Happy seniors discover mortgage options at Palm State Mortgage. Palm State Mortgage Company invites you to read or review the previous blog before continuing to read this one because this is Part II of our review of reverse mortgages.

In Part I, We defined the reverse mortgage, and agreed with many experts who state, “Home Equity Conversion Mortgages (HECMs), commonly known as reverse mortgages, enable older Americans to access some of the equity they have built up in their homes.  Eligible homeowners can use a HECM loan to eliminate the burden of monthly mortgage payments…” We also re-defined the original purpose of the reverse mortgage, and took issue with mortgage sellers who encouraged borrowers to use it in lump sum form for a trip around the world or a brand new sports car.

In Part I. we explained some of the reasons the reverse mortgage received a bad reputation in previous years, but new laws have brought better understanding and protection to this financial option often sought by seniors.

Today’s part of this topic concerns some of the requirements for attaining a reverse mortgage.

Perhaps you have used a reverse mortgage formula to calculate how a reverse Mortgage would affect your financial picture, and you have decided it might be a good option for you.

Most Difficult Requirements In A Nutshell:

Below you will find a listing of all the financial qualifications that will be investigated before your application process is complete:Palm State Mortgage Company can help you see equity as a nest egg.  reviews Reverse Mortgages.

1) Lenders will want to know if you paid your real estate taxes, and paid them on time. If you have been a previous homeowner, they will also check to see if you paid homeowner association fees and other property-related charges like insurance on time.  To qualify, you will need have done so for at least the past 24 consecutive months.

2) If you are still working, regardless of your age, you must provide documentation of employment status.

3) You must be 62 years old at least, but if you have not retired, you must provide paperwork that supports your income.  Likewise you will need to create a list of your financial assets.

4) Take a look at the family budget.  Create an Analysis that examines your monthly expenses and your cash flow.

About the New Laws:

Palm State Mortgage believes that the implementation of a detailed financial assessment might close the door on reverse mortgages for hundreds of Florida would-be homeowners.  Remember that there are other options.

In fact, you can visit this reliable Palm State article concerning other options. One of the alternatives to a reverse mortgage might be more appropriate for you than the Reverse Mortgage.

Another reason that reverse mortgages gained a bad reputation was the spouse of the homeowner might lose their home when the owner passed away.

“One of the biggest complaints comes from the fact that many widows and widowers have lost the homes after their spouses passed away.”

You can read more about this at this reliable online resource. Palm State helps you see options such as Reverse Mortgages and Refinancing.

Reverse mortgage lenders have an option called “mortgagee optional election (MOE) assignment” that lets them transfer ownership of the reverse mortgage to HUD.  The lender will file a claim with HUD to recoup the sum it would have gotten by selling the house.

Now, when a spouse dies and he or she has had ownership of the home, and a reverse mortgage,  the lender can transfer the mortgage to HUD.  To make a complex idea simple, “Transferring the mortgage creates what HUD calls a “deferral period” that allows an eligible, surviving spouse to remain in the home as long as he or she continues to meet the basic requirements of the reverse mortgage, such as keeping property taxes current, keeping up homeowners’ insurance payments and maintaining the property in good repair.”

It is understood that “the spouse must be a legal owner of the home and continue to occupy it as his or her primary residence.  He or she also must have been legally married to the borrowing spouse at the time the loan closed and have remained married until the borrowing spouse’s death.”

The new changes in laws regarding reverse mortgage borrowers will probably make the process much safer for reverse mortgage borrowers, while at the same time seeing to it that reverse mortgage obligations are upheld by the borrowers.

We agree with experts who say that “A Home Equity Conversion Mortgage (HECM) could be a key component to your retirement planning, providing funds now and income for the future—but it’s not the right choice for everyone.  We want you to understand the advantages and disadvantages to help you determine if a HECM is right for you.”

In summary, we personally invite you to call Palm State Mortgage Company to investigate the type of loan that is best for you!  We can help you review all your options, and we can find you the best lender for your situation.