Plain and simple, a Reverse Mortgage (also referred to as a  "HECM" or “home equity conversion loan”) is a loan where no monthly payments are required. All principal and accrued interest is repaid when your home is sold by you or your heirs. You continue to retain full complete title and control of your home. Ownership is not shared in any way with the lender. Like with any other loan, you can refinance, pay it off or sell your home at any time. A reverse mortgage is a great tool to aid seniors in achieving financial freedom and independence.

To qualify, you need to meet the following criteria

• Be at least 62 years or older
• The home you are financing must be your primary residence
• You must have some equity in your home (if you are refinancing)
• Purchase transactions are now eligible.

The process is simple

• Discuss your qualifications and options on the phone with one of our Reverse Specialists.
• Meet with your specialist to answer any further questions and complete and review your application (in person or over the phone). We encourage you to include anyone that aids in your financial decisions in this process such as a trusted family member, friend or professional advisor.
• Complete the mandatory government counseling from an approved source such as AARP. (This mandatory safeguard was put in place to make sure you get an explanation of how the program works from a disinterested third party. It can be done by phone and normally takes about 15 minutes). A list of approved counselors can be obtained here (http://www.hud.gov/offices/hsg/sfh/hecm/hecmlist.cfm)
• A licensed appraiser assigned by Allymac will contact you to set up an appointment at your convenience to have your home appraised.
• Your home appraisal and other paperwork are reviewed for approval.
• Your loan specialist will call you to set up a time, date and place for closing. You can arrange for closing to be done at any number of convenient locations including your home if you choose. Discuss your options with your specialist.
  

Common Misconceptions

The bank will own my house!

By far this is the most common thing we hear; it is not true. A reverse mortgage is just a loan. You continue to retain ownership of your home. The lender does not share ownership in any way. When you decide to leave your home, you or your family make all decisions with regard to how the home will be sold, the lender gets paid what is owed and you or your family keep the rest.

This is only a last resort for desperate people.

Also not true. Today’s reverse mortgage programs are a great tool to allow you to plan for future needs. Many people use the reverse mortgage Line of Credit feature as a financial cushion or safety net, even if there is no need for it today. Many also use it as a tool to pay for long term care insurance premiums or to supplement costs that current medical insurance does not cover.

I don’t have enough income or good enough credit to qualify.

You don’t need any income at all to qualify for a reverse mortgage. Credit checks are only done to see if you owe the government any money for things such as unpaid taxes. If you do, these are required to be paid out of your loan proceeds.

I won’t have anything to leave my kids.

This is probably the number two concern we hear from seniors. Again, the house is still yours, it does NOT belong to the lender. You are free to pay the loan off, refinance the loan or sell your home at any time. After the lender is repaid what is owed, the rest belongs to you or your heirs.

I still have a mortgage on my house so I won’t qualify.

Many of our clients have an existing mortgage on their home. One of the best things you can do with a reverse mortgage is pay off existing debts, including your regular mortgage, to eliminate those monthly payments. Speak with a SeniorLoan specialist if you have more questions.