1. Introduction
2. The Basics
   1. 1 Minute Recap
   2. Misconceptions
   3. Reasons to Do
   4. Qualifying
   5. Payoffs
   6. Using the Money
   7. Interest Rates
   8. How Much
   9. Safeguards
   10. Pros and Cons
   11. Items Needed
   12. After Applying
   13. After Final Docs
   14. Purchase Home
   15. Testimonials
   16. Financial Qualify
3. The Detail
   1. Properties
   2. Spouse Off Title?
   3. Holding Title
   4. Insurance
   5. Property Taxes
   6. Medicaid
   7. Subordination
   8. POA
   9. Foreclosure
   10. Foreclosure2
   11. RM Comes Due
4. Considerations
   1. Did you Know
   2. Don't need a RM
   3. Jumbo
   4. Longevity
   5. Fear of a RM
   6. Originator duties
   7. New Reverses
   8. Make Payments
   9. Alternatives
   10. Use Savings?
   11. Now or Later?
   12. 2018 Update
   13. 2017 Update
   14. 2016 Update
   15. 2015 Update
   16. 2014 Update
   17. 2013 Update
   18. 2010 Update
   19. 2009 Update
   20. Social Security?
5. Examples
   1. Interest Only
   2. Purchase Home
   3. Minimize IRA Draw
   4. LOC Advantage
6. Jest for Fun
   1. Old 45's
   2. Why You Need RM
   3. Do For Fun
   4. Letter to Bank
   5. Perks Over 50
   6. Trip to Costco
   7. Your House
   8. 1950s Nostalgia
7. Product/Services
   1. Origination
   2. Servicing
8. Contact
   1. Contact
   2. About Us
   3. Contact Form
   4. Privacy Policy

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   NMLS ID 210661

   Kelly Mortgage   

   ID 1594896

   CalBRE 903226

    

    

   

    

This site

1 Minute Recap of a Reverse Mortgage

I've taken an excerpt from The Lee and Desi Real Estate radio show I appeared on and have added some visuals to make it a little more interesting.

So often, people ask me, "What is a Reverse Mortgage."  My brief answer about how a reverse mortgage works is this:

Someone qualifies for a Reverse Mortgage

• When they are age 62 or more
• Own their own home or buying a home
• It’s their primary residence
• As of April 27, 2015, HUD has established financial and credit qualifying guidelines.

This is it for the Reverse Mortgage requirements.  They can then take tax-free money out of the home without making monthly mortgage payments.

That is sort of the reverse of it; we are paying them rather than them paying us. 

 

They do pay us back when they

• Sell
• Move
• Or pass away

 Most people choose that last choice; they plan on staying in their home as long as they can. 

They can then take money out of a Reverse Mortgage in three ways.

• They can take a lump sum; meaning all the money up front.  We use this choice when the borrower has an existing mortgage or equityline.  That has to go away as part of the process. 
• They can choose a line of credit; sort of like a jumbo credit card that they can draw from as needed but only are charged interest on the part they actually use.
• Or they can take monthly payments.
• Or they can take a combination of all three.
• The exception is to the fixed rate choice (which has only appeared in the last couple years) which requires them to take the maximum allowable (60% of the principle limit or required payments, such as a mortgage, plus 10%) up front and begin interest rate accumulation on the full amount immediately.

To Misconceptions                   To The Basics Index