Reverse mortgages are unique loans requiring an experienced MLO to navigate the process.
I refer all my reverse mortgage clients to Paul Scheper, owner-broker of Longevity Mortgage.
Paul is a trusted friend and colleague of many years. Please reach out to Paul with any questions at paulscheper@live.com or (949) 636-7242
With many on fixed incomes, there is scant “extra” money to pay off credit cards and other deb, home repairs, or perhaps pay out a divorce.
Because few want to touch their 3% first TD to pull cash out, home equity lines of credit or fixed-rate second mortgages are options. However, loans come with rigorous income standards, preventing some seniors from qualifying. However, there may be an easier way—a no-payment-required reverse second mortgage.
Here are some of the basics:
—Qualifying is based on a “residual monthly” income (what’s left over) formula, family size, and region of the country. Regardless, it is certainly a lower threshold than a home equity line of credit or fixed second because there is no monthly payment to factor.
—Unlike the FHA reverse mortgage, the home equity conversion loan requires all borrowers (husband and wife, for example) to be at least 55.
Like the standard reverse, the max. loan amount is calculated, in part, based on the date of birth of the youngest borrower.
Borrowers never make a payment on the reverse second. But, of course, nothing is free. The loan balance negatively amortizes, meaning it grows monthly based on a fixed 9.99% fixed interest rate. The minimum loan is $50K.
