For homeowners who are lucky enough to have equity, and no longer wish to make mortgage payments, a Reverse Mortgage may be the answer. A reverse mortgage is a special type of home loan that allows homeowners to convert the equity that they have acquired in their home over the years and turn it into cash. The great thing about reverse mortgages is that you receive money AND are no longer required to make any mortgage payments. You do not ever have to repay the loan unless the borrower no longer uses the home as their principal residence or they fail to meet the obligations of the mortgage.
Reverse mortgages were started to help people in or near retirement with limited income, so they could use the income they had to pay off debts and for living expenses, never having to worry about another mortgage payment. The loan is called a reverse mortgage because instead of having the balance reduced, as in conventional mortgages, in a reverse mortgage, the monthly payments to the lender are added to the balance, thus increasing the principal instead of reducing it.
The borrower is not ever required to pay back the loan unless the home is sold or as stated above, the property stops being used as a primary residence. The borrower must however make the required tax and insurance payments.
QUALIFICATIONS.
In order to qualify, the borrower must be at least 62 years old. A husband and wife or wife with spouse younger than 62 may obtain one, but the name of the younger spouse must come off title.
OTHER REQUIREMENTS
The loan must act as the primary loan on the property. It can not be secondary to any other loan.
The borrower must remain current on all tax and insurance payments.
The borrower must maintain the property in good condition.
FEES AND COSTS
Reverse mortgages are relatively inexpensive. The regular Origination fee, mortgage insurance premium, appraisal fee and closing fees apply, as with a regular closing. And if there is enough equity, the closing costs can be added to the loan so you do not have to pay anything at closing.
PRUDENT TO USE AN ATTORNEY
A reverse mortgage is a Closing. That is, you will be required to have title examined for the lender, a policy written and a mortgage, note and other lender documents signed, as with a regular closing. Therefore, it is prudent to hire the services of a real estate attorney that is a title agent such as Jacqueline A. Salcines, PA, in order to examine title, issue the title policy, review the Good Faith Estimate with charges from the lender, and most important, explain each and every document that you will be required to sign at closing.
Call us today for a no-fee consultation. We can explore whether a Reverse Mortgage is right for you and put you in contact with lenders that will find the best possible solution for you, while we represent you every step of the way. It is a small price to pay for peace of mind.
Law Offices of Jacqueline A. Salcines, PA
305 | 669 | 5280
706 S. Dixie Highway
Second Floor
Coral Gables, FL 33146
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