Reverse Mortgage Misconceptions in Las Vegas Nevada

Misconception #2

YOUR HOME MUST DEBT-FREE TO QUALIFY FOR A REVERSE MORTGAGE.

INCORRECT.

Even seniors with an outstanding first mortgage or some other debt on heir home may qualify for a reverse mortgage. The proceeds of the reverse mortgage, though, must first be used to pay off such debts.

How much money can I get?

This depends on a few factors, including your age at the time of loan closing, the value of your home, the amount of built-up home equity, and interest rates at the time of origination. Other factors are the type of reverse mortgage product and particular payment option you select. Calculators that can help you estimate how much you could receive under different products and payment options are available at NRMLA’s Web site (http://www.reversemortgage.org), lenders and counselors.

What are my payment options?

You decide how to receive the money generated by a reverse mortgage. In general, your payment options are:

• An upfront lump sum payment;
• Line of credit;
• Fixed monthly payments for as long as you remain in your home (or a predetermined, shorter period); or, if you choose.
• A combination of monthly income and line of credit.

How much does a reverse mortgage cost?

What are the upfront and closing fees?

Many of the same costs of home purchase mortgages apply to reverse mortgages. You can expect to be charged an origination fee, an upfront mortgage insurance fee (for FHA Home Equity Conversion Mortgages, or HECMs), an appraisal fee, and certain other standard closing costs. In most cases these fees and costs are capped and may be financed as part of the reverse mortgage.

Do I need to get an appraisal of my home to get a reverse mortgage?

Yes. Since the value of your home is a factor in determining how much money you can get from a reverse mortgage, an appraisal is required. Normally the lender will order the appraisal, which is paid for by the borrower at the time of application.

Do I need a lawyer to apply for a reverse mortgage?

Legal counsel if not required. However, NRMLA encourages you to seek the advice of a legal, tax, or financial advisor before committing to a reverse mortgage.