TO THE FHA REVERSE MORTGAGE
Today I will give you a broad overview of the FHA reverse mortgage. I will go into more detail under each subject on our website. Read more about my background as a real estate lawyer, and real estate broker, and reverse mortgage attorney at this link.
Call me at 425-774-6611, and I will answer your questions about the FHA reverse mortgage. I do not charge for telephone calls.
The FHA reverse mortgage is more than a mortgage. It is a multi-factored retirement tool. When you consider the many benefits of the reverse mortgage you will conclude that it is not expensive.
There are some advisors who bad mouth the FHA reverse mortgage. They do this because they have not kept up with recent changes.
If you are 62 years or older, and if you have 50% equity in your home, you can take out an FHA mortgage that has no mandatory payments. That means you can have more spending power in your retirement. Or you can retire sooner.
There are no mandatory payments because there is so much equity in the home. You can allow the interest to accrue while the value of the home will increase faster than the interest accrues.
The property must be a personal residence. Any mortgage you owe should be around half of the property value or less, meaning that you should have around 50% equity in the home.
What if your spouse is younger than 62? Under the new rules, if the older partner dies, the under-62 partner can enjoy most of the benefits of the reverse mortgage.
If your spouse is younger than 62, the amount that the primary bomber can borrow will be less than 50%. For example, if the current interest rate is 3.5% and if the under-age spouse is only 47, the primary borrower can only borrow 41% of the appraised value. There is a detailed spreadsheet that details the Principal Limit Factor.
If you have a $100,000 HELOC home equity line of credit, and if you owe $50,000 on your HELOC, the lender can, for any reason, limit your line of credit to $50,000. On the other hand, the FHA reverse mortgage It is a line of credit that cannot be cancelled or reduced in size.
The FHA maximum loan value that can be used is $970,800. On a home worth $970,800, the borrower could access around $485,000. Or the borrower can buy a home worth $970,800 by paying around $485,000 down.
In most areas property values go up faster than interest will accumulate, so when both partners have died, there will usually be more equity in the property than at the beginning.
If you take out an FHA reverse mortgage on your current residence and then buy a new residence, you can move the FHA reverse mortgage to the new home with most fees waived.
What if the value of the property goes down. In a few places property values will remain static or decline. If values decline the heirs are protected because the payoff can never exceed 95% of appraised value.
If the family wants to retain the property after the borrowers have died, they should have an exit strategy. The wills should leave the property to enough heirs so that there will be sufficient income to qualify for a refinance. Read more at
I answer questions about reverse mortgages for no charge while I determine if I can help you. There is no charge unless and until we determine what estate planning you need and we agree on a price.
You can obtain your reverse mortgage through any of several companies. I recommend my wife as an excellent reverse mortgage specialist. She is a loan officer with Magnolia Mortgage.
Call me at 425-774-6611 or email me at JamesDeal@JamesDeal.com, and I will answer your questions about the FHA reverse mortgage.