Reverse mortgage

Home and Real Estate
1

I’m looking for an honest decent good reverse mortgage lender. Does anyone know one?

I totally understand the downsides of reverse mortgages, high upfront fees and costs, and she will not be house leaving it to someone since there’s virtually nobody left in her family to benefit from inheritance, but here’s the situation…

I know of an elderly woman who needs home healthcare but can’t continue to pay for it on her income. She does have a lot of equity in her house and for her to have care in her house during her last time here is better than putting her in a nursing home or hospice facility.

Thank you in advance for any constructive recommendations.

2

Any way to consider selling the house and moving to assisted living? Home health care is not as expensive, of course, but if she’s house-rich and cash-poor you don’t lose as much equity by doing a normal sale of the property and then withdrawing funds as needed from the proceeds to pay for her next phase of life.

Here’s a perspective from AI:

To find a reverse mortgage broker, here are several effective approaches:

Start with HUD-approved counselors The U.S. Department of Housing and Urban Development (HUD) requires reverse mortgage counseling before you can proceed. These HUD-approved counselors can often provide referrals to reputable brokers and lenders in your area.

Research licensed mortgage brokers Look for brokers who are specifically licensed to handle reverse mortgages in your state. You can verify their credentials through your state’s mortgage licensing database or the Nationwide Multistate Licensing System (NMLS).

Get referrals from trusted sources Ask your financial advisor, estate planning attorney, or accountant for recommendations. They often work with reverse mortgage professionals and can suggest reputable brokers.

Contact multiple lenders directly Many banks and credit unions offer reverse mortgages through their own loan officers rather than brokers. Consider reaching out to several institutions to compare options.

Use professional associations The National Reverse Mortgage Lenders Association (NRMLA) has a directory of member companies that you can search by location.

Interview potential brokers carefully When evaluating brokers, ask about their experience with reverse mortgages specifically, their fees, and request references from recent clients. Make sure they explain all costs upfront and don’t pressure you to proceed quickly.

Red flags to avoid Be wary of brokers who contact you unsolicited, promise unrealistic terms, or pressure you to use the loan proceeds for investments or insurance products.

Remember that reverse mortgages are complex financial products with significant long-term implications, so take time to understand all terms and consider how they fit into your overall retirement planning.

3

The owner and all of us neighbors would love to see her stay in the home for as long as she can…

A recent report ( Map Shows the Best and Worst States for Senior Care - Newsweek ) places Georgia the worst for senior healthcare and I have been in many facilities - only to be disappointed in their lack of proper staffing and care…

So I think a reverse mortgage is a good last ditch effort to pull equity for hospice nursing care in home…especially if nobody will really benefit from leaving the home to anyone as inheritance.

Besides, a house can still be sold and reverse mortgage paid off (yes, loan value does increase over time and with these rates - quickly) with remainder as inheritance. I know of one other person who has one and the reverse loan balance from almost 10 years ago is still less than home value.

My guess is about 3-6% of roughly 50% of equity would be eligilble to pull out would be closing costs for her age…

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4

Other options include a home equity loan and deeding the home to a company on death for an upfront payment now. I’d look at these two other options in addition to a reverse mortgage to determine which product works best for her.

5

The reverse mortgage (HECM) is a tool… it’s not a solution. If there is not enough cash in the budget when its all said and done to keep up the property, pay HOA fees, pay taxes… they’ll lose the house to the lender! The HECM lender has the right to foreclose to protect their interest in the property.

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6

All good points…taxes are low and property is in good shape…pulling $150k+ from house value at her age will give her plenty of cushion for care until she has to go to nursing care or hospice off site.

7

my mom “decided” to get a reverse mortgage. If I could find the SOB that pressured her into it, I’d kick him in the head until I was satisfied. They are THIEVES.

If she can handle the thought process, I would toss the home into a trust so the assets are off the books. She needs to contact an attorney (I know, good luck) and gather any family left or close friends that are not invested in the estate. Limit your discussion with lawyers, they are thieves as well.

9

I have no children and am not interested in leaving my paid off home to anyone else (Die with zero). Does it make sense to use a reverse mortgage to pay the annual property taxes (which are significant in Texas) as a way to use up the equity in the home?

10

I know of two situations that worked out with well for them in reverse mortgage…one died and’s the other is still living …however interest rates will limit her equity pull…but her she 85+ will push equity pull higher …my rough estimate is for her to survive 2-3 more years on equity do she can save her social security income for that time…

11

You’d do better to take out a HELOC, and use it to pay property taxes and maintenance costs. Much better interest rates. You’d still have to make payments, but minimum payments is probably a much better option, and likely to allow you more long term funding. Either transfer the home to them in your will, or have your executor sell the house, and pay off the loan. Donate any remaining proceeds to a charity you choose.

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12

If you own your house free and clear, and you’re over 65, you can sometimes (depending on the state), defer all property tax payments. In Texas, the payments are deferred at a low, fixed 5% interest rate until you no longer live in the home. The taxing authorities are not allowed to foreclose on you. But you must file the right form… you don’t just decide to not pay your taxes one day.

This all amounts to a no-cost, no-fee, low-interest, fixed-rate, non-recourse (no foreclosure) home equity line of credit. I actually am planning to do this, to mildly lever-up my portfolio if the stock market takes a severe tumble, like -50% or worse. It would be epic dip-buying like March 2009. Stock market returns are very uncertain always, but buying when others are fearful always gains much more than 5% averaged over a few years (2009 low to 36 months later… S&P500 up 19%).

13

CAll John Reardon at 904.982.2210. Great guy, honest, no bull, not pushy. Tell him Beat Stauble sent you.

15

Please speak to your friend’s doctor and her medical insurance provider. Many hospital systems, medical groups, and counties offer home health care, especially if she needs home hospice. They often provide the services of someone who will coordinate the care. Also try internet searches in your area. It might take a lot of phone calls, but speaking from personal experience, many nursing homes are a nightmare. Good luck.

16

For a person in her situation, a reverse mortgage can be a kind solution - costs aside, if she wants to turn home equity into care funds without selling the home.

You’ll just need a HUD-approved lender that will take the time to walk through the details. Mutual of Omaha and Fairway usually provide good service in these situations.

If you want to see how large lenders vary in fees and borrower satisfaction, this comparison list gives an easy overview reverse.mortgage/best-reverse-mortgage-lenders.

17

I can get a small but free (no fees) reverse mortgage here in Texas, at a very attractive interest rate, with guaranteed acceptance, single page application and probably most over 65 can get it in other State.

Texas Comptroller of Public Accounts Form 50-126

It’s called property tax deferral. My taxes are high, $12k per year. If and when I pay my house off, I can defer the taxes at 5% fixed until I no longer own the property as my primary residence. So the “cash back” from the “reverse mortgage” is given out ever year in the amount of the property tax I’m NOT paying.

I think I have to be careful not to defer more than the property is worth, though. But if I keep living there until I die, and the house can’t pay for the taxes and interest after I die, the local governments eat the loss… they have to. They can’t come after my kids for my taxes. They can probably become a debtor and line up in probate. But I won’t care.

18

You might consider trying to find a buyer who would agree to grant your elderly friend a life estate in the house. As a life tenant she could remain in the house rent-free until she passed.