How a Reverse Mortgage Loan Works
If you are wondering how a reverse mortgage works and whether it makes sense for you, it is best to call and discuss your situation with one of our experienced QK Mortgage agents.
A reverse mortgage loan can be used to pay off any existing loans and can also be used to convert the equity in someone’s home into cash. The reverse mortgage is specifically for those borrowers who are 62 years of age or above. To qualify, you must own a primary residence with substantial equity; if there is an existing mortgage, the balance must be less than half of the value of the home.
Those who qualify for the reverse mortgage may draw equity to cover expenses, pay off some of their existing mortgages or simply better their lives by relieving the pressure of monthly expenses.
Under the new guidelines, there are requirements for savings or income to make the property tax and homeowners insurance payments required. At QK Mortgage, we give a reverse mortgage solution that has helped many live their dream of staying in their home without the fear of unpaid mortgages. For anyone looking into reverse mortgage Los Angeles has many options and great lending programs. Talk to us today and find out if you qualify for the services and loan programs that are available at QK Mortgage.
Why Reverse Mortgage Loan Is Good?
- Pay off your existing mortgage
- Stop making monthly mortgage payments
- Take cash out in a lump sum or in monthly installments
- Stay in your home until you decide to sell or move or pass your home to your heirs
We help people to realize their dreams of paying off their existing mortgages while giving them cash when most needed. A reverse4 mortgage can help to provide a good life in the sunset years and at the same time eliminate monthly mortgage expenses.
We at QK Mortgage are here to talk to you about any questions you may have and options available to you and to provide reverse mortgage information specific to your circumstances. If you are tired of making mortgage payments and you have equity in your home, a reverse mortgage from QK Mortgage could make sense for you.
Benefits of Reverse Mortgage Loan
Many borrowers are now able to afford the kind of life they envisioned in their retirement years with the help of a senior reverse mortgage. Instead of making a monthly mortgage payment to a bank, the existing mortgage is paid off and there may be equity to draw as cash out. No additional mortgage payments are required as long as the home is occupied by the borrower.
Requirements for a Reverse Mortgage
Borrowers who understand how this loan works are in a better position to make a sound decision. It is required that you complete reverse mortgage counseling before making any reverse mortgage purchase. The federal government regulates the guidelines for reverse mortgages, and HUD offers counseling to borrowers applying for a reverse mortgage.
Our team will help you to enroll and help you to get the best reverse mortgage program in the market. There are various options for reverse mortgage programs that you can choose from. We will explain the difference between the fixed rate and the adjustable rate reverse loans. Together, we will look at your needs for cash, your monthly expenses, your income, and the amount of property taxes and homeowners insurance that you will need to pay.
The required minimum reverse mortgage age is set at 62. Current reverse mortgage guidelines require occupancy in the property; and it must be a primary residence. Seniors must have at least 50% equity in their primary residence to qualify for this mortgage, as required by the reverse mortgage guidelines.
Reverse Mortgage Guidelines
Recently, the requirements for reverse mortgages were tightened by the Department of Housing and Urban Development in order to strengthen this program. Many people have questions about what it takes to qualify under the new guidelines. At QK Mortgage, we simplify the guidelines and explain what it takes to qualify in your situation. We help you to understand how the guidelines affect you personally.
The new reverse mortgage rules are intended to protect borrowers from default. In the past, some borrowers were not able to afford their property tax and homeowners insurance payments. New guidelines ensure that a borrower will have enough income to cover all expenses.
The reverse mortgage changes are widely considered to be beneficial for borrowers. For instance, the Federal Housing Administration [FHA] reduced the size of equity that a home owner can access when applying for a reverse loan.
However, the main reverse mortgage changes include the amount that borrower can obtain, which will depend on the following;
- Age of borrower [minimum age is 62]
- The amount of equity in the home
- Interest rate on the loan and whether the rate is fixed or variable
As an example of how the guidelines for reverse mortgages apply, a lender will allow a 62 year old borrower to draw about 50 percent of the appraised value with an estimated 5 percent interest rate [depending on market rates]. By comparison, a 90 year old may draw about 66 percent of the appraised home value with a similar interest rate.
If you have equity in your home and you want to consider a reverse loan, it is important to understand the reverse mortgage guidelines first and make sure that you qualify in order for your application to be approved.
What Is Needed before Submitting Your Application
QK Mortgage agents will explain the pros and cons of reverse mortgage before you apply for the loan. We make sure that you are in a position that you will make an informed decision as far as this mortgage is concerned. Our professionals will guide you step by step. Once you decide to apply, the pre-approval process takes 72 hours.
To better understand how a reverse mortgage works, we provide an overview of the process right from the application stage. However, some of the important things here include;
- Contacting an approved reverse mortgage lender
- Taking a reverse mortgage counseling
- Filling out a form with your chosen lender
- Ordering for a home appraisal
- Understanding how a reverse mortgage works after closing