Find Out if a Reverse Mortgage is Right For You

Reverse Mortgages

Saving money is vital for the retirement years,  Many homeowners skimp on saving and rely on tapping into their home’s equity to help get them through through their retirement.

Reverse mortgages can seem alluring and risk-free. When a homeowner turns 62, they can apply for a reverse mortgage to turn their primary home’s equity into cash, subject to the limitations established under law. Since income and earnings are not taken into account, the underwriting process is shortened and simplified. Even taking out a reverse mortgage, the homeowner is still responsible for homeowners insurance, real estate taxes, utilities and repairs. The best part is there is no monthly mortgage payment.

Depending on the equity in your home and the amount drawn against your loan, instead of making monthly mortgage payments to a lender, the lender might be making monthly payments to you. You can choose to be given this money in a lump sum or monthly payments. Your age, value of your house, the loan amount and mortgage interest rate will determine the amount you are entitled.

Type of Reverse Mortgages:

  • Single-Purpose Reverse Mortgages: State or local government agencies may offer these mortgages.
  • Home Equity Conversion Mortgage (HECM): The most popular type of reverse mortgage. The Department of Housing and Urban Development (HUD) administers this federally insured mortgage.
  • Proprietary Reverse Mortgages: Banks, mortgage companies, and other private lenders offer these types of mortgages.

The Downside of Reverse Mortgages:

In 2010, The Consumer Union issued a warning on reverse mortgages. They expressed concern about the suitability of the products and warned that the marketing tactics and advertising geared toward seniors were aggressive and misleading.

The reality is that the spokespeople in the commercials promoting reverse mortgages may not disclose the negatives. If you are seriously considering taking out a reverse mortgage, it is strongly advised that you consult with a real estate attorney to determine if it is the best choice for you and your situation.  You will also need a title company familiar with the peculiarities of closing these unique loans.

Why You Will Need A Title Company When Getting a Reverse Mortgage:

  1. You will be required to purchase a lender’s title insurance policy to insure the title of your property.
  2. Your title company will meet with you to sign all the paperwork at the closing. Choosing a reputable and experienced title company will make the process seem effortless.

Florida National Title Services

Florida National Title Services is a trusted name in title services. We can help you with the closing of your reverse mortgage and we always ‘insure’ peace of mind.

Expert Title Services Jupiter

Florida National Title has years of experience guiding Florida homebuyers through the real estate purchase and refinance experience and have helped them solve the problems that come up in the process. We will decipher the “legalese” and explain what we need and why we need it each step of the way. The blogs to follow will address specific issues to guide buyers to understand the process better and to help them avoid many of the pitfalls. Call us at (561)408-0729 or visit our website.

 

Florida National Title Services, LLC
250 S. Central Blvd., Suite 101
Jupiter, Florida 33458

(561) 408-0729

 

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