Reverse Mortgage Requirements | Sarasota Reverse Mortgage

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Sarasota Reverse Mortgages

Reverse Mortgage Requirements

Hello Sarasota residents! This is another article in a series of articles that I have written and that I hope you find informative about Sarasota reverse mortgages. I have decided to write on this topic due to the substantial increase in home values in the Sarasota area. Rising home values in the Sarasota area is great news in general for homeowners in the Sarasota area. In particular, rising home values make a reverse mortgage in Sarasota more attractive!  I think rising home values is particularly worth noting for Sarasota homeowners who have been thinking about getting a reverse mortgage.  Recent surges in home values is important because a reverse mortgage loan amount is based upon a percentage of the value of your home. In other words, if your home is worth more, you can get a higher loan amount under a reverse mortgage.

Many of you my not be certain what the requirements are to obtain a reverse mortgage. Sarasota reverse mortgage requirements are quite simple. So simple, in fact, that many people can’t believe that there aren’t more reverse mortgage requirements.  I will list the requirements of a FHA HECM (Home Equity Conversion Mortgage) because this is the most widely used Sarasota reverse mortgage program The requirements to qualify for a reverse mortgage (FHA HECM) are as follows:

1.  You must be a homeowner 62 years of age or older.
2.  You must own the home outright (no mortgages) or have an outstanding mortgage loan balance low enough that it can be paid off with the proceeds of a reverse mortgage loan.
3.  You must have the financial resources/ability to pay ongoing property expenses such as annual real estate taxes and homeowners insurance.
4.  You must live in the home.
5.  You must receive consumer information about reverse mortgages from a HECM counselor prior to obtaining the loan.

That is it!

So, if you have been considering getting a reverse mortgage loan, now may be the time to do it. I am happy to answer any questions you may have about getting a reverse mortgage.  l am happy to use my experience to help guide you through the reverse mortgage process. All you have to do is pick up the phone and give me call – (941) 795-7525. If I am unable to answer, please leave a message and I will call you back as soon as I am able.

I look forward to helping you with this exciting opportunity. Thank you for reading this article and enjoy the rest of your day in lovely Sarasota!

Michael Wyckoff
Operations Director – Sarasota & Manatee
(941) 795-7525

Reverse Mortgage Sarasota | Bradenton | Reverse Mortgage Pros and Cons

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Reverse Mortgage Pros and Cons

Hello again knowledge seekers. To try to help my readers in the Sarasota and Bradenton areas better understand the ins and outs of reverse mortgages, I will describe in this article some of the benefits of availing yourself of a reverse mortgage and some of the things to consider in determining whether a reverse mortgage is right for you. I think a good way to do this is to list and explain some of the pros and some of the cons of a reverse mortgage.

Reverse Mortgage Pros:

1.  The lender pays you for the equity in your home. Rather than make a monthly payment to the lender as is the case with a typical traditional mortgage, with a reverse mortgage the lender pays you. In general, you have the option of being paid out of the equity (value) in your home taking of taking a lump sum (usually in 2 phases) or getting a line of credit or a combination of the two.

2.  You stay in the home without making any payments.

3.  It can be used to pay of an existing mortgage. You can pay off an existing mortgage that does require you to make monthly payments.

4.  You are not personally liable to repay the loan. This is a great benefit. The lender only has right against the home, not you personally. As a result, they are only permitted to recover repayment under the reverse mortgage up to/limited to the value of the home. This is true even if the balance due under the mortgage loan greatly exceeds the value of the home at the time the loan must be paid off.

5.  Your heirs may inherit the home after they pay off the balance owed under the reverse mortgage loan.

6.  You do not need to have a good credit score. This is another great benefit. You may qualify for a reverse mortgage regardless of your credit score.

 

Reverse Mortgage Cons:

1.  The amount due under your reverse mortgage increases over time. Unlike a traditional mortgage under which your monthly payments go toward reducing the amount you owe, under a reverse mortgage, the balance due under your loan goes up over time as interest accrues.

2.  The fees associated with a reverse mortgage are typically higher than those of a traditional mortgage loan. The good news is that the fees can be deducted from amount of the loan. They do not have to be paid by you out-of-pocket.

3.  Many people simply do not understand reverse mortgages. I hope this article and other articles I have written on my website will help you understand reverse mortgages. They are unique “animals” so please do not feel embarrassed if you are confused and don’t completely understand them. I invite you to give me a call anytime so that I can do my best to help you understand them more fully.

Michael Wyckoff
(941) 795-7525

What Is A Reverse Mortgage | Reverse Mortgage Sarasota | Bradenton

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What Is A Reverse Mortgage?

If you are like most people, you have probably heard of a reverse mortgage but you are not quite sure what it is or how it works. In this article, I will describe what a reverse mortgage is and try to help you understand how it works.

Simply said, a reverse mortgage is a mortgage loan product available to homeowners who are 62 or older and have equity in their home. The homeowner/borrower gives the lender a lien against their property and the lender pays the homeowner/borrower money to do so. In its most common form, the borrower can take out a lump sum, receive monthly payments or get a line of credit or a combination of monthly payments and a line of credit.

How Does a Reverse Mortgage Work?

The way a reverse mortgage works may be best described by comparing it to how a regular mortgage works. In a regular mortgage, the homeowner/borrower makes payments to the lender over time to pay down the amount borrowed. Each month, a portion of the mortgage payments goes toward paying interest on the loan and part of the payment goes to pay down the principal amount owed on the loan.

In a reverse mortgage, the lender pays the homeowner/borrower. As a general rule, the borrower does not have to pay back the monies he or she has received so long as he or she lives in the home. At the time the borrower dies, moves out or sells the home, the monies advanced by the lender must be repaid. This can generally be done by selling the home. Most reverse mortgages, however, are non-recourse – this means that the homeowner is not personally liable to repay the loan. This also means that the borrower cannot owe more than the value of the home when the loan becomes due. For example, if the heirs want to keep the home rather than sell it, they would not have to pay more than the appraised value of the home at the time the loan becomes due – even if the amount owed on the loan is substantially higher than the value of the home at the time.

Michael Wyckoff

Operations Director – Mortgages Sarasota Area | Mortgages Bradenton Area
(941) 795-7525

Mortgage company providing reverse mortgage in Sarasota, reverse mortgages in Bradenton and the surrounding areas.