Are you a pre-retirement homeowner in Hawaii interested in refinancing your home and looking for an additional way to supplement your income? Reverse mortgages are a unique loan option that allow people who are 62 years or older to convert the equity that they have built up in their home into a sum of cash, and are quickly becoming a popular way for senior citizens to boost their income. If you are interested in learning more about the reverse mortgage process in beautiful Hawaii, contact Dan Turner with Geneva Financial. We can help you understand your financing options and guide you through the reverse mortgage approval and closing process.

How Does a Reverse Mortgage Work in Hawaii?

The FHA Reverse HECM HELOC works spectacularly well in Hawaii for several unusual reasons.

• Property is very expensive here. Even on the outer islands! Paying 100% cash to acquire a home can really make a dent in your retirement income plans. Using a reverse reduces the cash requirement to close your purchase.
• The capacities of the HECM HELOC are outstanding when you’re looking through the prism of retirement income planning.
• Cost of living escalates unfettered. Being able to subsidize your income with tax free equity and no mortgage payment is an incredible advantage.
• Many people appreciate the flexibility of the FHA definition of “primary residence” as being 6 months plus 5 days per year. This compels some folks to keep their mainland home and become “snow birds”!
• Being free of a mortgage payment allows the Retiree greater discretion regarding the activities they want to choose when they live here.
• Florida sucks canal water!

In a reverse mortgage, (also known as home equity conversion mortgage, or “HECM”), a homeowner can borrow from their home’s equity and make voluntary monthly mortgage payments. Essentially, in a reverse mortgage, the lender pays the borrower a monthly sum, unlike in a traditional mortgage where the borrower makes payments to a lender. You can opt to receive the funds in the form of cash or as a line of credit, and you can use the money for any reason you want to, providing an additional source of income for home owners nearing or already in retirement. Many people commonly use the proceeds from a reverse mortgage to consolidate debt, for home repair and improvement costs, to purchase a new home, or for general living and healthcare costs, etc. The amount you are able to borrow depends on your age, and loan limits vary by county. Typically, the older the borrower is, the more they can borrow.

A very well known strategy for the reverse is to calculate the monthly payment that would be required of the Borrower with conventional financing, and invest that money with their Retirement Planner. In just 8-10 years? Enough wealth is created they may want to pay off the mortgage, almost pay it off and enjoy the HELOC for the rest of their lives, convert some, part, or all of the investment into income, or use a small portion of it to purchase Life Insurance and enjoy the remainder!

There are many benefits to getting a reverse mortgage in Hawaii. Besides getting to live in your lovely island home without having to make a monthly mortgage payment, you maintain ownership of the home as long as you continue to pay insurance and property taxes. The loan is not due until you move out of the home or pass away. A reverse mortgage is generally tax free, and there are a variety of ways the loan payment can be disbursed, whether you want to receive it as a lump sum of cash, a line of credit, or a combination of these options.

Requirements For a Reverse Mortgage In Hawaii

When applying for a reverse mortgage in Hawaii, there are some qualification factors to consider that may not apply to “Main Land” residences, including:

• You must own your home, or consider buying a home in Lava Zones 3+ (LZ’s 1 & 2 aren’t eligible for reverse mortgages)
• You must have considerable (50/50) equity built up in the home to refinance or purchase
• You must be 62 years or older
• You must live in the home as your primary residence
• You must have the available financial resources to pay for property taxes, HOA fees, home maintenance, etc.

Getting a Reverse Mortgage In Hawaii

Dan Turner, with Geneva Financial, can help you get a reverse mortgage so you can live in your dream Hawaiian home while receiving a supplementary source of income and without having to make any mortgage payments. Contact our office today for more details.

 

 

-For Retiree’s living in Hawaii Kai, Kaneohe, Waikiki, Ewa Beach, Honolulu, Wapahu, Pearl City, Kailua, Mililani, Manoa, Hilo, Kapole’i, Waikoloa Village, Kailua-Kona, Kamuela, Honoka’a, Mountain View