Reverse Mortgage Information from Alabama’s only direct Reverse Mortgage lender.
Located in Birmingham and Huntsville, Alabama, Scott Underwood, is “Alabama’s Reverse Mortgage Guy” with 12 years Reverse Mortgage experience. Scott is the Vice President of Alabama’s New South Mortgage.
What is a reverse mortgage or (HECM) Home Equity Conversion Mortgage and how can it help me? Scott Underwood will be happy to assist with the pros, cons, questions, illustrations and information all in person. I still believe in handling everything face to face!
Covering all areas from my Birmingham and Huntsville office and I still make house calls in central Alabama!
Ways to utilize a Reverse Mortgage. Some of the main ways people utilize the Reverse Mortgage: 1) Immediate Cash Needs – The most commonly used approach is when the senior homeowner is paying off an existing mortgage. Then they can free up the money that was going to the mortgage company each month for living expenses. 2) Other immediate needs are heath care, medical expenses, home remodeling, paying off debts, or a need for immediate cash!
Reverse mortgage loans are a way for older homeowners to convert their home’s value into tax-free cash, without having to sell or move. Insured by the U.S. government, the Department of Housing and Urban Development (HUD) allows Homeowners who are 62 or older to borrow against the equity of their homes.
Qualifying homeowners can choose to receive tax-free payments from reverse mortgage lenders either on a monthly basis, in a lump sum, or as a line of credit.
No repayments are required while a borrower lives in the home. Social Security and Medicare benefits are not affected.
The lender recover the loan amount, plus interest when the home is sold (because owners choose to move, or pass away)
When the loan is paid in full, all equity associated with the property will be distributed to your heirs.
Reverse Mortgage borrowers continue to own their homes. Because there are no monthly loan payments due, the amount owed grows over time. That means that the amount and the remaining equity in the home decreases.
Borrowers must continue to pay homeowner’s insurance and property taxes during the loan period. It is also the borrower’s responsibility to keep up with repairs. In fact, if a borrower fails to adhere to any of these obligations, it may become immediate cause for the loan to become due. In which case, it would become payable in full.
Do I qualify for a reverse mortgage? You must be age 62 or older. And you must occupy the home as your primary residence – for the majority of the year. Borrowers must own the home outright or have a low enough balance on the existing mortgage that it can be paid off from the proceeds of the reverse mortgage. You must also pass a financial assessment test. Ask me for information on this. The Reverse Mortgage now has a credit check, where a few years back the was not one.
Each borrower listed on the title must apply for the reverse mortgage loan, must attend a mandatory counseling session.
Does my home qualify for a reverse mortgage? First of all, your residence must meet HUD standards. The reverse mortgage must also be the only mortgage held against the residence. That means that if there is a current mortgage on the property, it may be able to be paid off with the proceeds of the reverse mortgage.
Other information needed to make a decision.
How is the loan amount determined? The amount of the loan is based on: The age of the youngest borrower The appraised amount of the property, Must have substantial funds left over to pay homeowners insurance, property charges, and property taxes.
What are my reverse mortgage options? The Home Equity Conversion Mortgage (HECM) is the only reverse mortgage that is insured by the Federal Housing Administration (FHA). The FHA guarantees that HECM lenders meet their obligations, governs how much HECM lenders may loan to qualified borrowers, and limiting loan costs. Because this is a government insured program, loan counseling is required, by an approved HUD counselor.
Reverse Mortgages offer 4 draw options:
Combine all three, 60% lump sum, monthly income for a fixed term, or a line of credit.
Please Call or Email Scott Underwood for or a no obligation illustration and information packet.
We always welcome “adult children” or as were called the “sandwich generation” in the process, so don’t hesitate to call and get the information without worrying that someone will call daily and bother you!