Florida Reverse Mortgages and Rates
Reverse mortgages are an excellent solution to financial concerns for many seniors across Florida. Home Equity Conversion Mortgage (HECMs) are the most popular reverse mortgage available. However, they are not for everyone, and applicants should be confident that they understand the negatives as well as the positives–prior to signing up for a reverse mortgage.
Reverse Mortgage Highlights
- No monthly payments
- The lender pays you
- No income or credit requirements
- Convert your equity into cash
- HECMs are insured by the Federal Housing Administration
- Mortgage Insurance Premium (MIP) in conjunction with Florida homestead law helps protects you from losing your home.
- NOTE: Different states such as New Hampshire have different homestead laws and rights under those laws, seeking the advice of a seasoned real estate attorney about homestead law is recommended.
Reverse Mortgage Loans Available in Florida
To be eligible for a Reverse Mortgage the borrowers must:
- Be 62 years old or more
- Must own the property and occupy it as a primary residence
- Must maintain the home with required repairs.
- Pay the insurance and property taxes.
- The Property must meet FHA property standards
- The applicants must participate in an informational counseling session
- must maintain Home Association Fees if applicable
- If you own a condo, the condo association must be a HUD approved Condo Association
The Reverse Mortgage Loan is based on:
- The age of the youngest borrower
- The current interest rate
- The lesser of the appraised value or the FHA insurance limit
*** Can we do a “Jumbo Reverse Mortgage Loan”? Yes, but the rules around the available loan to value change dramatically.
**** Can we refinance our current Reverse Mortgage? Yes, a reverse mortgage can be refinanced after the original closing date is great than 18 months ago. Often this is only a benefit if someone has the ability to capture capital appreciation. The borrower(s) should always be aware of any solicitation of a reverse mortgage refinance that it’s a true benefit to themselves and not a greater benefit to the loan originator just out for compensation.
Reverse mortgages can be used to:
- Pay off debts
- Pay for medications or long term care needs
- Pay property taxes
- To go on vacation
- Pay for education of grandchildren
- Pretty much anything else you can think of
- Research the best available options based on your requirements by using a qualified and experienced loan originator.
- In order for seniors to be fully aware of the financial implications, they MUST attend third party counseling through official HUD – approved agencies. This is to ensure that they understand the type of reverse mortgage they are about to sign. Counseling can be arranged by contacting the National HECM Counseling Network or directly through the HUD.
- The application for the reverse mortgage will be completed with our assistance and will include your agreed payment options:
- Lump sum
- Monthly payment which can be for a designated period of time or as long as you live in the home
- A line of credit which can include installments or unscheduled payments, which are available until the line of credit expires or is exhausted.
- A combination of the above three
- The processing of your application will include the following. Your lender will order the appraisal, a title report, a credit report, and lien pay-offs.The appraiser will uncover any structural defects or repairs that maybe required, and determine value of your home.
- Once all of the information has been collected, the lender will finalize the necessary parameters. They will package and submit the loan for the underwriting, and then process final approval.
- The closing is only scheduled once the loan has been approved. Initial interest rates are calculated, and normal closing costs are included as part of the loan.
- There is a mandatory three day cooling off period stipulated by law. After which, the loan is applied to any previous debts on the property and funds are disbursed according to your payment option.
Unlike traditional loans, there are no monthly payments to be made during the lifetime of the loan. The debt from the reverse mortgage becomes payable in full immediately when:
- The home is sold
- The home is no longer the primary residence
- The borrower(s) pass away
Upon the death of the borrower(s), the heirs can simply walk away from the home without liability or obligation to repay the loan or they may sell the home and the outstanding loan balance will be repaid from the sale of the home. Alternatively it the existing reverse mortgage could be refinanced or complete a purchase transaction. All of the remaining equity belongs to the heirs or to the estate. Upon the death of the last spouse/borrower the family/children may purchase or refinance the home at the lessor of the outstanding loan amount or 95% of the appraised value.
Counseling information for reverse mortgage applicants typically takes 1-4 hours.
The counselor must be employed by a third party non-profit or public agency that is approved by the HUD (US Department of Housing and Urban Development). The counselor is required to use loan analysis and comparison software which follows the HUD’s counseling policies and procedures.
What is Included in the Class?
- A complete review of your budget, which includes your current income and outgoing expenses.
- A complete review of that TALC Disclosure, which you will receive from your lender regarding the future total cost of the loan.
- A complete review of interest rates which are involved in the reverse mortgage you are about to sign.
- A complete review of the property repairs, if any are applicable.
- A complete review of terminology used in the contractual paperwork, including definitions.
- Discuss any other possible options which may be available to you, given your current financial and personal situation.
- You cannot vacate it for more than 6 months in a calendar year. (Homestead)
- You can lose your home if you do not pay your property taxes HOA or home owners insurance.
- You can also lose your home to mechanics lien (outstanding bills from contractors)
If you have any questions or would like further assistance please contact us directly and we will try our very best to help wherever possible.
For further information about getting the right mortgage for you and to arrange your ‘NO-FEE ASSESSMENT’
CALL US on (+1) 941-921-1110