Reverse Mortgages:the Facts
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Call us and find out if a reverse mortgage is right for you. Reverse mortgages are not the right option for everyone. The goal of a reverse mortgage is to allow a retired person to live more comfortably in their home for the rest of their life. This can be done by allowing a monthly income, paying off bills building savings for emergencies and paying off any existing mortgages. Reverse mortgage s are FHA loans(Government insured) and have been around since 1989. Call Derek at Abbey Mortgage and he will tell you the pros and cons of a reverse mortgage. Reverse mortgages are becoming more and more common and popular.
Some Reverse mortgage facts.
With Abbey Mortgage there are no upfront or out of pocket fees.
You retain ownership of your home. Government backed and insured thru the FHA.
We are a local company and only do loans in Florida.
You can use the money for any purpose, Pay off bills, home repairs, travel, replenish savings.
Never make a payment as long as you live in the home.
All money is tax free and does not affect social security or Medicare
Fast and easy closings in less than 30 days.
Sell , payoff, or refinance the home at any time with no penalty.
If you pass on the home passes on to your benefactors.
You are in full control of the money available to you from the reverse mortgage. You can take it in a lump sum, monthly or you can leave it in an equity line and take it as you need it. If you leave it in the equity line you have instant access to the money and any money left in there grows at 5.9%.
Some of the misconceptions of a reverse mortgage.
1.The bank owns the home, when you do a reverse mortgage. This is incorrect, the ownership is not changed when we do a reverse mortgage. The borrower owns the home and just like with a regular mortgage, the lender just records a mortgage against the property. The borrower can sell or refinance or payoff the home at any time with no penalty.
2. The heirs/ kids will not get the home when we pass away. That is not correct. If one borrower passes away there is no change as long as the other borrower lives in the home. At the time the 2nd borrower passes away then the home will go to who the borrower leaves the home to. Just like a normal mortgage, when the heirs sell the home the must first pay off the mortgage balance and then they keep the rest of the proceeds.
3. Only poor people do reverse mortgages. This is not correct. Most of the people doing a reverse mortgage have good credit pays their bills on time. The average borrower that we do a reverse mortgage for has enough to get by, but there is not much money left over each month. We are also doing reverse mortgages for borrowers that do not need money now but are concerned for the future. For example , what if the roof needs replacing or the AC goes out or if the car breaks down. A reverse mortgage is a good safe way to have access to money in case of an emergency.
4. You can only do a reverse mortgage if the home is debt free. This is incorrect. You can do a mortgage if you have a mortgage we will just pay the existing mortgage off first they you keep the additional money left over.
Lots of borrowers ask me why borrowers do Reverse Mortgages. Here are a few examples.
I have a borrower that we just did a reverse mortgage for and he and his wife get by every month on their social security and a small pension, but at the end of the months they are out of money. They had mortgage payment of $650 a month. We did the reverse mortgage, paid off their old mortgage and that left them with $29,000 available in an equity line. They are going to leave the money in the equity line and only take it as they need it, for emergencies or for home repairs. By eliminating the mortgage payment they now have an extra $650 a month and they have the equity line to fall back on.
I recently had a Borrower who lost her husband of 32 years, when he passed so did his pension and she lost some of the SSI income as well. We did the reverse mortgage and instead of giving her a lump sum or cash out at close, she decided to take the monthly payments. She will receive $895 a month for the rest of her life from the reverse mortgage. This will replace the income she lost when her husband passed away.
We just closed a reverse mortgage for a couple in the Villages. They took the money from the reverse mortgage and are going to purchase a rental property. They will use the rental income from the new rental to boost their month income.
I just had a family friend who we did a reverse mortgage for. She just gets by on her SSI income. She told me that she is not able to sleep at night because she is so worried that with the age of her home that something may break and she does not have the money to fix it. We were able to give her a $60,000 line of credit. She now has access to the money anytime she needs it. She told me the day we closed that she slept the best she has in years. She said that she now has peace of mind and does not worry.
We did a reverse mortgage last year for a borrower that had no family or close friends to leave her home to when she passes away . She is very passionate about animals and volunteers in a no kill animal shelter. She took the money from the reverse mortgage and donated it to the animal shelter and her church. She said that she wanted to see the money do good while she was alive.