Reverse Mortgage Info with Gary W Smith

Current Loan Limits Extended

2011-08-19T21:23:00.000-07:00

HUD has decided to extend the current loan limits of $625500 through the end of 2011. There had been talk about reducing the loan limits for HECM transactions to $417000. This would have resulted in hundreds if not thousands of seniors being forced to accept lower princible benefit calculations on their reverse mortgage loans. With rates low and a few months of the higher loan limits, now is a great time to consider your options for a reverse mortgage. Visit http://www.washingtonreverse.com/ for your free reverse mortgage analysis, list of HUD approved counselors, and many reverse mortgage consumer booklets.

Aberdeen Reverse Mortgages

2011-07-14T06:29:00.000-07:00

A new link for seniors in the Aberdeen, Hoquim, Westport, and Grays Harbor County area:
Aberdeen Reverse Mortgages: First Priority Financial (800) 710-9502

County Limits May Effect Your Loan

2011-07-13T14:51:00.000-07:00

The next go around with the HUD County Loan Limits is reportedly going to see a decrease in many counties throughout the U.S. and this will effect the reverse mortgage principle limit. Your reverse mortgage is based upon your home value and your age but in some cases, it is also effected by the HUD limit for the county the home sits in. For instance, currently in Pierce County and King County WA, the HUD limits are $625,000. This means that even if you have a million dollar home, your reverse mortgage loan basis will be set based upon the county loan limit and then your age plugged into the calculation. A lowering of the county limits will lower the amount of your loan.
If you are considering a reverse mortgage, now is a great time to consider your options and have your benefit at current maximums instead of seeing that lower amount.

Free Counseling Leaving Soon

2011-07-13T14:45:00.000-07:00

With all of the talk about trimming the economy, there are a few items that will effect seniors looking for reverse mortgages. The cost of HECM Reverse Mortgage Counseling is typically going for about $125 right now but many counselors have been providing this service free of charge since the government has been subsidizing this. A recent report indicated that the money for this subsidy is running out and will be gone by October 1.
If you are thinking about a reverse, moving forward now may be a good bet since there are currently several counseling locations offering it for free. More money in your pocket.

Important Tips for a Successful Reverse Purchase

2011-06-18T15:21:00.000-07:00

Generally, there is no qualifying for a reverse mortgage like there is on a forward mortgage. It does not matter what the credit is like or the amount of assets. However, when using a reverse mortgage to buy a home there can be a couple of conditions that are needed to be addressed should you want to retain an existing home instead of selling it.
Assets needed to close the loan will need to be verified. These funds still need to be sourced and a clear picture of where the funds came from will need to be established through a paper trail of bank or investment statements.
If your existing home is going to be rented out now and retained, the underwriter will also need to see that there is enough income to make that mortgage payment if there is one. This is a key underwriting condition that some loan officers overlook and it could present problems if not addressed.

New Year Bringing Changes and Higher Rates

2010-12-21T10:53:00.000-08:00

Rates are on the rise as we head into a new year. For the last couple of weeks we have seen both forward and reverse mortgages swing upward. No longer are analysts talking about lower rates. The push is for an improved economy and that can only be accomplished if companies are getting more profits (that's more interest, for those with mortgages).
Overall, rates are still historically low and now is a great time to check on what is available for your own personal situation. Whether a reverse mortgage will benefit you or not all starts with getting an free analysis from a good reverse mortgage originator.
More changes are coming next year and I will keep you informed as we move ahead.

More Lenders Offering HECM Purchase Loans

2010-04-10T20:01:00.000-07:00

Although there was a slow start to lenders offering the ability to purchase a home using a reverse mortgage, the industry is now coming on board with the idea of offering this unique loan program. Many seniors thinking of making a housing change and not wanting a mortgage have previously only been able to buy using the cash they had on hand or had within the equity of the home they were selling.
A HECM purchase loan allows a home buyer to buy a home with no mortgage payment. The money used for down payment is matched with the available reverse mortgage benefit allowing for either an ability to not use all your money or use all your money and buy more home. Check out WashingtonReverse.com for details on this great home buying loan program.

New Pamphlets Issued

2010-03-19T15:27:00.000-07:00

Updates for many of the reverse mortgage handbooks and guides for information have now been published and are available. These publications are designed to more easily explain how a reverse mortgage can benefit the senior home owner:
Reverse Mortgage Loans - Borrowing Against Your Home (An AARP Publication)
Just the FAQs: Answers to Common Questions About Reverse Mortgages (A NRMLA Publication)
The NRMLA Guide to Aging in Place (A NRMLA Publication)
All of these publications should be read before you go to or call for your counseling session. Locations for counseling can be obtained be visiting http://www.washingtonreverse.com/ and clicking on "Counseling".

WARNING: 2010 Census Cautions from the Better Business Bureau

2009-11-24T23:44:00.000-08:00

Be Cautious About Giving Info to Census Workers

With the U.S. Census process beginning, the Better Business Bureau (BBB) advises people to be cooperative, but cautious, so as not to become a victim of fraud or identity theft . The first phase of the 2010 U.S. Census is under way as workers have begun verifying the addresses of households across the country. Eventually, more than 140,000 U.S. Census workers will count every person in the United States and will gather information about every person living at each address including name, age, gender, race, and other relevant data.
The big question is - how do you tell the difference between a U.S. Census worker and a con artist? BBB offers the following advice:

**If a U.S. Census worker knocks on your door, they will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice . Ask to see their identification and their badge before answering their questions. However, you should never invite anyone you don't know into your home.

** Census workers are currently only knocking on doors to verify address information. Do not give your Social Security number, credit card or banking information to anyone, even if they claim they need it for the U.S. Census.

While the Census Bureau might ask for basic financial information, such as a salary range, the Census Bureau will not ask for Social Security, bank account, or credit card numbers nor will employees solicit donations.

Eventually, Census workers may contact you by telephone, mail, or in person at home. However, the Census Bureau will not contact you by Email, so be on the lookout for Email scams impersonating the Census..

Never click on a link or open any attachments in an Email that are supposedly from the U.S. Census Bureau.

For more advice on avoiding identity theft and fraud, visit http://www.bbb.org/ .

SHARE THIS INFO WITH FAMILY AND FRIENDS..

HUD Gets Ready to Axe Benefit Amount

2009-09-23T17:17:00.000-07:00

Just when seniors have seen equity pour out of their homes through reduced values, HUD in all their wisdom decides to reduce the principle benefit amount by approximately 10% for all new transactions after Oct. 1st.
This information just came across our desk about 3pm. As it stands now, I am advising anyone thinking of doing a reverse mortgage to get started on their application. Of course, your senior counseling will have to be completed first.
This is a true shock to lenders and analysts are predicting that it will adversly affect about 21% of seniors doing reverse mortgages by having them possible have to bring additional money to the closing table just to pay off their existing mortgage.
My advise = contact your Senators and U.S. Representatives and sound off! I will post details as I get them.

Buy a Home Using a Reverse Mortgage

2009-09-23T16:09:00.000-07:00

If you are planning on buying a new home, HUD has now introduced a Reverse Purchase mortgage. This HECM loan provides a maximum benefit based upon age and sales price and delivers a reverse mortgage with no monthly payments. Here is an example:

You plan on selling your home and want to downsize - The sale of your existing home is going to net you about $180000. You had planned to use this all to buy your new $180000 home. You are 72 years old. Instead of paying all cash, you find out your maximum benefit for a Reverse Purchase is about $88700. You put down $91300 and keep the $88700 working for you in other investments. No monthly payments!
You want to buy a second home to use as a vacation home. You use a normal reverse mortgage on your existing residence and with the lump-sum of equity you get, you go and pay cash for your vacation home.
Things have changed in your life and you need to up-size your home because it is too samll to accomodate the live-in help you want to have. You use the proceeds from the sale of your home; let's say that same $180000 as in example #1, and you use it all and add a reverse mortgage to it to come up with the ability to buy a $360000 home with still no monthly payment! Your reverse benefit allowed you to put the $180000 down and have a Reverse Purchase mortgage for the remainder.

The above examples were all estimates using the age of 72 and existing HECM interest rates. As each age is different and rates change, you need to find out what you purchase abilities would be by getting a maximum prinicple benefit analysis so that you can determine how this program will help you. Visit http://www.Reverse4HomeBuying.com for details.

Rethinking Your IRA Distribution

2009-02-13T23:28:00.000-08:00

The start of this year presents a perfect time to review and possibly begin to rebuild your retirement account. Having to take a mandatory distribution means cutting into your already decimated IRA values.

In an effort to prevent having to sell stocks in your IRA to take your yearly distribution, there is now new legislation which suspends the 2009 requires distribution from your qualified plans. At age 70 1/2, you normally have to begin to withdraw from your account. This taxable event also applies to Inherited IRA Beneficiaries regardless of age.

Congress has made the decision to waive this required "pull-out" for 2009 to give seniors the opportunity to not have to sell investments during this down market. A chance to rebuild some of their assets.

But what if you need the money to live on. If you have not already educated yourself about reverse mortgages, now may be the time to do so. A reverse mortgage could provide needed income during this time, giving you an opportunity to not have to pull monies from your retirement accounts. Of course, the key to good planning is to stay informed and educated about what is available to you.

Check with your financial adviser about the new legislation and how it could help and learn about the potential benefits of a reverse mortgage. You can get a lot of information at WashingtonReverse.com and you can even find out your maximum reverse mortgage benefits using their calculators.

NEW LOAN LIMITS

2008-11-01T18:12:00.000-07:00

IT IS OFFICIAL!! HUD is preparing and has announced that the new maximum mortgage limit for reverse mortgages will be raised to $417,000 nationwide. This new figure will go into effect as soon as HUD publishes the new Mortgagee Letter, coming sometime hopefully around November 1. Previous HECM reverse mortgages were limited by the maximum mortgage limit for the county the house was located in which varied by county throughout the nation. This new nationwide limit will raise the maximum amount seniors will be able to receive in most parts of the country. We will advise you as soon as we know of the actual date for activation.

New Washington Law Affects Reverse Mortgage Choices

2008-11-01T18:01:00.000-07:00

On June 12th, Gov. Gregoire signed a new Bill which greatly reduced the ability of several fine lenders offering reverse mortgages to work within the State of Washington. In an effort to protect citizens from mortgage companies previously exempt from licensing under the Mortgage Brokers Practices Act since they were Mortgage Bankers, not Brokers, all those exempt had to be licensed under the Consumer Loan Act. Good intentions, but in doing so, the newly licensed companies found that State Law regarding the Act prohibited them from doing certain types of mortgages, like reverses. Even though the State was made aware of this mistake, (acknowledged it as an error), they decided to take no action until sometime next year when the legislators come back into session and agree to address it.
What seniors are now left with, is a few lenders that have banking operations in the State and a few brokers that may or may not have the best interest of seniors in mind. Those brokers offering reverse mortgages are limited in their choice of lenders since several of the reverse mortgage lenders have decided not to get licensed under that act and have pulled out of lending in Washington. A further check that I did resulted in finding that certain banks offering the reverse mortgage product were charging the maximum allowable fees in regards to the origination fee and the monthly servicing fee. (Less competition = Less reason to discount fees).

I would encourage all seniors to write to their various representatives, senators, and the governor and demand that the licensing be restructured in a way that allows the lenders that were previously offering reverse mortgages to once again be allowed to offer them. It will benefit seniors in having greater loan choices.

Welcome to Our Blog

2008-11-01T17:41:00.000-07:00

I want to welcome you to this blog. I will make every effort to provide useful and informative, and up-to-date content to give you a reason to return again and again.

I have watched the birth, childhood, and now into the teenage years of this Reverse Mortgage product. When first introduced, everyone wondered just how this loan was going to work. The general consensus among seniors was that it was going to be a way for banks to take their homes away. Some greedy loan officers preyed on unsuspecting seniors and this loan got a black eye very quickly. In the early 90's, I stayed away from offering this loan merely because I did not want to be labeled as "one of those" shady loan officers.

Since then, this loan has gone through a lot of growing up and with the help of a lot of good government protection in the form of regulations, the FHA HECM Reverse Mortgage is now a very viable loan product that every senior should, at least, educate themselves on.