Reverse Mortgage Frequently Asked Questions
FAQs (frequently asked questions) on what to expect with your Reverse Mortgage, you work personally with one loan officer during the entire process- we handle everything we can for you.
A Reverse Mortgage is a federally insured program designed to help seniors utilize the equity in their homes in exchange for a loan. When considering a reverse mortgage, also known as a home equity conversion mortgage (HECM), it is important to understand the payout options available to you. Depending on your financial goals, you may choose a one-time payout, a monthly stipend for a set period or for life, a line of credit or a combination of one or more options. At Reverse Mortgage Alabama, our team works with residents in Birmingham understand everything about Reverse Mortgages, from application to payout options. We believe that when our clients are well educated, they can make the best financial decisions for their future. Contact us today with any questions about reverse mortgages and your payout options.
What to expect in the Reverse Mortgage process? I make this as quick and easy as allowable. I personally guide you with the steps. These are Counseling, Application, Appraisal (Why would I need a second appraisal), Underwriting, and Closing. Most people’s common Reverse Mortgage Myths are debunked during Reverse Mortgage (HECM) Counseling!
Who owns the house in a reverse mortgage? A reverse mortgage is a rising debt, falling equity loan since you are taking money out of your home and since you make no payments, the balance goes up and your equity goes down. But as with either loan, you always own the home and any equity in the property belongs to you or your heirs. Unlike you may have heard, a Reverse Mortgage is done through a lender, just like if you have a mortgage now, you and your lender own your home.
From an educational standpoint, Reverse Mortgage (HECM) counselors are the first line of defense in the ongoing struggle to dispel the most common reverse mortgage myths and misconceptions. The counselor would also give you an idea what to expect, because what I tell you and they tell you should match!
We represent most of the largest lenders in the Reverse Mortgage business, but can find you the best fit for less, because we spend so little on advertising. Reverse Mortgage Alabama covers all of Alabama- this means we can offer lower closing costs using in state providers, and close in 30 days!
You do have to set up your counseling, but I will supply you with between 10-20 phone numbers.
After that we get together and go over the initial application and sign it. What to expect after that?
Those two steps allow us to order an FHA case number and order your appraisal.
Once the appraisal is in, you will call and to discuss the value and how it effects our illustration, and mail or email all of this to you.
A few weeks of behind the scenes underwriting, and we are ready to set a closing date. This can be done at your convenience- your house or my office. Three days later you are wired the funds requested.
A Lump-Sum Payout. A lump-sum reverse mortgage payout must be divided into 2 years; 60% year one and the remaining 40% year two. Many of our clients consider this option if they have immediate expenses that need to be paid. Others choose a lump-sum payout because they are not in need of a monthly financial supplement and would simply rather receive all their cash at once. Still others choose to use their funds toward various investment opportunities. A lump sum payout may be the right choice for you. However, it is important to note that instant cash loan payouts usually will only pay a percentage of the home equity value.
Regular Payments. Many clients choose a reverse mortgage payout in the form of regular – usually monthly – payments. These sorts of payments can help supplement a client’s income over time for everyday expenses. They can also help gradually pay off expenses like credit card bills or car payments. A regular payment might also be used for home repairs or to pay for other homeowner’s expenses. Without the monthly expense of a mortgage and the supplemented income from a regular payout, many clients feel more financially secure.
Regular payments can be set for a predetermined number of years, after which the payout will cease but you are still free to remain in their home. Or you may choose a lifetime regular payment plan, in which your loan stipulates that you will receive payments at a set amount until your passing. The Reverse Mortgage Alabama team can help you evaluate your goals to determine if this is right for you.
A Line of Credit. A third option for a reverse mortgage payout is a line of credit. A line of credit is available for rainy day expenses, unexpected expenses such as medical bills, or for other reasons. This line of credit is a great option for clients who are not certain they will need to use all the income for their home equity. It may also be combined with a monthly payout option in many cases. After taking a detailed look at your expenses and future expenses, you can choose the best combination of reverse mortgage payout options for you.
We can help you explore reverse mortgage payout options to help you achieve your financial goals. Whether you have immediate expenses or want to feel more security in your daily finances, reverse mortgage offers solutions for you. If you are 62 years or older (one of the borrowers need, be sixty-two, but the other can be under age 62- this is a fairly new rule- called a “non-borrowing spouse”, and you own a home, contact Reverse Mortgage Alabama about your reverse mortgage payout options. We offer honest advice and are here to answer your questions.
Reverse Mortgage Alabama has offices in Birmingham and Huntville, Alabama. Call Scott at (205) 908-2993.
