Before anyone spends time completing an application or gathering paperwork, I first want to determine whether a reverse mortgage is even a possibility.
To do that, I only need four pieces of information:
- The birthdate of the youngest borrower (or eligible non-borrowing spouse if applicable)
- The property address
- The estimated value of the home
- The current mortgage balance(s), if any
That’s it.
With those four items, I can prepare a personalized reverse mortgage proposal that gives you a good picture of what may be available.
What Does the Proposal Show?
Your proposal is designed to answer the questions most homeowners have before deciding whether to move forward.
It typically includes:
Estimated Loan Amount
An estimate of how much you may qualify to receive based on your age, your home’s estimated value, current interest rates, and FHA lending limits.
Ways to Receive the Money
You’ll see the different payout options available, including:
- A lump sum
- Monthly payments
- A growing line of credit
- Or a combination of these options
Estimated Closing Costs
The proposal includes estimated fees such as the appraisal, title and escrow charges, mortgage insurance, and other closing costs so there are no surprises.
Interest Rate Information
It will explain whether the loan uses a fixed or adjustable interest rate and how that affects your loan.
Existing Mortgage Payoff
If you have an existing mortgage, the proposal will show how much of the reverse mortgage proceeds would be used to pay it off.
What the Proposal Doesn’t Do
A proposal is an estimate; not a loan approval.
The final numbers depend on the appraisal, verification of the information provided, and the interest rates in effect when you decide to move forward.
Your Responsibilities Don’t Change
A reverse mortgage eliminates the required monthly mortgage payment, but you still remain the homeowner.
You are responsible for:
- Paying your property taxes
- Maintaining homeowners insurance
- Keeping the home in reasonable condition
The loan generally becomes due when the last borrower (or eligible non-borrowing spouse under program rules) permanently leaves the home, sells the property, or passes away.
The Bottom Line
My goal is to make the first step as easy as possible.
Instead of asking for stacks of paperwork, I begin with just four pieces of information. If the numbers make sense, we can discuss your options and decide whether a reverse mortgage is the right solution for your situation.
There is no obligation, and many homeowners appreciate being able to see the possibilities before deciding whether to proceed.
Doug Jones nmls 286668
Certified Reverse Mortgage Specialist
Mortgage Magic
