Mortgage Loan Q & A

I have a reverse mortgage question?

If a person has paid PITI on their $175,000 home over 15 years and now has taken out a reverse mortgage, how many years can that person expect to be paid back from that mortgage (plus, I guess the mortgage company will be deducting their fees)? And, what happens to the home and the person after the reverse mortgage has ended.
Part of PITI IS the payment toward the house so yes it depends on how much was paid on the mortgage from PITI.
And, I didn’t ask anything about death.
so how many years will this pay down of the mortgage last? 10 years, 15 years, less? what’s your guess?

OK, first of all, I do reverse mortgages, and believe me…we do not get a “huge” commission on reverse mortgages. Quite the opposite actually. A reverse mortgage is not for everyone. And just like it sounds, the mortgage goes backwards not forwards. It’s an EXCELLENT loan for the right person, and it is not for everyone. Instead of making a mortgage payment, the person has 3 options. One is to take out a 1 time lump sum, and make no payments other then taxes and insurance (the loan does a negative amortization). Another is to get a set amount every month, and another is just to refinance and get no cash. The only thing you pay is your taxes and insurance, and no matter which option you chose, the loan does a negative amortization (gets bigger). Reverse mortgage can be refinanced, paid off, there is an end to the loan if the principal balance is paid. The bank does NOT own the house if the person should parish, it is the estates responsibility to sell the home or pay the loan off. There is an income limitation, and age limitation, and reverse mortgages CANNOT BE DONE by a lender that is not HUD approved. If you know anything about HUD, they are on top of every loan that goes through to make sure that there is a true benefit to the borrower. If there is no benefit, the loan is rejected. HUD frequently comes in and audits every loan file done by a HUD approved lender. If they feel there is any fraud, abuse, neglegence, or anything out of line, there is an investigation done and the lender could be shut down. There could also be criminal prosecution depending on the violation.

If you are in the North or South Carolina area, you can e-mail me at work with more questions. Loans are typically lender specific, and different states have different guidelines. If you are not in the Carolinas, I can connect you with a PROFESSIONAL in your area that knows about reverse mortgages to answer your questions correctly. My work e-mail is – sulrich@firstdecisionmtg.com

I hope this helps.

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