National One Mortgage Corp. – Your Reverse Mortgage Specialists
Is a Reverse Mortgage the Best Loan for You?
Welcome to the National One Mortgage website dedicated
to the California Reverse Mortgage
Benefits of a
Reverse Mortgage:
- No Mortgage Payments; you still pay property taxes and Home insurance
- You still own and live in the house
- Get Cash in a lump sum or payments
- Generally does not affect social security
Common
Myths:
- The Bank Owns your Home
- Reverse Loans are expensice
- Liable for balance above appraised value
- Hard to qualify for
Easy to
Qalify: 62+
- Your Home is Your Primary Residence
- Youngest Homeowner is 62 or older
- You own you Home
Our mission is to set the highest standard in the Reverse Mortgage industry. We are committed to quality customer service and putting the needs of the people we serve first. We will always adhere to the highest degree of integrity in all of our business dealings.When it comes to Reverse Mortgages, Education is the key. Our pledge to you, is to complete the education process, so you are able to make an informed decision. We always encourage prospective clients to invite family members to be a part of the discussion with us during the education process.
What is a reverse mortgage & how does it work?
In its most basic sense, a Reverse Mortgage is any loan secured by a home where repayment is deferred to a later date. Generally, a Reverse Mortgage is paid back when the home sells is refinanced or paid off in the future.
The word “REVERSE” is used for two primary reasons:
- The flow of money generally moves or flows in reverse:
Funds on traditional mortgages move FROM a borrower’s bank account TO a lender or servicer. Reverse mortgages however, have the ability to move funds in a lump sum, or in a monthly payment, FROM a lender back TO the borrower. - Loan balances tend to move in reverse.
Traditional mortgages require monthly principle and interest payments
This decreases the loan balance. Not requiring loan payments on a Reverse Mortgage may cause the loan balance to increase instead.
Traditional mortgages require monthly principle and interest payments
This decreases the loan balance. Not requiring loan payments on a Reverse Mortgage may cause the loan balance to increase instead.
Since the flow of money generally moves in reverse, and the loan balances tend to move in reverse, it is obvious why this type of loan is called a Reverse Mortgage.
What really is a Reverse Mortgage? It’s a US government insured program that is only available to people 62 and older. You must own your home and have substantial equity in the house. The program was created by the lobbying efforts of AARP. Here’s a simple explanation of how it works.
The program allows seniors to borrow money today against their home, and pay it back after they die or move out permanently. So no monthly mortgage payments and you still own your home. As to how much you get, it ranges from 50% – 60% of the appraised value of your home.
The older you are, the more you get. The loan is paid back when one of three things happens. 1. You sell the house. 2. You permanently move out of the house. An example would be to go live with your kids or to move into a nursing home. You are considered to be permanently out of the house if you vacate the house for over 12 consecutive months. Once that happens, the loan is due and payable and you have approximately 12 months to repay the loan. 3. Last surviving spouse dies. If one spouse dies, the loan is not due. But when the last surviving spouse dies, then the loan is due.
You can do a reverse mortgage if you already have a mortgage on your house or if you own your house free and clear. But if you have a mortgage on it, it gets paid off as part of the reverse mortgage transaction. You don’t have any mortgage payments with a reverse mortgage. Nevertheless, you do have to show that you can pay your property taxes in the future and keep homeowners insurance on the property. Also, you have to be 62 or older, and you have to live in the home. That’s really it. And it’s assumed that you will keep up your house to a reasonable standard.
It’s safe
In this world we live in today, often times we don’t know what’s safe and what isn’t; what is a scam and what isn’t. A reverse mortgage is safe. It was created by the lobbying efforts of AARP, and it’s a US government insured program. Irrespective of what you think about AARP or the US government, they certainly aren’t advocating scam programs. So the bottom line is reverse mortgages are safe.
With a reverse mortgage, you get money today and it’s paid back when you die, sell or leave the house permanently. There are no monthly mortgage payments. So what about the interest on the loan? Since there are no mortgage payments, that interest is not getting paid each month, like on a regular mortgage. Rather, it’s accruing and adding to the balance of the loan.
When you die, sell or permanently leave the house, the loan is due and payable. The heirs can either sale the home and the loan is paid at that time and what equity is left they keep, or they can pay off the loan and keep it. To clarify what is repaid in total when the loan is due and payable, it’s a combination of three things. It’s the amount of money originally received. Secondly, it’s the closing costs incurred when you took out the loan. And it’s the interest on the loan, along with the FHA monthly mortgage insurance premium.
You may want to avoid a reverse mortgage if you don’t plan on living in your home long term. There is no requirement that you must live in the house a certain number of years, but the economic reality is there are closing cost associated with a reverse mortgage. It wouldn’t make money since if you are going to live in the house less than four years after taking out a reverse mortgage. A reverse mortgage is designed for people who intend to stay in their house long-term, typically over four years. That was the concept behind the loan when AARP lobbied Congress to create the reverse mortgage program
Will the Reverse Mortgage Stick My Heirs with a Bill?
No. Fortunately, this is where FHA insurance kicks in. Reverse Mortgages are non-recourse, meaning that the homeowners, and their heirs, have no obligation to pay for any deficiency caused by the home being worth less than the loan balance.
Generally, the heirs will sell the home when the last surviving borrower passes away.
The Reverse Mortgage balance is paid off at closing just like any other lien, and the remainder would be a form of inheritance for them.
However, if the home is worth less than the loan balance, the deficiency is paid through the Mutual Mortgage Insurance Fund so that the lender, investor, borrower, and the borrower’s heirs are not stuck with a bill.
5 BIGGEST MISTAKES WHEN GETTING A REVERSE MORTGAGE
#1: A report by Consumers Union and other advocacy groups found that seniors are being sold reverse mortgages when the product is not their best option, and cross-sold other financial products as well.
Cross-selling can be described as encouraging borrowers to use reverse mortgage funds to purchase insurance or other products that may not be in the borrower’s best interest, and are potentially unsuitable given the borrower’s personal financial circumstance. It can’t hurt to have a trusted relative, friend or financial advisor go over your paperwork before you commit to anything.
#2 Waiting: While there are some mistakes you can make in getting a reverse mortgage, one stands out among the worst: that is deciding to wait until you are older and have greater financial needs before setting up a reverse mortgage. I’ve heard it all too often, “We can manage a few more years before the money runs out. Then we will call you.”
Now, don’t get me wrong, this is different from simply deciding it is the wrong step; that can be a valid conclusion for many reasons. But to put off until later, even though it is readily apparent that you are at risk of out-living your money, is often a tragic error.
Too many people wait until later, only to find what would have worked before won’t work anymore. While it is prudent not to rush into such an important financial step, but simply delaying the decision because you don’t want to face the facts rarely pays positive dividends. Rates, programs, and home values can change. Also, and just as importantly, your circumstances can change.
#3: Assuming your condo qualifies for a reverse mortgage:
Many seniors own condo units — these seniors don’t necessarily qualify for reverse mortgages. Condos must meet tighter FHA restrictions than single-family homes. Also, condo developments as a whole can be disqualified from reverse mortgages if a high number of condo owners are delinquent on association fees or if the condos have insufficient reserve funds. Other FHA requirements address insurance and the number of investor-owned units.
#4 Rushing:A reverse mortgage is a big financial decision, and homeowners sometimes sign for a loan before all of their questions have been answered. It’s much better for an owner to take the time to find out everything she wants to know before committing to the loan.
#5 Don’t take more money than you need: With a reverse mortgage, you have an option as to how much you can take of the total proceeds that you are entitled to. Here’s the thing I would like you to understand: Take only what you need. If you take more than you need and put it in the bank, the interest it will draw will be less that n the interest that is accruing on the loan..
HECM funds can be used for any purpose you choose:
Buy a second home
When you can use cash from the proceeds of the reverse mortgage to pay for the second home, you don’t have to worry about mortgage payments any longer and if you want, you can draw income from it when you’re not using it. That property will even appreciate and give you more to benefit from in the future.
Early retirement
Many older Americans have $100,000 and $125,000 in retirement income and that’s not enough to live on once they stop working. Eliminating your mortgage payment at 62 — even if you owed another 10 to 15 years on your home — is going to jumpstart any additional retirement savings. If you work until you’re 70 (as many people are choosing to do these days), that results is the best of both worlds. You get to keep your house, eliminate your mortgage payment and take that money to build your retirement savings that can last 10 to 20 years after you stop working. If you have plenty in savings, you can stop working 10 years earlier because you planned.
Start a business
By using the reverse mortgage as a business loan to yourself, you don’t have to pay that loan back, so your cost of capital is lower than the competition down the street. Potentially, you can be cheaper than your competition.
Travel
For some older Americans who have enough money stashed away for their retirement needs, they may choose a reverse mortgage to travel to places they’ve never been or address other wants on their bucket list.
Some more reasons to get a Reverse Mortgage
1. Make home improvements and needed safety repairs.
2. Purchase health and home services.
3. Pay off debt.
4. Have extra money. money.
5. You retain title to your home, not the bank.
Peace of mind
Peace of mind is one universal pursuit most of us strive to achieve every day. The ability to not have to worry and have contingencies in place. The reverse mortgage is such a realistic vehicle for a lot of people.
It’s a line of credit that grows over time and is always available to you when you need it. You may not need it, but it’s there if something happens.
The reverse mortgage is a line of credit you can leverage when other unexpected financial hardships occur. It may only be a car engine blowing up or is damaged in some way and you need a new car.
The peace of mind could simply be downsizing or paying for many years in an assisted living facility. Many people aren’t prepared for elderly care.
Not everyone understands what a reverse mortgage actually is and there is a lot of misinformation out there, even in otherwise reputable and reliable media sources. Some think the name means you have to give your house back. You don’t.
Yes, a HECM can give you peace of mind.
What are the Eligibly Requirements?
There are borrower and property eligibility requirements that must be met. The following items are the key items for eligibility, though lender guidelines may vary slightly.
AGE
Those interested in a Reverse mortage must have an age of 62 years or older. A spouse may be younger, but the main borrower must be 62 or older.
HOMEOWNERSHIP
Reverse mortgage borrowers must own their own home.
CREDIT
Borrowers must have acceptable credit. While Reverse mortgages do not use use credit scores, a borrower should have no lates in the past 24 months.
INCOME
Borrowers will need to provide documentation to show satisfactory income to maintain property taxes,home insurance, credit card and installment debt and have some residual income left over.
What is a
Reverse Mortgage?
A reverse mortgage is a loan available to seniors over the age of 62 which allows them to convert equity in their home into cash. Simply fill out this quick form and see if a Reverse Mortgage is right for you.
Why choose National One Mortgage Corp.?
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This is our third time working with Jeff Maas and we couldn’t be happier. He is very professional yet friendly and never pushy! We would definitely do business with him... read more
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