Houston Reverse Mortgages

Reverse Mortgages for Texas Seniors made Simple!

A Reverse Mortgage is many different things to many different people. For some it’s a life preserver, whereas for others it is a way to get out of an existing mortgage. Some view it as a way to enjoy life more fully, and for those who have done well in life, it can be a financial tool.

However, is one right for you? Here are several questions you should ask before you consider a reverse mortgage for your property in Houston:

What is a Reverse Mortgage?
A Reverse Mortgage is a unique federally insured and regulated program just for senior homeowners aged 62 and older. It allows the equity in your home to pay you, rather than you paying your home. The amount of money you receive is based on the appraised value of your home and the age of the youngest borrower.

What is a Federally Insured HECM program?
HECM stands for Home Equity Conversion Mortgage, known as a Reverse Mortgage. It is a federally insured and guaranteed program through both FHA (as the insurer) and HUD (as the regulator). This loan is a safe way for you to access the equity in your home without making a mortgage payment as long as you live in your home.

How is this Program “Safe” for Senior Homeowners?
Because of the FHA Mortgage Insurance, no matter what happens in the economy, how much money you receive, or how long you live in your home you will never be required to make a mortgage payment. In addition, no matter what happens to your lender or your home’s value you have guaranteed access to your money.

Today's reverse mortgages are highly regulated by the State of Texas and Federal (FHA/HUD) laws to make them safe and for your protection. Among others, the following regulations apply:  (1) You retain full title of your home. (2) No equity share is allowed, meaning the lender does not slowly take over your home. (3) Fees and costs are Federally regulated.

Why should I consider getting a reverse mortgage?
Why shouldn’t you! A reverse mortgage is an excellent program no matter what your financial situation is, especially in Houston.  

Benefits include:

1. A reverse mortgage makes sense, even if you have enough money to maintain your lifestyle, but may not have enough to pay for unexpected expenses. In that instance, you can use the reverse mortgage funds to cover the expenditure, without suddenly having to deplete your retirement savings.

2. A reverse mortgage also makes sense if you are still making monthly mortgage or home equity loan payments. It will allow you to put money for monthly payments back in your pocket.

3. If you’re having trouble just maintaining a simple lifestyle because of increased costs and limited income this loan is literally a lifesaver since it provides much needed cash.
4. Long thought of as something you would use in a final effort to stay in your home, the reverse mortgage is now being used and endorsed by financial planners.  

5. When used as a financial planning tool, it can provide a financial boost and increase the probability you won't outlive your assets while increasing your retirement spending. 

6. You can also use a reverse mortgage for a college fund for grandchildren, or even to distribute an inheritance to your family while you are still here to see it enjoyed.

7. And finally, if you are one of those seniors who have depleted your retirement savings, and are living on social security alone, the reverse mortgage provides a needed influx of cash to help sustain your lifestyle.

Who owns my home if I get a Reverse Mortgage?
You own the home. You retain the same ownership and title that you have before the reverse mortgage. However, like in any mortgage or home equity loan, you have pledged your home as collateral.

What happens if, in the future, the Loan exceeds the Value of the Home?
Your reverse mortgage will continue thanks to the federal insurance. Any funds in a line of credit or monthly disbursement still available in your account will still be there for you.

How does a Reverse Mortgage compare to a Conventional Mortgage?
In a conventional forward mortgage, you make monthly payments that include the amount you borrowed, plus all the interest to the lender, eventually paying off the mortgage over time. With a reverse mortgage, you receive cash from your lender. You or your estate will pay back the amount you have used, plus the interest added over the life of your loan. As long as you live in your home, you’ll never be asked to pay back a single dollar of the loan.

When does a Reverse Mortgage get paid back and what happens then?
When you sell the property, pass-away or no longer occupy your home as your primary residence for a period greater than 12 months. You or your heirs have three options: 

• The estate would have between 6 to 12 months to sell the home to repay the loan and would receive all remaining home equity from the sale, 
• The estate would also have the choice of keeping the home, usually through a refinanced loan, the loan would still be paid back in full.
• The estate is not legally required to do anything, in this case the lender will foreclose on the property.

Are there any restrictions on cash I receive from a Reverse Mortgage?
No, it’s your money and you can use it the way you want. The funds you received are non-taxable, and will not affect Social Security or Medicare benefits.
What obligations do I have under a Reverse Mortgage?
With a reverse mortgage, you retain the title to your home in Houston. This means that you also have all the obligations as a homeowner. You must maintain the property in reasonably good condition, pay your property taxes (if any are due), maintain homeowner’s insurance, and keep current on any homeowner's association (HOA) dues (if any are due). And, of course, continue to occupy the property as your primary residence.

I currently hold a title in a Trust, can I keep it that way?
Yes you can, but the lender and title company do require that they review the trust and approve it. If you hold a title in a trust, you should immediately notify your loan officer so they can acquire a copy for approval. 

Will my heirs still receive an inheritance?
Yes, after the balance of your reverse mortgage is repaid, all remaining equity goes to your heirs. You will receive information on the principal balance of your loan, as well as a monthly statement showing your current loan balance. 

How much equity remains will depend on several variables: (1) money you’ve received, or the money you withdraw from your account over the life of the loan, (2) how long you stay in your home, (3) the amount of value your home appreciates, and (4) interest rates over the life of the loan (if you have an adjustable interest rate loan).

Why do I have to complete a Reverse Mortgage Counseling?
To assure that you are fully aware of the features of a reverse mortgage program, the government mandates that every person who wants to get a reverse mortgage must participate in a counseling session with an independent, specially trained counselor for reverse mortgages. This can be done face-to-face or by phone.

What’s next?
Call me at (281) 575-8050 to talk more or receive more information about this program, or to schedule a time to sign the application paperwork. I bring the application to your home. This accomplishes two things: first, I can see your property and have an idea of what the appraiser will be looking at, and second, you will be more comfortable in your home while signing the paperwork. However, if you, want you can certainly come to my office to sign the application paperwork.

I look forward to meeting with you soon!

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