Author: jeff@nwreverse.com

Wondering if you meet the qualifications for a reverse mortgage?

Thanks to reverse mortgages, many senior homeowners have been able to make home improvements, travel, pay off medical expenses, or supplement their income by tapping into their home equity. Reverse mortgages have become much safer, more accessible, and more popular thanks to the current Federal Housing Administration (FHA) rules.

There are several different reverse mortgage programs, which vary based on how you choose to receive your funds (one lump sum, monthly payments, or a line of credit), the value of the home, and how the loan is insured. Qualifications for reverse mortgages differ based on the program that is optimal for your situation.

The FHA-insured reverse mortgage or Home Equity Conversion Mortgage (HECM) is the most common reverse mortgage and comes with specific application requirements, including:

Age Requirement

Since reverse mortgages are for seniors, at least one of the borrowers must be 62 or older to qualify for the HECM program. If you or your spouse is not 62 years or older, the younger spouse can be considered a non-borrowing spouse on the loan. The spouse who is not at least 62 can remain in the house after the death of the spouse who is 62 years or older, but they will not have access to the related funds. A younger spouse could also affect the amount of funds available to you.

Home Ownership

When qualifying for a reverse mortgage, you must own the home outright or have substantial home equity. Even if you have an existing mortgage, qualifying for a reverse mortgage may still be possible if your equity is 60% or more. The reverse mortgage would pay off your mortgage and any other property liens before issuing any additional available funds to you.

You must live in the home as your primary residence. Though you may own other homes, vacation homes are ineligible for reverse mortgages. Multi-unit homes may be eligible if you live in one of the units. Some manufactured homes, condominiums, and townhouses may be eligible if they meet HUD requirements. Ultimately, to decide if your home meets the qualifications for a reverse mortgage, an appraisal will need to take place.

Financial Requirements

The borrower(s) must meet with a HUD-approved reverse mortgage counselor before applying for a reverse mortgage loan. The session is to ensure that the borrower comprehends the reverse mortgage process and understands the loan terms and the associated costs.

One of the qualifications for a reverse mortgage is that the borrower must show that they have the ability and are willing to meet loan obligations, including upkeep of the property and staying current on property taxes and insurance. The lender must financially assess all reverse mortgage applicants to determine their ability to fulfill loan obligations. If it is determined that the borrower may not have the financial ability to stay current on home maintenance, taxes, and insurance, a portion of the reverse mortgage proceeds may be set aside to cover these costs.

Other Considerations

A few other things to keep in mind when applying for a reverse mortgage are:

• A current appraisal will be required.
• Reverse mortgage loan amounts are based on current interest rates.
• Closing costs can usually be financed in the reverse mortgage with no out-of-pocket costs to pay at closing.

Have Questions? Let Northwest Reverse Mortgage Help!

It may seem a bit daunting considering all the rules for qualifying for a reverse mortgage. That’s where Northwest Reverse Mortgage can help. Our reverse mortgage specialists can help you determine if you qualify and give you the best options for your circumstances. Contact us today to set up an appointment to get started!

Image Source ITTIGallery / Shutterstock

Understanding How Reverse Mortgages Work

You have probably seen commercials and heard your friends discuss reverse mortgages but they sound complicated. We get that so, we have broken down some of the basics around “How Does a Reverse Mortgage Work?” in this article.

Reverse mortgages are loans for seniors 55 and older who want to convert the equity in their homes into funds that they can use now. 

Reverse mortgages are similar to regular mortgages in that they are both loans, using your home as collateral.  In a traditional mortgage, you purchase a home and pay the monthly lender payments based on the amount borrowed.  In a reverse mortgage, the homeowner either owns the home outright or has considerable equity in the home, which is used as the loan’s collateral and the homeowner receives cash from the lender.     

What Are The Requirements For a Reverse Mortgage?

Reverse mortgages are not for everyone.  There are various requirements to qualify for these loans. Age is the first qualifier, with the minimum age being 62 for the HECM reverse mortgage and 55 for various proprietary loans.  There is no maximum age.  The borrower must also either own the home free and clear or have substantial equity in the house.  The U.S. Department of Housing and Urban Development (HUD) requires that the borrowers complete a counseling session before taking out a reverse mortgage, which walks applicants through the pros and cons of having a reverse mortgage.  

The borrower must also occupy the property as a primary residence.  Vacation, seasonal, and unoccupied properties do not qualify for a reverse mortgage.  The borrower must not be delinquent on any federal debt and must have sufficient funds to pay for property taxes, homeowner’s insurance, mortgage insurance, and possession of a home in good repair.  

Though the borrower still owns the home, just like with a traditional mortgage, the mortgage is payable in full if they die or move.  If the borrower dies, their heirs will need to pay the mortgage in full, either with their funds or with equity from the home’s sale.  If the house sells and cannot satisfy the loan balance, the heirs are not responsible for shortages.   When wondering “How Does a Reverse Mortgage Work?” Northwest Reverse Mortgage is your local broker with the answers you need. 

How Are Funds Distributed With a Reverse Mortgage?

There are generally two types of reverse mortgages: Variable Rate and Fixed Rate.

With a variable rate, a borrower may receive a higher limit to the principal if they are older or if the property has a greater value or a lower interest rate.  The variable rate options for receiving your proceeds include:

• Equal monthly payments 
• A line of credit
• A combination of payments plus a line of credit

With a fixed rate, the homeowner generally receives a lump sum payment.  Speak with your lender about all the options available to you.  They will help you determine the best way to proceed, usually based on how you plan to use the distribution.  Some ways that homeowners use the funds from a reverse mortgage include:

• Medical expenses, including home accessibility improvements
• Home improvements or repairs to the home 
• Supplement to retirement income

How Does A Reverse Mortgage Work?

A reverse mortgage makes it possible for homeowners 55 and older to use the equity in their homes to cover necessary expenses and supplement their income to live more comfortably during retirement.  The experts at Northwest Reverse Mortgage can help you understand “How Does a Reverse Mortgage Work?” walk you through the process and determine the type of reverse mortgage that will best suit your needs.  We are licensed professionals and serve homeowners in the northwest: California, Oregon, Washington, and Idaho.  Contact us today with questions, or visit one of our convenient locations for more information. 

Image Credit: William Potter

Shutterstock

There are many mortgage lenders operating nationally which operate off of successful wholesale lending models, some of which have the resources to advertise phone numbers attached to centralized call centers. In addition to providing a lot of loan volume, these companies can also be powerful sources of education for reverse mortgage borrowers across the country, even for those borrowers who may not end up transacting with those larger lenders.

For many borrowers — especially seniors who may prefer having easy access to a loan originator in their own backyard — the touch of a local operation can be essential to capturing their business. For those reverse mortgage lenders who specialize in offering a local touch, there is very little substitute for connecting with a borrower at that more personal level. Additionally, forward loan officers unaware of reverse mortgage options need to be educated about when a reverse mortgage would make more sense for a senior client.

These are some of the perspectives shared in a webinar hosted by RMD earlier this summer, which focused on the topic of local reverse mortgage business and the differences it can have with larger operations.

The importance of the local touch for some borrowers

The educational value of large print ads or national television commercials devoted to the reverse mortgage product category should certainly never be understated in any conversation about an industry that is very reliant on customer education. However, even if a lender had the most persuasive ad in the world, there are some borrowers who will simply never be captured by a phone number to a call center. For those seniors, the local touch is key according to Jeff Foody, president of Northwest Reverse Mortgage based in Clackamas, Ore.

“The local presence is important,” he says. “These are people that don’t want to call the call centers out of California or Florida, they want to deal with somebody who is local, they want to know that in the event that something goes wrong, they can go knock on our office doors and see somebody’s face. That never happens, but they at least want to have that feeling they know that they can.”

It goes beyond just having the ability to knock on an office door, though. It also goes to a simple preference for supporting businesses which operate locally, a principle which some borrowers can simply never be shaken from.

“They want to know that they’re keeping the business local. Even though we know the appraisers are being pulled from pools in the area, they want to know that they’re working with people that are all local, it’s a comfort level to them,” he explains. “I can’t tell you the number of calls that I get on a weekly basis from people that were looking for reverse mortgage information. They might’ve called one or two of those big national companies, they got a DVD or they got information, and then they ended up calling us because we’re local. I’d say we get tons of those [types of clients] because people prefer to deal with that local feel.”

The ‘system’ of non-reverse loan officers

Whether rightfully or wrongfully, some loan originators across the forward and reverse sides who operate at a less personal level than the local practitioners may also create a perspective in a borrower’s mind that they are sniping for business at any cost, Foody says. As well-meaning as originators in banks, credit unions, and lenders are, some borrowers may harbor a perception that is difficult for them to shake.

“When all you know is a hammer, everything looks like a nail,” he says of these perspectives. “And if all you know is a 30-year fixed, everything looks like a 30-year fixed.”

However, there are some loan originators even at the local level who can fall into that mindset not because there’s anything wrong with them, but because they’re also not aware of other options including a reverse mortgage, particularly if all they’re familiar with is the forward side of the business.

“I worked with a local mortgage bank, and created a reverse mortgage division for this local mortgage bank,” Foody says. “I had been with them for around eight years, and one of their top loan officers referred me to do a reverse mortgage for her parents. I went in to meet with them for the first time and as I was trying to get through the numbers and the figures, it turned out that this loan officer had just refinanced her parents into a 30-year fixed about a year prior.”

Though Foody had been with the bank for a long time up to that point, he asked the forward originator why her parents were not referred to him at the time the forward loan was refinanced, and it was simply because a reverse had never occurred to her before that point.

“It’s up to us to educate them,” Foody says. “A lot of those referral partners, part of their issue is they don’t want to be the ones to suggest a reverse mortgage to a client if they don’t feel comfortable and confident in explaining what a reverse mortgage is. We all know that reverse mortgages still have a negative connotation amongst a lot of people, and they don’t feel like they’re comfortable educating people about it, that’s our job to do that.”

Education as a path forward, and its importance locally

Foody is adamant that these issues can be overcome as long as the industry at all levels — but perhaps particularly at the local level — takes the time and effort to adequately educate clients and referral partners about how a reverse mortgage can be applied to a senior’s financial situation.

“The only way that you overcome obstacles is through education,” he says. “And so, we have to go out there and educate these potential referral partners. We’ve got to do a lunch-and-learn at the bank or at the credit union, sit down, and explain to them what reverse mortgages are. Inevitably, you’re going to change their perception about what a reverse mortgage is if you can educate them and overcome the obstacles.”

Part of having the authority to educate about reverse mortgages specifically, at least for Foody, comes from specialization. As a reverse mortgage practitioner who has never engaged directly in traditional mortgage business, he knows that using that information will immediately declare to borrowers or students at continuing education classes that he has a specific dedication to the reverse space.

“What we don’t do as a company is any traditional forward mortgages,” he said. “I’ve never done one, all I do is reverse mortgages. And for me, that’s my pitch: I say to banks, credit unions, and other mortgage companies, ‘I don’t do what you do, and you don’t do what I do. Let me help you do the reverse mortgage. If we get into it and the appraisal comes in low and I can’t make the reverse mortgage work, I’ll refer it back to you.’”

This helps those partners to understand the value and potential power of specialization, as well as the potential benefit a reverse mortgage can offer a client, Foody says.

Companies featured in this article:
Northwest Reverse Mortgage

Click here to see the original article: Reverse Mortgage Daily

June 15^th is World Elder Abuse Awareness Day, and COVID 19 has only increased our need for thoughtful and diligent work.

 

Elder abuse includes far more than physical harm, and during the growing isolation of the last year, rates of fraud, neglect, and financial exploitation increased. The National Center on Elder Abuse (NCEA) is working harder than ever to protect our seniors, and their efforts are gaining momentum.

 

While abuse rates may have increased, the underlying realities and the NCEA’s work to prevent and address these are not new. For almost 30 years the NCEA has fostered relationships among multiple public and private agencies like the Social Security Administration (SSA) and Consumer Financial Protection Bureau (CFPB) as well as industry leaders and trade organizations working with senior clientele.

 

These partnerships have also spun off other inter-agency collaborations. The CFPB and FDIC have worked together to make available free, educational materials to help financial professionals and family members avoid, recognize, and report various forms of elder abuse. Anyone interested can download materials from the FDIC Website or CFPB’s Resource Center.

 

The NCEA also works to directly shape policy informed by research. However, addressing elder abuse takes more than just reporting and legislation, and the best prevention is a social, rather than individual, effort. The greatest risk factors are related to isolation, and so many are looking for programs that build relationships. One law enforcement initiative is working to Connect Communities & Neighbors.

 

Our team at Northwest Reverse Mortgage recognizes that our senior clients are invaluable community members, but they are also often uniquely vulnerable. That’s why we are committed to protecting and educating the people we serve and their families. We are glad for the many professionals and agencies who share these priorities.

 

If you suspect you or a loved one have been the target of elder fraud, you can call the National Elder Fraud Hotline for help: (833) FRAUD-11 (833-372-8311).

NW Reverse Mortgage celebrates milestone, donates $1,000 to nonprofit organization Gresham Senior Center

In celebration of hitting an amazing milestone, an Oregon company donated to a Gresham nonprofit center dedicated to uplifting local seniors.

Northwest Reverse Mortgage presented a check for $1,000 to the Gresham Senior Center Wednesday morning, May 5. This donation commemorates the company saving customers more than $1 million in monthly mortgage payments, collectively.

“It’s important to keep this facility open and functional — they are making a difference for so many in the community,” said Breazy Wirth, business development specialist. “We hope others follow in our footsteps by making donations to the local senior centers in their areas.”

The donation comes at a crucial time for the Gresham Senior Center, 600 N.E. Eighth St., as it continues to rebound from a difficult year that saw fundraisers shuttered and finances hit a dire place. The money will help handle looming utility bills and other payments.

“This helps us get through the pandemic until we can safely reopen,” said Paul Nasiatka, president of the center.

Northwest Reverse Mortgage is a local company dedicated to guiding people aged 55 and older to a more secure future through accessing home equity or purchasing a new home with a reverse mortgage. Learn more at nwreverse.com

See the original article here

Jeff Foody discusses the huge milestone his company hit and why it is so important to support our local senior centers in the interview below on KOIN’s AM Extra.

 

Jeff Foody was featured on FOX’s GOOD DAY OREGON discussing how the impacts of the economic shutdown during COVID have negatively affected seniors and how his company used a major milestone as an opportunity to give back.

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Northwest Reverse Mortgage is passionate about supporting our local communities!

Did you know you can give back to your community without giving anything? Your Fred Meyer Rewards Card makes this possible! Sign up for their Community Rewards program today to help your local non-profit. When you shop at Freddie’s, your non-profit is sent additional rewards, so you aren’t giving up anything- it is an additional perk of being a Fred Meyer rewards member.  Check out the simple video below for directions on how to set your card up for the Non-Profit of your choice!

*Northwest Reverse Mortgage is not affiliated with Fred Meyer in any way.

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There are many other opportunities to help the charities in your local area; here are a few ideas:

• Call your local senior center and ask them about the ways you could donate or be of service with your skills.
• Some charities, like the Gresham Senior Center, are accepting cans and bottle donations that they return for cash. Their bottle drop program helps sustain them while they have minimal income.
• Consider donating the proceeds of your garage or estate sale to a local charity.
• Host a challenge or event to encourage donations.
• Like your local senior centers on social media, sign up for their newsletter, and share their posts.
• Many senior centers provide a service like quilting or foot care, for example. Find out what services your local senior centers provide and become a customer.

Northwest Reverse Mortgage is committed to our communities; taking these simple steps could help our local charities get more much-needed funding. Donating or volunteering with a local charity not only helps our communities, it makes you feel good and can lead to a better quality of life.

Article written by Christopher Keizur and published in the Gresham Outlook May 7th, 2021