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Reverse mortgage information

I have a home with 50k left on the mortgage, value is now 310k. I wish to get a reverse mortgage to help retire and enjoy the rest of my wife and I's lives. Does a mortgage need to be completely paid off in order to get a reverse loan? Is there a limit to the amount of money we can draw upon? Is it distributed annually, all at once? Thanks by robert_197_973 from Augusta, Maine. Nov 29th 2011 Reply


Gene Neal (eneal@athccorp.com)
#31 ranked lender in New York - 273 contributions

It doesn't need to be paid off entirely first off. As far as distribution of funds they can be sent out as either a monthly or yearly and the limit is based upon your loan to value. With a little more information I can give you an idea of how much you would receive.

Nov 29th 2011
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Anthony Hood (tony@equityinvestmentcapital.com)
#178 ranked lender in California - 1,141 contributions

No your mortgage does not need to be paid off how ever the maximum loan amount you can get is 62% of the value of your home so ruffly $195,200.00 you can either take that with monthly payments to you or as one lump sum. it is up to you.

Nov 29th 2011
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Korene Clopine-Seaman (korene)
#69 ranked lender in Arizona - 89 contributions

No it does not have to be paid for. the youngest one on the title must be at least 62 years of age. here is some additional reverse mortgage information for youA reverse mortgage is a loan for senior homeowners that uses a portion of the home's equity as collateral. The loan generally does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. At that time, the estate has approximately 6 months to repay the balance of the reverse mortgage or sell the home to pay off the balance. All remaining equity is inherited by the estate. The estate is not personally liable if the home sells for less than the balance of the reverse mortgage.Eligibility for a reverse mortgage (HECM)To be eligible for a HECM reverse mortgage, the Federal Housing Administration (FHA) requires that all homeowners be at least age 62. The home must be owned free and clear or all existing liens but be able to be satisfied with the reverse mortgage. If there is a mortgage balance, it can be paid off completely with the proceeds of the reverse mortgage loan at the closing. Generally there are no income or credit score requirements for a reverse mortgage.Eligible home typesAlmost all home types are eligible. However, mobile homes must have been built in the last 30 years, the land must be owned, it must be on a permanent foundation, and it must meet an FHA inspection. Some condos and townhomes may be eligible as well.Difference between a reverse mortgage and a home equity loanGenerally a home equity loan, a second mortgage, or a home equity line of credit (HELOC) have strict requirements for income and creditworthiness. Also, with other traditional loans the homeowner must still make monthly payments to repay the loans. A reverse mortgage has no income or credit score requirements and instead of making monthly payments to the lender, the homeowner receives from the lender.With a reverse mortgage the amount that can be borrowed is determined by an FHA formula that considers age, the current interest rate, and the appraised value of the home. The more valuable the home (up to a certain point), the higher the loan amount will be, depending on lending limits.As stated previously, with traditional loans the homeowner is still required to make monthly payments, but with a reverse mortgage the loan is typically not due as long as the homeowner lives in the home. With a reverse mortgage no monthly payments are due, however the homeowner is still responsible for real estate taxes, insurance, and maintenance.Outliving the reverse mortgageA reverse mortgage can not be outlived. As long as at least one homeowner lives in the home as their primary residence and maintains the home in accordance with FHA requirements (keeping taxes and insurance current) the loan does will not become due.Estate inheritanceIn the event of death or in the event that the home ceases to be the primary residence for more than 12 months, the homeowner's estate can choose to repay the reverse mortgage or put the home up for sale.If the equity in the home is higher than the balance of the loan, the remaining equity belongs to the estate.If the sale of the home is not enough to pay off the reverse mortgage, the lender must take a loss and request reimbursement from the FHA.No other assets are affected by a reverse mortgage. For example, investments, second homes, cars, and other valuable possessions cannot be taken from the estate to pay off the reverse mortgage.Loan limitThe amount that is available generally depends on four factors: age (older is better), current interest rate, appraised value of the home and government imposed lending limits. Use the calculator to estimate how much could be drawn.Distribution of money from a reverse mortgageThere are several ways to receive the proceeds from a reverse mortgage.Lump sum - a lump sum of cash at closing.Tenure - equal monthly payments as long as the homeowner lives in the home.Term - equal monthly payments for a fixed number of years.Line of Credit - draw any amount at any time until the line of credit is exhausted.Any combination of those listed above

Nov 29th 2011
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No the loan does not need to be paid off. The amount that you may draw is depending upon The value of the home and your age. You can chose and annual or monthly draw. Or you may take one lump sum. You can feel free to call me toll free to answer some more detailed questions of you like? Ken Reagan @ E Mortgage Mgt. 800-793-9633. Ext 211

Nov 29th 2011
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Ron Pippin (RonPippin)
#26 ranked lender in Utah - 158 contributions

It appears this has been answered well. Summary of what's been said. The remaining balance of your current mortgage will be paid off. You then can pull out equity. How much depends on the youngest borrowers age. How you receive that money is up to you. I have a 20 page booklet I can send you. Just email me at Ron@62andOlder.com and I'll send one to you

Nov 29th 2011
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,707 contributions

Your home does not have to be completely paid off... The amount you get (Loan to Value) is determined by your age.. the older you are, the more they will give you.. You can take the money in several ways.. all up front, some up front and some monthly, all monthly... you decide.. contact a local mortgage broker, not a bank, that specializes in reverse mortgages. He can put together several scenarios for you to compare and determine which will best work for you... WilliamAcres.com

Nov 29th 2011
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Rudi Hofmann (CaPortfolioLoans)
#282 ranked lender in California - 380 contributions

This is the best source for questions about reverse mortgages.http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/hecmabou .... Happy funding, Rudi

Nov 29th 2011
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Brendan Fontaine (brendan.fontaine)
#2 ranked lender in Maine - 89 contributions

No sir. You can do a Reverse Mortgage with a maximum of 60% LTV. Call me in Portland, ME. 207-514-0855.

Nov 30th 2011
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To obtain a Reverse mortgage you and your wife need to be at least 62 years old. You can use part of the proceeds to pay off the current mortgage and then receive the balance in either a lump sum, line of credit, or a monthly amount that you would receive. I would be pleased to provide you specific numbers and other information. My email is bgersh@post.harvard.edu .

Nov 30th 2011
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Shon Atabaki (ShonAtabaki)
#49 ranked lender in Washington - 95 contributions

Lots of good & in some cases very detailed answers already, but to reiterate, you do not have to pay off the mortgage prior to obtaining a reverse mortgage. You can obtain a reverse mortgage with three pay-out options: 1. Lump sum; 2. Regular monthly payments; 3. Equity line of credit. PLEASE be aware that reverse mortgages have VERY high fees. Be sure to shop carefully to make sure you're not losing precious equity to high fees in this process. Best of luck!

Nov 30th 2011
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Dave Metsker (DaveMetsker)
#37 ranked lender in Oregon - 2,317 contributions

Good questions. Depending on your ages, you will have about $150,000 available, minus $50,000 to pay off your existing mortgage, which is required. Brand new programs, just out, allow you to receive the $100,000 balance as a line of credit, at a low fixed rate. Contact me, Dave Metsker, at 503-620-2239, for more information.

Mar 19th 2014
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