurance, and maintain the
home according to FHA requirements. Failure to meet these requirements can
trigger a loan default that may result in foreclosure.
We order an appraisal from an independent appraisal company. I am not allowed to speak with or consult with the appraiser. You MUST have carbon monoxide detectors and smoke detectors installed in the home BEFORE the appraiser arrives. They go inside all the rooms of the home. They take photographs. They measure the size. You may want to provide them some comparable sales in the form of a list on paper.
All borrowers need to provide current Identification
and be notarized. In addition, any outstanding liens on your property will need
to be satisfied at this time.
Income documentation needed:
Identification with current dates
Legible date of birth (DOB) verification
Legible Social Security Number (SSN) verification
Legible date of birth (DOB) verification
Legible Social Security Number (SSN) verification
Social Security Award letters
Pension 1099
Bank statements all pages past two months
California has a seven day cooling off period from the start estimates, completing the class, then seven week days. This makes sure the borrower has had time to think about the choices.
California has a seven day cooling off period from the start estimates, completing the class, then seven week days. This makes sure the borrower has had time to think about the choices.
Caroline Gerardo Barbeau - please call me C G
Cell phone (949) 784- 9699
NMLS 324982
Location is Irvine
P O Box 1902 San Juan Capistrano CA 92693 if you
need to mail
Equal Credit Opportunity Lender
A reverse can be closed a quickly as twenty days; but typically there is some discussions with
family which I encourage and the process takes forty days
