Tag: homeowner responsibility

Banks vs Brokers vs Direct Lenders – Navigating HECM Reverse Mortgage Professionals

reverse mortgage advisor connecticutSo, who are these HECM Reverse Mortgage professionals, anyway?  And how do you know which is the right fit for you?  

I was recently asked by a borrower’s attorney to take over a loan application, because after two months nothing, and I do mean nothing, had been done by the original reverse mortgage 
broker!  It’s frustrating for me to see situations like this when I know full well that borrowers have alternatives – but the borrowers usually don’t know this.  Here’s some information I think anyone considering a HECM reverse mortgage needs to know about the various professionals who work in the industry:

Banks and Credit Unions – Most local banks and credit unions do not offer reverse mortgage loans, although sometimes the larger ones will.  Unfortunately seeking a loan through them can often mean little or no face-to-face time, and it’s not uncommon for these banks to leave the industry down the road.  At one time Wells Fargo and Bank of America were in the business, but they quit, leaving their borrowers with loans that few employees can understand. 

 Brokers – A reverse mortgage broker is a third party individual that is licensed by the state but doesn’t work directly with a lender, instead they essentially shop the marketplace.  When working with a broker, borrowers will pay higher fees because they will have to cover the costs of the broker!  In addition, because all transactions run through a third party, things can easily get slowed down – or even stalled – like in the situation I mentioned above.   

Direct Lender Advisors – This is the category I fall into.  Working directly with a lender that specializes in FHA insured HECM reverse mortgages, such as Retirement Funding Solutions, I’m able to offer local, personal, face-to-face time with clients, and eliminate the need for costly third-party fees.  (Be forewarned most lenders do not offer face-to-face meetings or allow you to work with the attorney of your choice.)  I’m able to do all this while ensuring the smoothest, most efficient transaction possible because I am handling the loan and not farming it out to another company.

HECM reverse mortgages are available to individuals and married couples age 62 and older.  These FHA insured loans allow homeowners to live mortgage and loan payment free until they pass away, permanently leave the home (meaning 12 consecutive months), or they default on financial responsibilities associated with the home, such as property taxes or homeowner’s insurance.  The funds are available via monthly installments, a line of credit, a lump sum, or even to purchase a home

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.

What Are Reverse Mortgage Borrowers Responsible For?

reverse mortgage advisor connecticutThe HECM Reverse Mortgage program in Connecticut continues to help thousands of retirees create the life of their dreams.  Homeowners, age 62 and over, are eligible for this type of loan.  A huge advantage is the borrowers will live mortgage payment FREE, but they will still have some responsibilities, including a small amount of financial obligations.

Here are the four main commitments borrowers of a reverse mortgage will continue to be required to take care of:

Homeowners Insurance

A reverse mortgage is like other conventional loans requiring the holder to purchase and maintain homeowners insurance, but unlike a conventional loan, this is not part of the loan itself and must be maintained by the homeowner as a separate entity. 

Property Tax

This too is the same as with a conventional loan. The reverse mortgage homeowner will need to pay the property tax. Depending on your financial need, assistance may be available to help pay or defer property taxes.  Your reverse mortgage advisor and your local human services office would have more information about such assistance.

Home Maintenance

Your home remains in your possession, so the maintenance of your home remains your responsibility.  Any applicable HOA fees also remain the responsibility of the borrower.

Utilities

All utilities, such as electricity, gas, water, and trash will remain the borrowers responsibility.

Reverse mortgage is an individualized, specialized loan for those 62 and older that allows older Americans to tap into the equity of their home while living mortgage and loan payment free.  The funds can be accessed via a lump sum, line of credit, monthly installments, or even to purchase a home. If you are planning ahead let your advisor guide you to best suit your needs and desires.

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.