Florida Reverse Mortgage information - hecm fha
Your Road Map to a Florida Reverse Mortgage - Any journey is much easier when you have a good map.
You Hear About Reverse Mortgages - You are 62 years or older and you own a home. (New rule is only one of the owners needs to be 62 or older in the household) Or your parents are 62 or older and own their own home. You hear about reverse mortgages from a news article or an advertisement or a website. Or maybe from a friend or relative. Or you might contact a reverse mortgage lender on the phone or on the internet. You hear that you can borrow against the equity in your home while you still live in it. You hear that this is a loan you do not have to pay back until you leave the home permanently. Your interest is sparked.
This might be just the right financial solution for a current or a future need. You can use a reverse mortgage to pay off your existing mortgage and lower your monthly expenses. You can use it to pay for health care. Or it might just provide you with the peace of mind that comes from knowing you have cash available.
Upfront Education - How do you begin to learn about a reverse mortgage? John Reardon, Reverse Mortgage Specialist is a professional in Reverse Mortgages and specializes in these loans. He will explain the whole process to you and your loved ones.
We adhere to a Code of Ethics & Professional Responsibility and the Pledge to Reverse Mortgage Borrowers in which we promise to serve you with integrity and professionalism. Your best interests is our only consideration.
Present you with a full range of reverse mortgage products that are available - A Fixed Rate Loan Option or an Adjustable Rate Option;
Explain the terms, benefits and costs of each product;
Clearly explain our responsibilities to you;
Clearly explain your responsibilities under the terms of a reverse mortgage, including paying property taxes on time, maintaining insurance and maintaining your home in good condition;
Carefully review your income, assets and expenses to help you assess whether you can meet these obligations and determine whether the reverse mortgage is the best financial product for your situation;
Meet with you as frequently as you need and, at your request, also meet with other members of your family or your financial advisors;
Explain that, according to Federal statute, you must complete a reverse mortgage counseling session and provide you with a list of HUD-approved counselors you may contact. (As a means of maintaining a hands-off relationship so that you get unbiased third-party advice, a lender is not permitted to recommend any specific counselor);
Prepare you for making your counseling session the most effective by providing you with questions you might want to ask and information you should confirm.
Counseling - Counseling is required for all HECMs. Reverse mortgages are the only financial product (perhaps the only product, period) that require this. Why? Caution. Because reverse mortgages are designed for an older audience who are often on fixed incomes and involves what is usually everyone’s most valuable asset—their home—government and the reverse mortgage industry want to make sure you have all the information you need to make the right decision. A counseling session can take place either face-to-face or by telephone. Counselors have been trained to deliver the required information either way. The session should generally last 45 minutes but can take longer as needed.
Loan originators are not permitted to direct you to a specific counselor or counseling agency. Instead, they are required by HUD to provide a list of counselors, including local agencies and national intermediaries who are selected by HUD to provide counseling by telephone across the country.
Application, Fees & Disclosure - You will be asked to provide some personal information, so that the loan officer can determine whether or you are eligible for a reverse mortgage. Even if you are eligible, you are never obligated to get the loan. You will have opportunities to change your mind. You may be asked to select a loan payment plan. Payment plans can be a lump sum payment, cash at closing, a line of credit, fixed monthly payments, or a combination of these.
Lenders conduct "financial assessments" of every prospective reverse mortgage client during the application process to ensure you have the financial means to continue paying property taxes, homeowners insurance, homeowners association dues, and other property charges.
Lenders analyze all income sources -- including pensions, Social Security, IRAs and 401(k) plans -- as well as your credit history. They look closely at how much money is left over after paying typical living expenses. If a lender determines that you have sufficient income left over, then you won't have to worry about having any funds set-aside to pay for future tax and insurance payments.
If, however, a lender determines that you may not be able to keep up with property taxes and hazard insurance payments, they will be authorized to set-aside a certain amount of funds from your loan to pay future charges. The amount of the set-aside will be based on the life expectancy of the youngest borrower. If set-aside funds run out, you must continue paying property charges using whatever funds are at your disposal. Even if you don't need a set-aside, you can still elect to have one established voluntarily. The lender can pay your property charges either from a line of credit or by withholding monthly disbursements.
The costs that the lender describe to you are capped and may be financed as part of the reverse mortgage.
Loan Processing and Underwriting - The lender orders an appraisal by a professional appraisal firm. It is paid for by the homeowner. This determines the market value of the home. However, the final value is not established until the Loan Underwriter employed by the lender reviews the appraisal and approves it.
After receiving all pertinent information from the homeowner and obtaining other required items, the loan package is submitted to the Loan Underwriter for final approval. It generally takes anywhere from 1-5 days to underwrite a loan. Underwriting involves verifying all information and making sure the loan complies with all laws and regulations.
A conditional approval is provided with a final home value and any repairs or additional inspections required, as well as anything else the lender may need in order to issue a final approval, so the loan can close.
Closing - Once the loan application has been approved, a closing (signing) of the reverse mortgage is scheduled with a title agent or attorney (depending on the state). The lender should confirm the payment plan the borrower wishes to receive (i.e. amount of fixed monthly payments, line of credit), plus any requested cash the homeowner wishes to receive in a lump sum at funding. Closing documents and final figures are prepared. Closing costs are normally financed as part of the loan, but the homeowner is allowed to pay any costs in lieu of financing, if they so choose.
A reverse mortgage must be the only lien on a property. This means, in order to obtain a reverse mortgage you must pay off any existing mortgage(s) or other obligations for which a lien has been placed on the property. You can use your reverse mortgage proceeds to pay off the mortgage or other obligations.
If existing liens are identified, the payoffs are updated accordingly. Your closing agent will pay off all existing liens, verify taxes are paid and make sure that you have a current homeowner’s insurance policy.
Before closing on a reverse mortgage, you may consider seeking the advice of a tax professional or elder law attorney in the event you are faced with a situation that can affect your taxes, Medicaid or SSI eligibility. Social Security and Medicare are not impacted by a reverse mortgage.
Under the best case scenario, it takes a few business days to confirm all fees and payoffs, schedule a closing date, prepare the documents and communicate to all parties involved. Closing agents who are NRMLA members will not pressure you to close by a certain time frame that you are unable to meet or uncomfortable meeting. And you still have an opportunity to change your mind.
Disbursement of Funds - The homeowner has three business days after signing the papers to cancel the loan. (These three days are known as the "Right of Rescission" period.)
Upon expiration of this period, the loan funds are disbursed. The homeowner accesses the funds in the form of the payment option selected. Any existing debt on the home is paid off. A new lien is placed on the home. The homeowner may use the loan proceeds for any purpose.
The only exception to a homeowner's right of rescission is on a HECM for Purchase reverse mortgage. There is no rescission option on a purchase money mortgage.
If you are getting fixed monthly payments, your loan Servicer will disburse the funds on the first business day of each month.
As a borrower, you have the right to change your payment plan at any time. You simply request a new Payment Plan Agreement form from your Servicer. A change may include a small administrative fee of no more than $20. Once the agreement is executed, the new payment plan will go into effect the first business day of the next month.
Life of Loan Issues - After the loan closes, a loan “Servicer“ manages the account and is responsible for disbursing monthly payments to the homeowner (if this payment option is chosen), advancing funds from the line of credit upon request, collecting any voluntary repayments and sending periodic statements.
Servicers have also implemented safety nets that are intended to prevent borrower fraud, identity theft or outside parties taking undue advantage of borrowers.
A reverse mortgage borrower is responsible for staying current on property taxes, homeowner's insurance and homeowners association dues (if applicable). These are commonly referred to as "mandatory obligations." You can pay them yourself or establish a set-aside account and have the Servicer pay them for you.
The Servicer has internal systems in place to inform and alert you if there are any tax and/or insurance issues with your loan and will notify you promptly if you fall behind on either responsibility.
John Reardon, Florida Reverse Mortgage Specialist, NMLS 555210, is dedicated to guiding you through the features of reverse mortgages and the process of obtaining one. John will equip you with everything you need to know to decide if a reverse mortgage might be the right financial instrument for you.
JOHN REARDON, Florida Reverse Mortgage Specialist NMLS 555210
COMMUNITY MORTGAGE SOLUTIONS NMLS 327573
Address: 1030 Palm Coast Parkway NW St 3 Palm Coast, FL 32137
Direct Phone: 904-982-2210 Office Phone: 386-445-4111
Serving all of Florida with convenient service!