Could your home help finance your retirement?

Reverse mortgages are a hot financial product these days, mainly because mortgage lenders and brokers see them as a way to revive their flagging business. However, they actually are a great financial tool under the right circumstances, as I wrote about today.  Quite simply, they are a way that older homeowners (62 and up) can tap the equity in their homes for living expenses without having to pay the money back so long as they remain in the home. If that sounds like something that interests you, read my story and check out these great pamphlets

Home Made Money from AARP

Money from Home from Fannie Mae

Comments

[Donna Moore]

Kudos for publishing a positive article on the mortgage industry. As a licensed mortgage broker who specializes in the FHA Reverse Mortgage product, I would also stress that seniors should be sure to only deal with licensed individuals. Although a lender must be licensed with FHA, it is not necessary for it’s loan officers to also be licensed. I firmly believe that requiring all individuals selling a reverse mortgage to have a mortgage brokers license, would deter the misrepresentation by inexperienced or unscrupulous sales agents. Licensing insures the consumer that the Florida Department of Financial Services regulates the conduct of the licensee and they are held to a higher standard. A licensed mortgage broker has much more to lose than an unlicensed “loan officer”.
I also would like to clarify the closing costs of a reverse mortgage. Foremost, the costs typically come out of the proceeds, rarely is there an out of pocket expense. A substantial part of the fees are the FHA Insurance Premium, the state tax stamps, intangible tax and recording fees on the mortgage. These are all based on the value of the home and/or the loan. Yes, as a mortgage broker I get paid for originating the loan, however that fee is also regulated, unlike many of the fees in a standard forward mortgage.
I did not just recently jump into the Reverse Mortgage industry. However, the first one that I wrote was by accident when I was referred to a couple who’s current mortgage was 63% of their monthly income. Refinancing them into another forward mortgage would have been unethical. In looking for a solution to their problems, I researched reverse mortgages, it definitely changed their life and showed me how my career could be more fulfilling.
Thank you for dispelling some of the myths and making seniors aware that they do have options in what really should be their “golden” years.
Donna Moore
Licensed Mortgage Broker, Loanwell Financial
Clearwater, FL
License # 580126