Top 5 Things to Know about Reverse Mortgages

Here are the top five things you need to know about Reverse Mortgages.  

1. A Reverse Mortgage is simply a mortgage. Neither the lender nor the government assumes or receives any ownership swap for the benefits you receive from the reverse mortgage.  The homeowner retains their same home ownership as before the reverse mortgage and has full rights to any and all future home appreciation of the home as well.

2. If you currently have a forward mortgage or traditional home equity line, they represent individual deeds of trusts that are paid off when you refinance with a Reverse Mortgage. Your debt is not eliminated, rather it is replaced with a new deed of trust in the form of a government insured HECM Reverse Mortgage.

3. When a Reverse is utilized to pay off an existing forward mortgage this removes the risk of loss of home by default with your lender(s) for non-payment. By eliminating the requirement of a monthly payment, the homeowner strategically has created a more secure environment to manage the mortgage debt and live within their lifestyle.

4. A reverse provides a special type of protection for the surviving spouse that is not available from any insurance company in today’s market. The surviving spouse can continue to live in the property as their primary residence for the remainder of their natural life regardless of home equity level and how long they live. They will also continue to receive all of the available benefits of the reverse mortgage to help them in retirement.

5. This means that the property is ultimately responsible for repayment of the loan and not the individual homeowner.  At the end of the surviving spouse’s life, the property may be significantly underwater after general selling expenses. Because the MIP provides insurance for these types of losses, the homeowner’s heirs and the estate are not affected by any losses on the property.

As Reverse Mortgage Specialists, whether you have an immediate need or are working to better your retirement plan, it is our job to help you understand the program and comfortably determine the options best suited for you. Options may include paying off existing mortgages or home equity lines to free up monthly funds for living expenses or care.  Other options may include tailoring the loan to supplement your fixed retirement income or creating an emergency home equity line that will grow annually for the future.  Regardless of the direction, the role of a Reverse Mortgage Specialist is to help you outline a plan that will work for you.  To view the many practical applications of a Reverse Mortgage click here.  

George H. Omilan
President-CEO - NMLS# 873983
Jefferson Mortgage Group LLC - Mortgage Specialists

Programs:  Traditional QM (Fannie Mae, Freddie Mac), government insured HECM Reverse Mortgages, and Non Traditional Non-QM Mortgages commonly referred to as Specialized Forward Mortgages including “Alt-A Investor loans” and DSCR (Debt Service Coverage Ratio) loans up to 85% LTV, both Full doc and No Income-No Employment (No Doc) for the investor community. Our expanded niche products also focus on the more traditional FHA & VA with Lower Score and higher Debt-to-Income Options, Fixed & Variable Jumbo loans, and Private Label Reverse mortgages for higher priced homes. We are also highly focused on specialized loans for the Self-Employed borrowers with our Bank Statement & Asset Dissipation Programs. We are committed to offering a full range of “Non-QM Loans” for expanded qualification, where the banks and large-scale lenders dare to go.