Reverse Mortgage FAQ: Answers from Suffolk County’s Most Trusted Reverse Mortgage Providers
At Senior Reverse Network, one of Suffolk County’s most trusted reverse mortgage providers, we offer several reverse mortgage loan options that can help you secure the financing you need to retire comfortably. Our certified and licensed reverse mortgage lenders can help you determine if a single-purpose reverse mortgage, proprietary reverse mortgage, or a federally-insured home equity conversion mortgage (HECM) reverse mortgage is the right option for you. If you are looking for a way to supplement your income during retirement and would like to find out more about a reverse mortgage loan, contact the team at Senior Reverse Network today!
Reverse Mortgage Frequently Asked Questions
Are you a Northwest Harbor, NY homeowner? Are you approaching retirement? Do you need a way to supplement your income so that you can enjoy this important time in your life to the fullest? If you answered ‘yes’ to these questions, a reverse mortgage loan may be the perfect option for you.
You’ve probably heard about reverse mortgages, but you likely have some questions about this unique financial tool. As one of Suffolk County’s leading reverse mortgage companies, Senior Reverse Network’s mission is to set the highest standards in the mortgage industry and provide our clients with the highest quality of care. We always put the people we serve first. If you’re considering a reverse mortgage, we want you to make the most informed decision possible. To that end, below, we share the answers to some of the questions that we’re asked most frequently. We hope that you will be able to use the following information to guide you in your decision about a reverse mortgage loan. If you still have questions regarding this type of loan, please don’t hesitate to contact us. One of our friendly and knowledgeable licensed loan officers will be more than happy to answer all of your questions and assist you with all of your needs.
What exactly is a reverse mortgage loan?
A reverse mortgage loan is a loan that allows you to access part of the equity in your Northwest Harbor, NY home. Unlike a traditional “forward” mortgage (the type of loan you took out to purchase your house), you do not need to make monthly payments on a reverse mortgage. Instead, the loan is paid when you no longer reside in your home. Additionally, when the loan is due, as long as your home is sold to repay the loan, you will never have to pay more than the appraised value of your property.
How do I repay a reverse mortgage?
With a forward mortgage, you make payments each month until the balance is paid off. To repay a reverse mortgage, you or your heirs can sell your Northwest Harbor, NY home, and use the money you made from the sale to repay the balance of the loan, or you can repay the loan using other financial resources and continue to own and live in the property.
Are there different types of reverse mortgages?
Yes, there are three different types of reverse mortgages.
- Single-purpose reverse mortgage. This type of loan is provided by local, nonprofit, and state agencies. The agency that provides the reverse mortgage determines how the proceeds provided by the loan can be used. In other words, you can only use the funds that you will receive from a single-purpose loan to pay for specific items that the reverse mortgage providers have approved; property taxes or repairs that your home may require, for example.
- Home equity conversion mortgage (HECM). A HECM is a reverse mortgage that is backed by the Federal Housing Administration (FHA). With this type of loan, you can access some of the equity in your home and use the proceeds to fund anything you wish; pay off the rest of your forward mortgage, make repairs to your home, establish a line of credit that you can use for emergency expenses, pay for a dream vacation, establish an inheritance for your loved ones, or even purchase a second home. You do have to complete a counseling program that is offered by an FHA-licensed reverse mortgage provider, which does require a fee, and the upfront fees are higher. Additionally, a lending limit is established by the FHA each year; in the year 2020, that limit is $765,600. However, since the proceeds can be used for anything and the loan is federally insured, HECM is the most popular type of reverse mortgage.
- Proprietary reverse mortgage. This kind of reverse mortgage loan is used to secure a larger advance for a home that has appraised for a high value. For instance, if your Northwest Harbor, NY home appraises for more than the FHA lending limit for a HECM loan, you may be able to secure a larger loan with a proprietary reverse mortgage. The lower your existing mortgage, the larger the loan you can secure.
Am I eligible for a reverse mortgage?
The eligibility requirements do vary and depend on the type of reverse mortgage loan you are attempting to secure. However, with that said, there are some basic requirements that you must meet for all reverse mortgage loans.
- Your Suffolk County home must be a single-family residence, a 1 to 4 unit dwelling and you must live in one of the units, an FHA-approved condominium, or a manufactured home that meets the requirements established by the FHA.
- The home you are attempting to withdraw equity from must be your principal residence.
- You must be at least 62 years of age.
- You must either own your home outright or only have a small amount remaining on your forward mortgage. If the latter is the case, you will have to use a portion of the funds that you receive from your reverse mortgage or from another source in order to pay off the remainder of the loan.
- You must have sufficient equity in your home.
- You have to prove that you have the means to continue paying ongoing costs that are associated with your home; property taxes, homeowner’s insurance, home repairs, and homeowner’s association (HOA) fees, for example.
How much of my home’s equity will I be able to access?
The amount of your home’s equity that you will be able to access depends on the specific factors that are related to the type of reverse mortgage you choose. Examples of the factors that will determine how much of your home’s equity you can access include the age of the youngest borrower, the current interest rates, the value of your Northwest Harbor, NY home, and how you choose to have the funds distributed.
What fees are associated with a reverse mortgage?
Like any other type of loan, there are fees associated with a reverse mortgage loan. Examples of some of the most common costs include:
- Lender fees (at Senior Reverse Network, we charge some of the lowest fees in the Suffolk County area)
- Closing costs
- If you are securing a HECM, a fee for the required counseling session
- An upfront mortgage insurance premium
- Interest payments (the loan offers at Senior Reverse Network, we can help you secure the lowest interest rates possible)
- For a HECM, annual mortgage insurance premiums
How are the funds dispersed?
You can choose to have the funds dispersed as a single lump sum, a line of credit, monthly installments, or a combination of these disbursement options.
Have More Questions? Contact Senior Reverse Network Today!
We hope that the above information has given you some insight into a reverse mortgage loan. If you have additional questions or you would like to learn more about your options, please feel free to reach out to us at your earliest convenience and one of our knowledgeable loan offers will be happy to assist you. Call 800-985-7383 or visitwww.srnreverse.com. At Senior Reverse Network, we look forward to helping you make the most of your retirement.
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