Your home, your retirement
Reverse mortgage is a goverment-insured loan program that allows homeowner age 62 and older to maintain their financial freedom.
Reverse Mortgage FAQ
Here are some of the common and frequently asked questions we get from our clients during the reverse mortgage process.
A reverse mortgage is a government insured program designed for homeowners 62 and older that have some equity built up in their home.
Reverse mortgages are designed for homeowners at least 62 years of age with moderate to significant equity in their homes who want to eliminate their mortgage payment and/or receive additional cash. There are a few reverse mortgage options to choose from, so we’ll help you find the right one for you. Talk to a Reverse Mortgage expert to get started now.
No. You can use the money you receive from your reverse mortgage any way you would like, everything from medical bills, to credit card debt to remodeling your home. There are no limits to how you can use your proceeds.
Definitely! Any existing mortgages will be paid off at closing. Then you’re free to enjoy the financial freedom that comes along with eliminating your mortgage payment. You are still responsible for maintaining the property, paying property taxes and insurance.
Vacation homes or other secondary residences, and rental properties of more than four units do not qualify. But if you’re looking to get cash out of a property you don’t use as your primary residence, get in touch with the Ameristar Reverse Mortgage team for their mortgage options.
Not necessarily. Consult your financial advisor to get a full understand about your options.
Currently the IRS treats monies received from a reverse mortgage to be loan advances and not taxable income. We recommend a tax advisor for specific questions.
A homeowner who has put the home in a living trust can usually take out a reverse mortgage, subject to review of the trust documents.
The proceeds from a Reverse Mortgage do not affect these benefits. It can affect Medicaid and Supplemental Security Income. We recommend that you consult your financial advisor.
Interest is not deductible until you pay the reverse mortgage. You should consult a tax advisor for detailed tax advice.
Most of the costs can be financed as part of your new reverse mortgage, including origination fee, closing costs, and charges incurred by the title and escrow companies. The only out of pocket expenses the borrower must pay during the actual process is the counseling fee and our upfront appraisal deposit. The counseling fee is approximately $125 and can vary by state and location. This fee is charged by the counselor and is not a fee from Ameristar Reverse. Our upfront appraisal deposit is used to cover the appraiser’s expenses and can vary from state to state. A licensed expert will be able to answer any additional questions you may have.
The borrower will pay back the cash advances they have received plus accumulated interest and any upfront costs that were financed initially will also be added to the loan balance.
All reverse mortgages are “non-recourse” loans which means that the original borrower (s) will never owe more than the home is worth, regardless of the loan balance. Once the last owner(s) passes away or moves out of the home permanently, the heirs can sell the property and pay off the existing mortgage balance or they can refinance the property. If the heirs choose to keep the property, they will have to refinance the entire amount of the existing mortgage balance regardless of home’s appraised value. Heirs can buy the property for less, up to 95% of the current appraised value of the home.
No, the title remains in the name of the borrower(s), however, taxes and insurance must be kept current and the property must be maintained in order to avoid early repayment of the entire loan amount. Under some circumstances the loan servicer or FHA may be required to foreclose if you fail to meet your obligations under the reverse mortgage.
You are required to pay your property taxes, keep current the property insurance in place, maintain the home and notify the lender if you will be away from the property for an extended period of time.
The loan is due and payable when the last remaining borrower sells the property, permanently leaves the home, or passes away. Until these events take place you live in the home and make no payments to the lender. You are still responsible for maintaining the property, paying property taxes and insurance.
No, repayment can be accomplished by refinancing the existing reverse mortgage to a conventional mortgage loan. The choice is theirs to make! If the heirs sell the property and the proceeds exceed the amount of the home, they can keep the difference. For cases where the proceeds are not sufficient to pay off the loan, then the bank absorbs the difference. If the heirs choose to keep the property, they will have to refinance the entire amount of the existing mortgage balance regardless of home’s appraised value. We can help you with that too! Visit the Ameristar Reverse Mortgage for all your traditional mortgage information.
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Free Personal Analysis
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Time is running out for saving money
The mortgage insurance is going up to mandatory fee of 2.00% Upfront and 0.50% Per Annual. You can still get the previous fees and also be able to get more funds as long as you get started by October 2, 2017!