Did you know there are more reverse mortgages in Philadelphia, PA than anywhere else in the country? Reverse Mortgage Reality is the #1 Trusted Reverse Mortgage provider from Philly to Bucks County, Chester County, Montgomery County, Delaware County, Berks County and all across the state of Pennsylvania.

Since 2008 we’ve helped over 431 seniors learn about and get reverse mortgages.

Here are the types of folks we help…

• Seniors looking for reverse mortgage information for themselves
• Family members who are looking for potential help for loved ones
• Trusted advisors like attorneys, CPAs, financial advisors and home health agencies

EDUCATION FIRST

At Reverse Mortgage Reality, we have an Education First model. Here’s how it works…

• First, we TEACH you about how reverse mortgages in Pennsylvania work.
• Next, we LEARN about your situation. Together, we figure out if a reverse mortgage is an appropriate solution that will help you.
• Finally, IF a reverse mortgage is the right option for you, we’ll walk you through the process, hand in hand.

WHAT TO DO NEXT

No matter where you are in the information gathering process, we’ll be glad to help. Please call locally (267) 289 1095 or click below for a detailed proposal.

CLICK HERE FOR A FREE REVERSE MORTGAGE ANALYSIS

Now, while we’re here, let’s learn a little bit more about what reverse mortgages are and how reverse mortgages work.

WHAT IS A REVERSE MORTGAGE?

A reverse mortgage is a program that’s only available for seniors who are 62+ who own their home and want to stay there. It allows you to take PART of your home’s value, in tax free cash, without requiring monthly payments.

If you’re wondering why you don’t get the ENTIRE value of your home, its because you aren’t selling it to the reverse mortgage company. You are still the full owner. We just get paid back when you(or both you AND your spouse) pass away or sell your home. More on that later….

When you get a reverse mortgage, first, we pay off anything that’s owed on your home. This means a first or second mortgage, a HELOC, any sort of loan, taxes or judgments.

Next, if you qualify for extra money, you can take it up front in 2 lump sums, you can take it in monthly income(just like an annuity), or you can leave it in a line of credit that actually grows tax free over the years.

If you’d like a reverse mortgage calculator…click below and we’ll show you how much cash you can get and your options.

CLICK HERE FOR A FREE REVERSE MORTGAGE QUOTE

Here are your options in Philadelphia reverse mortgage options. Reverses are broken into 3 types, the federally insured reverse mortgage(HECM), a JUMBO reverse mortgage and the reverse mortgage for purchase. Below we’ll go over each option…

✅ HECM

This stands for Home Equity Conversion Mortgage. This is the most common type of reverse on the market today. It covers the above characteristics under “What is a reverse mortgage?”

A HECM is insured by the FHA and covered by “MIP”, which is a sort of federal insurance. It protects your heirs in case the market drops(think 2008).

In addition, HECMs cover homes up to a maximum value of $970,800. Yes, we can do HECMs for pricier homes, but there might be better options.

✅ JUMBO REVERSE MORTGAGE

A jumbo is for homes who have higher values than $970,800. Being outside of the FHA, high value home owners can get more cash from a jumbo.

For example, a senior who’s home is worth $1,300,000 would be able to get FAR MORE CASH from a JUMBO Philadelphia reverse mortgage than a traditional HECM.

✅ REVERSE MORTGAGE FOR PURCHASE

A reverse mortgage(or HECM) for purchase is a unique tool that allows seniors to “rightsize” to their forever home and remain financially stable. With a HECM for purchase, a senior will invest approximately 45-75% into their home with the reverse covering the rest. The senior will have no mortgage payments to pay for the rest of his or her life.

Here’s an example of how a reverse mortgage for purchase works. Frank is 68 and moved from New Jersey to Philadelphia to be closer to his grandkids.

Frank found a wonderful home in a 55+ Community that he purchased for $403,000. Because of his age, Frank invested just $216,000 into the home, and the reverse mortgage covered the remainder. And of course, Frank has no mortgage payments. He just has to stay current on his property taxes, homeowner insurance and HOA dues.

Frank couldn’t be any happier with his reverse mortgage…he’s got money in the bank AND he doesn’t have any monthly payments.

HOW REVERSE MORTGAGES HELP SENIORS

You just briefly read about how Frank used a reverse mortgage to purchase his forever home close to his grandkids. How else can a senior use a reverse mortgage in Philadelphia, PA?

✅ Eliminate Your Existing Mortgage/Bills and Save Cashflow

✅ Pay for Home Health Care to Age In Place

✅ Buy Your “Forever Home”…Just Like Frank

✅ Get Annuity Style Income(but without the taxes)

✅ Create a Line of Credit that Grows Over the Years(again tax free growth)

✅ Fund a Business

✅ Take Care of Family Members

✅ Aid In “Grey Divorce”

✅ Self-fund Long Term Care(by either buying a policy OR setting your own line of credit)

✅ Create Another Bucket of Money to Draw From

✅ Stop Drawing Down Retirement Accounts(and save the taxes too)

✅ Etc Etc Etc

The bottom line is, if you’re looking information, have a question or want a quote we’d be glad to help. We help folks all over Pennsylvania(and the country), but our hearts are in Philadelphia. Reverse Mortgage is a wonderful program for senior citizens, and we’d be more than happy to walk you through the process…together. For contact information…

CALL US AT (267) 289 1095 OR

CLICK HERE FOR A FREE REVERSE MORTGAGE QUOTE

The post Philadelphia Reverse Mortgage – Reverse Mortgage in Philadelphia, PA first appeared on Reverse Mortgage Reality.

This question shouldn’t have been shocking. After all, the name of the program is “reverse mortgage”, so conceivably it IS reasonable to think that to “reverse” a mortgage, you need to HAVE a mortgage.

Fortunately, the answer to the question is YES, and here’s a quick video showing how it works(if you’d like to just read instead of watching the video…feel free to follow below).

JERRY’S STORY

First, let’s talk about Jerry. Jerry is a client and a good friend of mine. He was introduced to me by his financial advisor, who recommended a reverse mortgage credit line(more on the WHY later). Jerry just came to me when he was 58; 4 years before he turned 62(CLICK HERE to see how old you have to be to get a reverse mortgage).

This guy is a planner.

Anyway, Jerry has a home in Philadelphia that’s worth about $240,000. He’s a retired Pharmaceutical salesman, and doesn’t have a mortgage. On top of that, Jerry’s got a good bit of money in his retirement funds.

So why would Jerry get a reverse mortgage?

Jerry is a young guy(his wife is 62 as well), and he leads a fun life. He’s got a condo down the Jersey Shore. He likes to enjoy his life. And he retired early.

But(and this is important)…the majority of his money is in QUALIFIED FUNDS.

***Sidenote-Qualified funds basically means money that’s taxable when you take it. So if you grab $20,000 for a new roof, the REAL bill is closer to $25,000. In other words, Uncle Sam’s got his hand in the “Qualified Fund Cookie Jar”.

So every time Jerry takes a dollar, the good ol’ government gets a quarter.

Jerry’s financial advisor, and Jerry himself were both worried that at the rate he’s going, he might run out of money later down the road. When it comes to retirement, nobody has a crystal ball. The costs of home healthcare have crippled many a millionaire’s savings accounts.

Because of this, Jerry’s advisor told him to reach out to me way back when he was 58. He was pretty sure that Jerry could get a reverse mortgage even if he didn’t have a mortgage, but they had to put the plan together. So we planned, and then we waited.

JERRY’S REVERSE MORTGAGE SOLUTION

In the end, Jerry got $115,000 to put into his reverse mortgage line of credit. Just like a regular HELOC, no interest is charged unless money is taken, but besides that the reverse mortgage credit line has a couple of unique features.

✅ First, when a senior DOES access his or her money, he or she has no mortgage payments(I’m pretty sure you already know that though).

✅ Next, when a senior DOESN’T take his money, the reverse mortgage credit line grows over time. Here’s how it works…

Jerry’s original line of credit of $115,000 will increase at about $6,000 a year in the beginning. Then, as the growth starts to compound, the annual appreciation will hit $7,000, then $8,000 then $10,000. Simply put, every year the un-used portion of Jerry’s line of credit grows.

✅ This leads us to the 3rd unique feature of the reverse mortgage line of credit. All of the growth is TAX-FREE(at this point I should state that I am not giving tax advice, nor am I licensed to do so. But this information comes from over 400 reverse mortgages done).

How can all this growth from Jerry’s LOC be tax free? Well, simply put, its because Jerry is borrowing money. One day the money that JERRY TOOK will need to be paid back(when he passes away or sells the home). This mechanism is very similar to cash value life insurance.

DOROTHY’S STORY

Dorothy is different than Jerry. She’s an 87 year old widow, who lives out in the suburbs. Dorothy is a lovely lady(to learn more about Dorothy CLICK HERE) who just needed a little help.

Dorothy is free and clear also, and her home is worth a little bit over $400,000. But Dorothy is just bringing in social security, and has ran through a good portion of her investments. Her property taxes are through the roof, and speaking of roofs…

Three months ago, Dorothy was forced to write a large check to pay for a new roof😬

So, despite NOT having a mortgage, Dorothy needed help. And the best way to help her was to give Dorothy a reverse mortgage!

In the end, Dorothy was able to take a large percentage of her home’s value in tax free cash to add to her bank account. With that money(and the 2nd year reverse mortgage credit line funds) Dorothy will live in her home for the remainder of her life.

We also have Carol’s story, but go ahead and watch the video to learn more about Carol.

Now, whether you have a mortgage or you don’t, if you need information about reverse mortgages I’d personally be glad to help. You can reach me at jasone@reversemortgagereality.com or (267) 289 1095. Feel free to give me a shout and I’ll do my best to help!

The post Can I Get a Reverse Mortgage If I Don’t Have a Mortgage? first appeared on Reverse Mortgage Reality.

Dorothy and her husband did everything right for years. They raised wonderful children, took care of themselves, and over time paid their mortgage down to 0. When Mr. D passed, Dorothy had to “re-boot” and tweak her habits. Suddenly, the FAMILY fixed income was down to just Dorothy’s fixed income(which wasn’t a ton to write home about).

Behind Dorothy’s fixed income were some investments. Just like a good number of seniors, Dorothy and Mr. D had saved over the years, and now she had a nice little nest egg🥚 to live off.

But one year turned into 5 years, which turned into 15 years. Time flew by for Dorothy as it does for all of us.

In those years, Dorothy kept picking at her investments. She needed to pay taxes(the property taxes in Dorothy’s neck of the woods are OUT OF CONTROL), she had to maintain the property, and she had grandbabies to treat😍

Then, she needed a new roof. After paying for the roof, Dorothy was concerned. She reviewed her finances with her attorney, Rosemarie, who just happens to be a financial whiz👩‍🏫

Rosemarie was worried that Dorothy was in real danger of her money running out while she was still alive, so she recommended that Dorothy look into a reverse mortgage. Rosemarie’s goal was to fortify Dorothy’s bank account; she wanted Dorothy to have enough money so that she wouldn’t have any more financial worries…no matter how long she lived.

Dorothy had heard all sorts of negative talk about reverse mortgages, so she brought a financially astute friend in for our first meeting. Some of the questions they both had(and my answers) were…

❓ How can I get my money?

✅ While you can get your money up front in a lump sum, monthly in annuity style payments, or in a credit line, Dorothy chose to take a partial lump sum to replenish her bank account. Then, she left another portion in a reverse mortgage line of credit that actually grows tax free over the years.

❓ Does the bank own my home, or do I keep it?

✅ This is a question that many folks have. Dorothy stays on the deed and the reverse mortgage is just a lien on title(just like any old mortgage). She has full control of the home.

❓ Can my kids get my home when I pass?

✅ Another great question! When Dorothy passes, her home will be passed down to her heirs. They’ll get the house, and they can either sell it, refinance it, or pay it off in cash. Dorothy’s kids don’t want the house though, so they’ll sell it, the reverse mortgage company will get paid back, and Dorothy’s kids will get the left over money.

❓ If I get a reverse mortgage, is there any way I can lose my home?

✅ Yes there is. Dorothy needs to keep up on her property taxes and homeowners insurance, and if her (new) roof blows off the home, she needs to replace it. With that said, Dorothy IS a responsible homeowner, and has consistently paid her taxes on time. And there are no reverse mortgage police who will ever check on the home’s condition(after the initial appraisal of course).

❓ How much money can I get?

✅ I’m not going to share exactly how much money Dorothy received, but we qualify folks based on their age and the value of their home. A senior of Dorothy’s age gets between 60-70% of her home’s value. The rest of the equity stays in her home.

❓ So why is there so much negativity about reverse mortgages?

✅ Well, up until about 5 years ago, reverse mortgages weren’t really safe for some people. Anybody who was 62 or older and had equity in their home could get one. There were no other qualifying requirements. Problems came in when irresponsible people(or folks who couldn’t afford to keep up on their bills) took reverse mortgages and didn’t pay their property taxes.

Since May of 2015, reverse mortgages have changed for the better. We make sure that seniors have a history of on time payments AND that they can afford their senior living expenses. If they can’t we may be able to hold a LESA(lifetime expectancy set aside) where we pay their property taxes and homeowners insurance for the rest of their life expectancy. If that doesn’t work, we’ll turn the loan down.

Below is a video interview that I did with Dorothy. It’s pretty casual and short. But check it out and let me know what you think. Of course, if you’d like more information feel free to reach us at jasone@reversemortgagereality.com or (267) 289 1095.

The post Dorothy’s Reverse Mortgage Review first appeared on Reverse Mortgage Reality.

WHY DOES DAVE RAMSEY HATE REVERSE MORTGAGES?

About a year or so back, Dave Ramsey put out a nasty video on YouTube about reverse mortgages. In his opening monologue, he couldn’t see why a 92 year old lady who needed a little bit of cash to live comfortably would take a reverse mortgage.

Uncle Dave argued that she should take a 15 year mortgage(you know, the kind where she’d have to make mortgage payments until she was 107). For those who aren’t that financially literate, he failed to point out that the monthly mortgage payment of a 15 year mortgage is higher than a 30 year mortgage(or a reverse mortgage…but that one’s obvious), and that very few seniors on fixed income are likely to be able to afford it.

The fact that a  person with a pretty prominent following would say something like that is irresponsible, dangerous, and deserves an educated response.

As usual, my main response is in a video…so if you like these sorts of things, click below to watch.

Now that you’re done watching, let’s pow wow for a bit. Dave Ramsey is seen as a financial guru to many people. He hates reverse mortgages(his words, not mine), but he has other “unique” ideas about money as well.

IS IT A 3% RULE OR AN 8% RULE?

The most striking view of his that I disagree with the most(besides his reverse mortgage babble) is that retirees should withdraw 8% of their retirement portfolio each year. Remember, many financial experts dictate that one can “safely” take no more than 3% annually.

Why just 3%(it actually used to be 4%)? Here’s the deal, as of 2019 the stock market has been humming. Which obviously is great for all of us stock owners.

But remember what happened in 2008? If you don’t, here’s a quick refresher. In 2008 many stocks imploded, and the market actually lost a little over 50%. Now, if you’re still working, you’re feeling the pain, but you’ve got time to recoup that money.

But if you’re retired and on a fixed income its a different story. When a market drops 50%(or even just 20 or 30 percent), it is very difficult for it to recover to its original point. Even in a very aggressive “Bull” market it will still take years. And seniors just don’t have that time to wait for recovery.

Now, let’s talk about an example. Sarah is in her 80’s and depending on her investments to live. She listened to Dave Ramsey, who told her she should be taking 8% out of her retirement accounts each year. Now, common sense(or is it MATH) dictates that drawing money out of an investment that’s already dropping will cause that investment to run out of money quickly. At a 4% annual withdrawal its scary. 8% is SUICIDE.

Not to mention that because she’s in her 80’s, Sarah won’t have enough time for the money to build back, even if the economy does incredibly well.

Now in Uncle Dave’s mind, your retirement accounts should average a 12% performance over the years. But what about seniors who experience a “Bear” market like 2008? At that point, drawing your accounts down at 8% a year, again is suicide.

This is just one example that hopefully sets the table for Dave’s wisdom on a product that he obviously doesn’t understand; the reverse mortgage.

Dave’s argument with reverses goes as follows…

✔ People with reverse mortgages have lost their homes due to tax foreclosures, so they must be unsafe.

✔ Reverse mortgages have interest rates higher than the average 15 year fixed rate, so they must be rip offs.

Let’s tackle both of these issues.

First, it is true that folks with reverse mortgages have lost their homes to tax foreclosure. In fact, before the reverse mortgage rules changed in 2015, there were quite a few reverse mortgage tax foreclosures.

HOW SENIORS HAVE LOST THEIR HOMES IN A REVERSE MORTGAGE

Back before May of 2015, if you had a pulse and equity in your home you could get a reverse mortgage. Lots of times seniors used reverses as “bailouts”, to get them out of a mortgage that they were behind on. Because the industry didn’t check income, they couldn’t verify if a senior could afford to stay in their home AFTER they got a reverse mortgage.

Now, as responsible homeowners, we all realize that we’ve got to pay our property taxes, or eventually the Tax Man will Cometh. But some seniors either couldn’t afford their property taxes, or decided not to pay them. Either way, because the taxes were delinquent the senior eventually lost their house.

THE MORAL OF THE STORY IS PAY YOUR PROPERTY TAXES AND YOU WON’T EVER LOSE YOUR HOME

But then came May of 2015. Fortunately, the experts at HUD and the FHA enacted a financial assessment, which led to only seniors who could actually afford to stay in their home long term being able to get a reverse mortgage.

Here’s how it works. If you have a pattern of lateness on your bills, or you don’t have enough income to afford all of your bills, the reverse mortgage must set up an escrow account for your property taxes and homeowners insurance for the remainder of your lifetime expectancy. By the way this is called a LESA(lifetime expectancy set aside).

If the loan isn’t big enough to fund the LESA, then you won’t qualify. Again, we don’t want to loan money to people who aren’t financially able to stay in their homes long term. It just doesn’t make sense.

This LESA went a LONG way to ensure that reverse mortgages weren’t temporary band aids. These are supposed to be loans that will keep you in your home for the rest of your life, with financial security.

RIGHT NOW TODAY’S NEW REVERSE MORTGAGE IS SAFER THAN EVER

It’s just unfortunate that “experts” like Dave Ramsey(and yes Suze Orman too) don’t recognize this reality.

Now, let’s look at Uncle Dave’s next issue with reverses.

Dave Ramsey states that because reverse mortgage interest rates are slightly higher than regular mortgage rates, that they are a rip-off.

He’s right that the rates are higher. But, when you have an 83 year old senior who needs to get rid of her mortgage payment so she can afford to live in her home(where she REALLY WANTS to live), how does any other mortgage(even one with lower rates) make sense?

A slightly higher interest rate does not impact our senior at all, because she doesn’t need to pay it on a month to month basis(or ever). I will step in and say the she DOES NEED to keep her property taxes and homeowners insurance current(as you probably know).

DOES IT MAKE ANY SENSE FOR A SENIOR ON FIXED INCOME TO GET A 15 YEAR MORTGAGE WITH A HIGH MONTHLY PAYMENT?

Yes, its also true that a senior’s heirs will get less out of the home than if the senior didn’t get a reverse mortgage. But, did you know that with a reverse mortgage the kids will get your home when you pass away?

And what’s more important, living in YOUR home(that you paid for with your own money) comfortably or struggling so you can give your children a few dollars?

Now, I’m the last guy to say that reverse mortgages are for everybody. They aren’t.

If you’re looking for a quick fix, this isn’t a good loan for you.

If you won’t be able to afford your regular expenses even with a reverse mortgage, you need to seriously consider downsizing.

On the other hand, if you own your home and have some equity that you’d like to use, its worth investigating. Be objective. Look at the pros and cons.

And then if you qualify(by the way, not everybody qualifies for a reverse mortgage), we’d be glad to show you EXACTLY how it would work for you and your financial situation.

To get in touch, feel free to email us at jasone@reversemortgagreality.com or call (267) 289 1095.

The post Why Does Dave Ramsey Hate Reverse Mortgages? first appeared on Reverse Mortgage Reality.

Since the dawn of (reverse mortgage) time, reverse mortgage companies have always checked folks’ credit.

While previously we were just looking to find bankruptcies and judgments, since 2015 its gotten a little bit trickier.

Here’s a quick, under 2 minute video on whether your credit score matters when getting a reverse mortgage. If you can’t see if or if you’d just prefer to read, follow below where I’ll give you a full description.

Welcome back. Now if you watched the above video, you are now a reverse mortgage credit score expert!

If you didn’t watch it(or prefer just to read)…here’s the information you’re looking for.

BUT FIRST, IF YOU NEED IMMEDIATE HELP, YOU CAN ALWAYS CALL US DIRECT AT (267) 289 1095 OR EMAIL jasone@reversemortgagereality.com

First, we can help folks with credit scores in the 400’s and we can help folks with credit in the 800’s. As an example, today I took an application from a wonderful lady who’s middle credit score is 808.

MY MAIN POINT IS THAT CREDIT SCORE DOES NOT MATTER. AT ALL. 

What DOES MATTER is credit characteristics.

First, if you’re on time on your mortgage and bills the reverse mortgage process will be very simple and straightforward. You’re financially responsible and we don’t need to vet you any harder than normal.

When we see someone who is habitually late on their bills, we may structure the reverse mortgage a little bit different than what you see on the TV commercials. By the way, “habitually late” means either you’ve been late on your mortgage, bills or property taxes more than once or twice.

BY THE WAY, IF YOU’VE BEEN LATE DUE TO UNFORESEEN CIRCUMSTANCES, YOU’LL BE OK. 

I recently helped a wonderful widow who had been current on her mortgage her entire life, until 9 months ago. Then, Rosie missed her mortgage and credit card payments for 3 months. Naturally, being on fixed income, crawling out of that hole is darn near impossible. She needed help, and she needed it yesterday.

When we looked into her situation, she told me that she had a heart attack and was in a medically induced coma for 3 weeks. Then when she came to, she was so overwhelmed by her situation that it took her over a month to stabilize. She had no husband or close family to help. When she finally was released from the hospital she realized the awful situation that she was in.

Here’s the point to this story. Even though she was behind on her bills, it was due to her heart attack and hospitalization. She was not(and never had been) financially irresponsible. We were able to prove that this was an unforeseen circumstance by providing medical bills, and our underwriters cleared the reverse mortgage to go forward.

By the way, now Rosie is loving life. She’s living comfortably and most importantly, she’s healthy again😍

BUT WHAT IF ROSIE JUST MISSED HER MORTGAGE PAYMENTS WITHOUT AN EXCUSE?

We can still help the “Rosie’s” out there, but the process is slightly different. The best way to explain this is through an example.

I’m currently helping an 89 year old gentleman who is unfortunately in foreclosure. His son took a mortgage against dad’s home and refused to pay it…thus the real danger of losing his home.

If you’d like to know my personal thoughts on this…we’ll just leave it at “some people are UNBELIEVABLE😠”

Anyway, because dad is in a foreclosure and thus has been late on his mortgage, we aren’t just paying off his mortgage off. Our reverse mortgage is also setting up an escrow account(called a Lifetime Expectancy Set Aside or LESA) to pay his property taxes and homeowners insurance for the rest of dad’s life.

By the way, to read EXACTLY how this works, read the article here. Just so you know, the article talks about foreclosure, but the same “mechanism” is followed any time there is a Lifetime Expectancy Set Aside.

SO THE BOTTOM LINE FOR DAD IS THAT HIS HOME WILL BE SAVED AND HE’LL NEVER HAVE TO PAY TAXES OR INSURANCE AGAIN. NOR WILL HE EVER WORRY ABOUT LOSING HIS HOME. 

Dad is through the roof and his family members couldn’t be happier😁

Now lets summarize what we just learned.

First, in a reverse mortgage, credit score in itself DOES NOT MATTER.

Next, credit characteristics DO MATTER.

If there’s been a late or two in the past…NO BIG DEAL.

HOWEVER, if there’s been a patter of lateness, we’ll require a lifetime expectancy set aside or LESA. This is just a fancy way of saying that we’ll pay your property taxes and homeowners insurance for the rest of your life.

This is the reason why we check folks’ credit. We need to make sure they can afford their bills. Even with a reverse mortgage, property charges get expensive. There are some people who are so far behind that getting a reverse mortgage won’t even help them. Then they need to downsize.

Furthermore, we check seniors’ income as well. Any income source is ok, whether its social security, a pension or full/part time employment. In fact, we can also look at assets(which are 401k’s, investment accounts, savings accounts etc) and qualify them as “potential” income. The vocabulary term for this is “dissipation”.

All we need to do is ensure that you have enough money coming in to pay for your property taxes, homeowners insurance(and other homeowners charges) and expenses on your credit report. We’ll also make sure you’ve got enough for your senior living expenses like groceries, utilities and health insurance.

Again, we just want to make sure that you will truly be able to thrive in your home when you have a reverse mortgage.

With that said, the vast majority of seniors can be helped by reverse mortgages…as long as they want to stay in their home for the rest of their lives AND as long as they can afford it.

I HOPE THIS ANSWERED YOUR QUESTION. IF YOU HAVE MORE QUESTIONS, OR IF YOU’D LIKE MORE INFORMATION, FEEL FREE TO CALL US AT (267) 289 1095 OR EMAIL jasone@reversemortgagereality.com. 

The post Reverse Mortgage FAQ Does My Credit Score Matter When I Get a Reverse Mortgage first appeared on Reverse Mortgage Reality.

As of May 3, 2019, Livewell Financial stopped funding all of their loans(reverse mortgages and regular mortgages too). This means that any loan in their pipeline will not be worked on at all.

Naturally, this is is extremely frustrating.

First of all don’t panic(yes, I know this is easier said that done). No matter where you are in the reverse mortgage process, you’ll be ok.

Just so you know, this has happened before in the reverse mortgage world, and it will probably happen again. In 2009, one of the largest reverse mortgage companies(at the time) Senior Lending Network shut its doors. I(Jason Eichmiller) spearheaded the team to save SLN’s seniors. We worked tirelessly to help every single senior who had a reverse with SLN.

It worked by the way. We helped 96% of Senior Lending Network’s seniors close their reverse mortgages within 3 weeks.

Fast forward to today. If your appraisal has already been completed and you’re in underwriting(or just waiting to close) here’s what will happen. Livewell WON’T close your loan. If you ask us, we’ll help you transfer your appraisal and underwrite your reverse mortgage yourself. This is a quick, easy solution that should take no more than 2-3 weeks from initiation to closing.

If you haven’t had your appraisal done yet, we’ll still be able to help. We will seemlessly order your appraisal, and your reverse mortgage will be closed within weeks.

I understand that this is scary, and I understand your frustration. With that said, we will do our very best to help you get your reverse mortgage closed quickly and painlessly.

For Instant Consideration Call Our Hotline At (267) 289 1095. 

You May Also Email Us At JasonE@ReverseMortgageReality.com

The post What If You Have a Reverse Mortgages With Livewell Financial(just shut their doors) first appeared on Reverse Mortgage Reality.

Some folks think it’s 60, others think its whenever you get social security, or medicare…but really, what’s the answer? In this episode of Reverse Mortgage FAQ, we tell you exactly how old you must be to get a reverse mortgage(and give you the different options if you or your spouse are underage).

Did you watch it? Great! Then you know that the minimum age for the primary homeowner in a reverse mortgage is 62. Now, if you’re 62 and have a 50 year old spouse…that will work. You can still get a reverse mortgage and your spouse will be protected when you pass away.

If you haven’t heard of this rule, its because its fairly new. AARP and the reverse mortgage industry came together in 2014 and made reverse mortgages safe for underage spouses.

If you’re thinking, well, this must mean that before 2014 reverses weren’t safe for underage spouses…well you are right. Here’s what would happen(remember this was back before 2014…its completely different now).

ROBERT AND HELEN’S REVERSE MORTGAGE OPTIONS BEFORE 2014 AND NOW

Let’s say Robert is 65 and his wife Helen is 59. Robert and Helen have a $450,000 home with a mortgage of $180,000. Robert and Helen also have credit cards, and a pretty expensive lifestyle.

Their lifestyle was so expensive, that they were draining $800 out of their retirement accounts every month just to stay afloat.

Robert’s wealth manager was concerned that Robert and Helen would run out of money in their late 70’s at this rate, and introduced them to the concept of a reverse mortgage. The reverse mortgage is designed to pay off the mortgage and credit cards, and in Robert and Helen’s case, they would no longer need to draw down their investment accounts(and they’d save the taxes that they were spending on their draw downs).

THE REVERSE MORTGAGE MADE ROBERT AND HELEN FINANCIALLY STABLE FOR THE REST OF THEIR LIVES

Although Helen was underage, back before 2014 Robert could still get a reverse mortgage without Helen on it. All is well and good, BUT IF ROBERT PASSES AWAY, the reverse would become “due” and Helen would need to pay it off. She could pay it back by selling the property,  refinancing(possibly into a new reverse mortgage) or paying with cash or life insurance.

Back before 2014, I only recommended reverse mortgages in that situation IF the “Roberts” of the world had enough life insurance to make sure that Helen could pay off the reverse and stay in her home.

By the way, if you’ve ever heard a reverse mortgage “horror story”, this is one of them. Thank God AARP and the reverse mortgage industry came together to change the program in 2014.

HOW REVERSE MORTGAGES ARE NOW SAFE FOR UNDERAGE SPOUSES

If Helen and Robert approach me today, the end of the story changes drastically. They’d still get the same benefit of paying off their mortgage and credit cards, but now Helen’s classification is an “eligible non-borrowing spouse”. As long as she keeps the home she shares with Robert as her PRIMARY RESIDENCE, Helen will be fine if Robert passes away early.

Here’s how this works. Let’s say Robert dies at age 70(and Helen is now 64). Because Helen is an eligible non-borrowing spouse, she’ll be able to live in the home for the rest of her life. She’ll just have to keep the house as her primary residence and pay all of her property charges.

Of course, if she decides that she doesn’t want to live there anymore she can sell the home and get the remaining equity once the reverse mortgage is paid off.

With that said, most surviving spouses just want to live comfortably in their own home because of all of the wonderful memories.

WHAT IF THE SPOUSES DON’T LIVE TOGETHER?

One question that possibly just came up in your mind is, “What if the underage spouse doesn’t live with the spouse who is over 62?” This comes up quite a bit when we have separated spouses. In this case, the underage spouse would be considered a “non-eligible non-borrowing spouse” and wouldn’t be eligible for protections once their “of age” spouse passes away.

If you’re in a non-eligbile nbs situation, make sure to speak with your family members and legal advisors so you have a succession plan in place. You don’t want to “wing it” in case of the God forbids.

A REVERSE MORTGAGE FOR 60 YEAR OLDS?

Finally, there is one reverse mortgage program one the market that will allow a primary homeowner as young as 60 get a reverse mortgage. However, this program isn’t offered in every state, and your home must be worth at least $300,000 to qualify. If you are just 60 and you think a reverse might be an option, feel free to reach out and we’ll let you know if this is an option.

Now you have an idea of exactly what age you need to be to get a reverse mortgage, whether you have a spouse or not. If you have any questions about this reverse mortgage faq, or anything else in regards to reverse mortgages feel free to reach out to me at (267) 289 1095 or jasone@reversemortgagereality.com.

The post Reverse Mortgage FAQ: How Old Do You Have To Be To Get A Reverse Mortgage? first appeared on Reverse Mortgage Reality.

If you’re considering a reverse mortgage and you have children, the question of “With a reverse mortgage, will my kids get my home or will the bank take it?” has got to have entered your mind. Easier than writing; I recorded a short video with the answer to that question. Please take a look at it below and of course let me know if you have any questions or need more information.

So, now that you’ve watched the video(or if you weren’t able to), you know that when you get a reverse mortgage, you still have full ownership of your home. When you do pass away your kids will get your home.

THIS SOUNDS TOO GOOD TO BE TRUE…HOW DOES IT WORK?

Did I just read your mind? So how does a reverse mortgage work where we give you money, you don’t make any mortgage payments AND you stay on the deed? And how do the kids get the home?

To answer these common questions let’s look at Nancy’s situation.

Nancy is a 73 year old widow. She has 3 kids who she paid through college, and her family is her life. But Nancy is also on fixed income and has a mortgage. She didn’t save much when she was younger, and besides about 3 years of savings and investments, Nancy really doesn’t have much besides her home.

NANCY ISN’T IN AWFUL FINANCIAL SHAPE RIGHT NOW, BUT IN THE BACK OF HER MIND SHE KNOWS SHE’S ONE EMERGENCY AWAY FROM DISASTER. 

Nancy has 8 grandchildren, and because of that she knows that her son and two daughters aren’t in a financial position to start paying for her mortgage. They’ve got their own families and expenses. Nancy just refuses to be a burden on her loved ones.

Nancy ended up getting a reverse mortgage, which completely eliminated her financial burden. First, it paid off her mortgage. Now, instead of paying the mortgage company on the 15th of each month, Nancy pays herself(by adding the mortgage payment to her savings account). Next, Nancy got $87,000 of tax free money to put into savings.

The combination of saving her mortgage payment and her “upgraded” savings account means that Nancy will be financially comfortable for the rest of her life.

Before we could close the reverse mortgage Nancy needed to be put at ease. And one of her biggest questions in the beginning was…

DOES THE BANK TAKE MY HOME OR CAN THE KIDS GET IT?

Here’s what I told Nancy(and then her FHA counselor reaffirmed it).

First, a reverse mortgage is just a loan like any other mortgage. It is NOT free money and must be paid back at some time in the future(and it will be paid back when you die or when you sell your home). The vocabulary term for this is it is a “secured loan”.

THE HOME STAYS IN YOUR NAME

When you look at your deed after you’ve got a reverse mortgage, you will see that it is still “vested” in your name. You will see a “lien”(ie mortgage) to the reverse mortgage company. Again, this just secures the debt, so the mortgage will automatically be paid back if you sell the home or transfer the deed(ie give it to the kids).

HOW DOES REVERSE MORTGAGE INTEREST WORK?

Because this is a mortgage after all(and therefore not free), there is interest that is charged on the money that you take. Interest rates differ based on financial markets(and what year it is), but in May of 2019 reverse mortgage rates sit at about 5%.

EVEN THOUGH THERE’S INTEREST YOU DON’T HAVE TO MAKE MONTHLY PAYMENTS

Here’s how this works. Let’s say you get $100,000, which pays off your mortgage a gives you a little bit of cash(by the way I’m using $100,000 because its a nice easy number to understand). You aren’t making monthly payments on the $100,000, so at the end of the first year you owe $105,000(because the 5% interest rate “accrues”). And at the end of the second year you owe about $110,000 for the exact same reason.

Of course you don’t have to worry about paying this back while you’re alive, EVEN IF 2008 happens and your house goes under water(which is pretty darn unlikely in my opinion).

BUT WHAT ABOUT MY HEIRS?

Nancy was worried about her kids. She was OK with them getting less out of her home, and her kids wanted her to use her home’s equity to make her life easier. MOST adult children feel the same way. Nancy’s childrens’ biggest concerns were to ensure that she can’t lose the home, and that the reverse mortgage was safe and secure for her. Once her kids fully understood how the program worked…they were all in.

But I still had to explain to Nancy how her kids would get the money. So we went over this example.

Let’s say that when someone passes away, their home is worth $400,000 and $250,000 is owed on the reverse mortgage. If this is you, your heirs would choose whether they want to keep the home or sell it.

YES THE HOME BELONGS TO THE HEIRS

Once they’ve made their decision, if the heirs want to keep the house, they just pay the reverse mortgage($250,000) off. They can pay it off however they want, but some common ways are through a refinance, inheritance cash or through their parents’ life insurance policy.

If the heirs DON’T want the home then they can just sell it. After all, they probably have their own home and family. Moving into YOUR home would be quite a disruption…right? Assuming they sell the home for $400,000 and $250,000 gets paid back to the reverse mortgage company, the heirs would pocket $150,000.

As far as timelines go, the heirs have 6 months to sell the home, and then they can petition HUD for up to two 3-month extensions.

My biggest goal for this article was to make clear not just the FACT that your heirs get your home, but I wanted to show exactly what your heirs’ options are. I hope I’ve made this clear.

If you have any other questions about how this works…feel free to reach out directly at (267) 289 1095 or  jasone@reversemortgagereality.com.

The post Reverse Mortgage FAQ: Will My Kids Get My Home When I Pass Away? first appeared on Reverse Mortgage Reality.

CLICK HERE TO SEE IF A REVERSE MORTGAGE CAN HELP

HOW TO GET OUT OF FORECLOSURE BY USING A REVERSE MORTGAGE

There’s a little known secret that debt relief attorneys are using to help senior citizens get out of foreclosure.. In this article we will dive deep into how reverse mortgages eliminate delinquent debt(and really all sorts of debt), who is eligible to pay off a foreclosure using a reverse mortgage, and the process we go through when we help folks. 

By the way, if you have a foreclosure sale date, or you have a time sensitive question(and need to bypass this article) you can reach us directly at (888) 309 9705 or (267) 289 1095. In addition, you can email jasone@reversemortgagereality.com. Just put “EMERGENCY FORECLOSURE HELP” in the headline and you’ll make it to the top of my personal list.

YOU CAN ALSO FILL OUT THE FORM HERE FOR INSTANT HELP

Now, here’s how a reverse mortgage pays off delinquent debts. When a senior is in foreclosure, they are behind on their mortgage or tax payments. Eventually, the bank(or tax bureau) will try to take your home in an effort to get repaid. That’s the whole reason why mortgages are “secured” to your deed…so the bank is guaranteed to be paid back. This makes sense, right?

Now, reverse mortgages will actually pay off the entire debt that’s secured to your home. This is true whether you’re in foreclosure, just late on your mortgage, or current. When you close the reverse mortgage WE actually write a check to the bank for the entire balance that YOU owe. Because the bank is now paid in full, they issue a “satisfaction”, and they can no longer come after your home. This is the 10,000 foot view of how to get out of foreclosure(well at least how seniors can get out of foreclosure).

SO WHAT’S NEXT?

Well, we’ve paid your foreclosure off, and now you owe the money to the reverse mortgage company(remember, a reverse mortgage isn’t free money). We don’t require you to make monthly mortgage payments(although you can if you want). In fact, instead of giving it to us, most seniors feel like their money works better when it’s in their piggy bank.

YOU’LL PROBABLY LIVE EASIER WHEN YOU SAVE YOUR MONEY AS OPPOSED TO PAYING A BANK EVERY MONTH

On top of paying off your mortgage, we’ll go another step further. We’ll actually set up a separate account(called a Reverse Mortgage LESA) to pay your property taxes and homeowners insurance for the remainder of your lifespan. Don’t worry though, that account will be funded by the reverse mortgage, NOT by your own piggy bank.

Here’s how that works. Let’s say you’re 76 and have property charges(property taxes and homeowners insurance) of $7,000 a year. Your average calculated life expectancy is 87(based on HUD’s projections). We’ll hold 11 years of property taxes and homeowners insurance in a side escrow account called a LESA. Every time you have a property charge due, the reverse mortgage lender will make a payment out of that fund. It’s important to note that you aren’t charged any interest in the LESA until the funds are actually provided for your property charges.  

Imagine never having to pay your property taxes or homeowners insurance. How much further would your money go?

YOU WON’T HAVE TO PAY YOUR MORTGAGE, TAXES OR HOMEOWNERS INSURANCE FOR THE REST OF YOUR LIFE

 Now that you know that it’s possible, please read on and I’ll do my best to give you the reverse mortgage foreclosure “guidelines”. My goal isn’t to make you a reverse mortgage “expert”, its really to help you understand whether you can use a reverse as a tool to save your home, or if you need to look into another resource.

FIRST SOME HISTORY…

Back before May of 2015, anybody in any situation could get a reverse mortgage. They’d just need to be 62 or older and have some equity. Income, credit and mortgage lates didn’t matter. I personally helped a little over 100 seniors use a Reverse Mortgage to get out from under foreclosure.

But then the good ol’ government did what they do “best” and stepped in. The crew down at the HUD and the FHA took a look at statistics, which showed that folks who had been late on their mortgage(or taxes) more than once were pretty likely to default on their property taxes in the future.

Knowing that tax defaults eventually lead to a foreclosure, we(the reverse mortgage industry) wanted to make sure that the folks who got reverse mortgages were protected from that sort of mess. In other words, we only want seniors to get reverse mortgages if they can afford to stay in their homes(with the reverse mortgage’s help of course).

HERE’S WHAT WE DID(AND WHY IT ANSWERS YOUR QUESTION)

Now, any senior who has a history of mortgage lates, tax lates or is currently in foreclosure will have a couple of extra steps to their reverse mortgage.

First, as always we will require the reverse mortgage loan to pay off their mortgage(and anything else secured) on title. That will take care of the foreclosure.

Next, we will set up a “Reverse Mortgage LESA”, which will escrow your property taxes and homeowners insurance for your entire lifetime expectancy.

THIS WILL ENSURE THAT THE SENIOR WILL BE ABLE TO SUSTAIN THEMSELVES IN THEIR HOME FOREVER, AND WON’T EVER BE ABLE TO LOSE HIS OR HER HOME

Now, what’s the downside of this change?

Quite honestly, fewer seniors in this situation will qualify. This is because the loan size will need to be big enough to both pay off the mortgage and fund the lifetime expectancy set aside.

HOW DO I FIGURE OUT IF I QUALIFY EVEN IF I’M IN FORECLOSURE?

Here are some guidelines. If you’re in your 60’s, you need to have at least 70% equity. For example, if your home is worth $300,000, you’ll need to owe less than $90,000 for this to work. By the way, this is more equity needed than a traditional reverse mortgage. Remember, we need enough room in the loan to both pay off the mortgage AND set up the reverse mortgage LESA for your property taxes and homeowners insurance.

If you’re in your 70’s, you’ll need to have 60% equity. And when you get to your 80’s and beyond, you’ll need right around 40-50% equity to get a reverse mortgage that pays off your foreclosure.

These are just guidelines though. Your approval will depend on your age, how much you currently owe, and how much your annual taxes and other homeowners charges are.

***Just a note; if you live in California, or another state with low annual property taxes you’ll be able to get this done easier. 

The only way to truly know if you qualify is reach out(unfortunately, there are no lifetime expectancy set-aside calculators available to the public).

On our call, we’ll need to know the following…

✔ YOUR AGE

✔HOW MUCH IS OWED ON YOUR HOME(THE ENTIRE AMOUNT INCLUDING ATTORNEYS FEES ETC)

✔YOUR APPROXIMATE HOME VALUE

✔YOUR INCOME

✔YOUR ANNUAL TAX AND HOMEOWNERS INSURANCE BILL

Then, we’ll calculate if you can qualify. If you can get a reverse mortgage, you will no longer need to pay your mortgage, property taxes or homeowners insurance. Your home will be saved, and you won’t have to worry about the bank(or the tax bureau) taking your home. The weight that you will feel lifted off your shoulders will be immeasurable.

On the other hand, if you CAN’T qualify(like I said, not everybody will qualify for this) we’ll let you know immediately. Then, we’ll go over other options that you might have besides the reverse mortgage. For example, we work hand in hand with debt relief attorneys who can often assist.

For every single person we help, our goal for you is to save enough money so you can live financially comfortable in your home for the rest of your life.

Feel free to reach out to us toll free at (888) 309 9705, (267) 289 1095 or email jasone@reversemortgagereality.com if you’d like to see if a reverse mortgage can pay off your foreclosure and save your home. Again, if emailing, please write “EMERGENCY FORECLOSURE HELP” in the headline and you’ll immediately go to the very top of my list

WHAT SHOULD I DO NEXT TO GET MORE INFORMATION?

In this article, I attempted to be as thorough as possible, while at the same time I don’t know your exact situation(wouldn’t it be strange if I did). If you’d like to get more information about how a Reverse Mortgage can help you, a loved one or a client get out from under foreclosure, or you have any questions you can reach us at (888) 309 9705 or jasone@reversemortgagereality.com.

I’ll personally do my best to answer your questions and help you understand how to get out of foreclosure by using a reverse mortgage. Thanks for reading…

Jason Eichmiller

CALL US AT (888) 309 9705 OR

CLICK HERE FOR A FREE REVERSE MORTGAGE QUOTE

The post How to Get Out of Foreclosure by Using a Reverse Mortgage first appeared on Reverse Mortgage Reality.

The post How to Apply For A Reverse Mortgage first appeared on Reverse Mortgage Reality.