Common Questions

How can I qualify for a reverse mortgage? To qualify for a reverse mortgage a borrower must be at least 62 years old, own a home, and have sufficient equity (approx. 50/50 debt to equity or better) in that home. A lender will also complete a financial assessment of the borrower. We can work with Trusts and DPOA documents when needed.

Other than access equity without risk of losing my home and eliminating mandatory payments, how can this help me? The HECM can be very beneficial once we understand the capacities and values it owns. It has a line of credit. It is guaranteed to never be cancelled, reduced, or suspended, and grows at whatever the mortgage interest rate is (velocity, not "rate of return"). Simple transactions can be performed to create "zero cost basis" RMD offset tax deductions, Shelter investments from Medicaid spend down rules, Free up income by channeling expenses to the inexhaustible HELOC growth, defer Social Security to older and higher payouts, Shift from portfolio to monthly income during bad markets, Buy out divorce or family members, purchase homes, help family members with college tuition, and any other good reasons.

When does the Lender take my home? That's not how this works. In conventional lending, within 30 days of the death of either Spouse, another mortgage payment must be made, and continued until the mortgage is paid off, or the property is sold. In REVERSE HECM lending? NOTHING HAPPENS when the first Spouse dies. All equity payments and access to equity transfers from "joint" to "sole ownership" for the surviving Spouse uininterrupted. After the last Spouse dies, the family notifies the lender within 30 days of the date of death. The family will be asked to determine the course of action desired; Sell, refinance, or retire the debt with Estate and/or other assets. The Lender will automatically grant a 180 day extention to the family so time needed to make decisions is available. If (at the end of that period) more time is needed? Another 180 day period is granted. The HECM Lender is like any other lender-they don't want your home; they want the lien to be repaid. As long as the family is earnestly pursuing the disposition of the debt, they are very helpful. In extremely rare circumstances, the debt may be larger than the value of the home. The Heirs simply hand over the keys (it's an exhausted asset) and no further complications arise. Neither the family, Heirs, or estate is subject to repay any shortages; that is the value of the FHA insurance. This is the meaning of "non-recourse".

May I use the HECM HELOC to pay off my home and have a debt free title? Yes!~In fact, it's a little more cost efficient due to the simple interest function of the mortgage. There is also zero prepayment penalties. Further, you choose the rates, terms, frequency and sum paid. If you want to skip for a month, or year, or life? No one will bother you. All payments you do make are voluntary, and have the added benefit of not only reducing your debt, but are immediately re-available for you in the HELOC feature of the program. Many people actually move resources at the bank earning 1/10th of 1% from CD's to their HECM and pay it down (Do NOT pay it off, or you must obtain another HECM to access equity) and start receiving a higher equity distribution (currently, HELOC growth rates are about 4.5%-5.25% tax free, federally insured, federally regulated, and free of any market risks.) Annual equity growth is guaranteed for the lives of the Borrowers based upon the available equity and at whatever the annual renewal rate becomes. This is capped at 9-10%.