Reverse Mortgage

“YOU’VE WORKED HARD YOUR WHOLE LIFE.  NOW LET YOUR HOME WORK HARD FOR YOU”

Although this loan program is a government loan and could be included in the “Government Section”.  We feel it needed to stand on its own.  Much can be said about the Home Equity Conversion Mortgage (HECM) or Reverse Mortgage.  Most do not realize that this is not a new and innovative loan program.  In fact, it has been around since 1961 when a borrower by the name of Nellie Young of Portland, Maine, a widow who was struggling to make ends meet was granted this type of loan as more of a personal favor from her local banker.

Then, in the late 1970’s the reverse mortgage loan was enhanced and offered to the public.  Over the years it has evolved into what we have available today.  Monitored by Housing and Urban Development (HUD) and federally insured by the government, Reverse Mortgages provide flexibility to hundreds of thousands of seniors.  If utilized correctly, just like a “forward” paying mortgage, a reverse mortgage can be a strategic financial tool for those primary homeowners who are at least 62 years of age and above.  With the reverse mortgage also come certain myths and inaccuracies. Feel free to click on the FAQ tab to educate yourself on how this program truly works from start to finish.

As you will come to realize, there’s not a whole lot that is required for a reverse mortgage in Tampa or throughout Florida. Below, you will find just a few small requirements for those of you who are considering a reverse mortgage. If you still have questions, please contact us and we will be glad to guide you through any concerns you may have. Click here for a complete list of HECM approved counseling agencies.

  • Youngest borrower must be at least 62 years of age
  • Primary Residence only
  • Must maintain property, property taxes/homeowner’s insurance
  • Eligible property types include Single Family Residence, Condos, Townhomes, Manufactured homes after 1976
  • Counseling through an approved HECM agency

There are many key benefits when you are considering a Reverse Mortgage. In fact, there are many more than those listed below. Every homeowner in Tampa, it’s surrounding areas and throughout the state of Florida is different and have different needs and desires. We felt the benefits listed are the most common attributes that most, if not all experience with a Reverse Mortgage. Contact us for more key benefits and we will be happy to provide you with additional insight.

  • Pay off current mortgage eliminating monthly payment
  • Help supplement retirement income
  • Help pay for medical expenses
  • Tap into home equity now for unforeseen emergencies later
  • You retain title and home ownership until you either pass away, sell the home or move
  • Does not affect Social Security or Medicare Benefits
  • Leverage equity towards other investments
  • Help pay for grand kids college tuition
  • Can help those currently in foreclosure or Bankruptcy making up back payments as well as paying off the mortgage and saving the home
  • It is based on home equity ONLY. Credit and income are not a factor
  • Government Insured. Absolutely No Risk to the Borrower
  • Available in Fixed Rate, Adjustable Rate, Lump Sum, Equity Line or Monthly Installments
  • Contact Green House Mortgage for many more tips and benefits

Reverse Mortgage Myth: The Reverse Mortgage Is a very dangerous loan with dangerous consequences
Actually, it is quite the opposite. Much of this myth was fueled from the Reverse Mortgage practices during the 1980’s. During that time this loan program was not being monitored by HUD and was not insured by the Federal Housing Administration (FHA). This alone left any senior taking out a reverse mortgage absolutely vulnerable. Today this loan program is fully monitored by HUD and strongly regulated and insured by FHA. This protects the homeowner’s right to their home and equity leaving them and their heirs safe, secure and with many more options.

Reverse Mortgage Myth: The IRS Can Tax My Reverse Mortgage Income
The proceeds from a reverse mortgage can be taken in several ways–as a lump sum, payments for life (tenure), payments for a specific number of years (term), a line of credit, or a combination of these. But which options create an income tax burden? Answer: none of them!

Reverse Mortgage Truth: Income from Reverse Mortgages Isn’t Taxable
This is money that is already yours in the form of equity. That’s because technically a reverse mortgage payment isn’t really income–it’s the proceeds from a loan and will be repaid someday. So income from your reverse mortgage goes further than income from other sources. For example, if you take a part-time job to supplement your retirement income and you are in a 33% tax bracket, $2,000 a month becomes $1,340 a month. But $2,000 a month from a reverse mortgage is not taxable, and you get the full benefit of your money. So by all means, take that part-time job if it fulfills you. Just keep in mind that a reverse mortgage can provide more money with less effort.

Reverse Mortgage Myth: I Need Income and Good Credit to Qualify
It’s tough being retired and on a fixed income. Many don’t have enough income to qualify for a home equity loan, and the economy may have battered their credit ratings as well. That’s no problem with a reverse mortgage.

Reverse Mortgage Truth: You Can Qualify for a Reverse Mortgage with Bad Credit and No Income
Because you don’t have to make mortgage payments, your credit history and income are irrelevant to a reverse mortgage lender. And borrowers with bad credit don’t pay higher interest or fees than those with perfect credit. In fact, you can even be behind in mortgage payments and in pre-foreclosure.

Reverse Mortgage Myth: A Reverse Mortgage Can Make Me Ineligible for Government Programs
Seniors getting needs-based assistance such as Medicaid may be concerned that the extra income from a reverse mortgage could make them ineligible. That’s not generally the case.

Reverse Mortgage Truth: Reverse Mortgages Don’t Have to Affect Government Programs
Regular income from reverse mortgages isn’t technically income, so it doesn’t make you ineligible for government programs. However, taking your proceeds in a lump sum–if you don’t spend it all immediately–can increase your assets to the point where you wouldn’t qualify for certain programs. Ask your reverse mortgage counselor about the best way to take your proceeds if this is a concern.

Reverse Mortgage Myth: I Could Get Evicted from My Home
Seniors have visions of running through all of their home equity and then being kicked out of their homes. In fact, a reverse mortgage is about the surest way of remaining in your home. You don’t have to make payments, and all you have to do is maintain the property and pay your property taxes and insurance.

Reverse Mortgage Truth: You Can Stay in Your Home as Long as You Like
Even if you select a payments-for-life (tenure) option and your loan balance exceeds your property’s value, you cannot be evicted, and you don’t have to repay more than the home’s value.

Final Thoughts:
Reverse mortgages aren’t for everyone, but they are optimal solutions for many. In fact, CNNMoney.com suggests that seniors look into reverse mortgages if they have credit or cash flow problems. A survey by AARP also indicates that over 90% of seniors who took out reverse mortgages were glad they did. Maybe you could be one of them.

Counseling for a Reverse Mortgage is the first step of the process. Below are links and contact numbers to HUD approved counseling agencies for this type of loan. This is a very simple step and should only take 30 to 45 minutes to complete over the phone. Costs may vary from one agency to the next so call around and see which one is best. If you’re ready to begin you can call one of these agencies on your own before you contact us. If you’re not sure, give us a call and we’ll be glad to walk you through the beginning process.

  • Agency Name / Website Link / Telephone:
  • Greenpath Website (888) 860-4167
  • National Foundation for Credit Counseling Website (866) 698-6322
  • Money Management International Website (877) 908-2227
  • National Council on Aging Website (800) 510-0301
  • ClearPoint Financial Solutions Website (877) 877-1995
  • Springboard Website (800) 947-3752
  • HomeFree Website (301) 891-8423
  • Neighborhood Reinvestment Corporation Website (888) 990-4326