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Reverse Mortgage Lender

Brian Hinton

Reverse Mortgage Planner

NMLS #260075

(720) 702-4619
Fit Lending, NMLS#: 2063082

Reverse Mortgage Services

Thank you for visiting my website which is dedicated to helping you explore whether a reverse mortgage can be a good fit for you and your family. As a tenured licensed reverse mortgage loan officer, I understand that looking into a reverse mortgage can sometimes be overwhelming and confusing. That's why you need a reverse mortgage professional who can break down the information in a way that makes sense and gives you confidence in your decision. Every senior homeowner has their own unique situation and our team takes pride in helping you use the reverse mortgage to fit your specific needs.

Home Equity is an underutilized asset that many senior homeowners can benefit from using as part of their overall financial plan. A reverse mortgage is one tool to help you do just that. In fact, I work with many other professionals, including Attorneys, Financial Planners, Accountants, Contractors, and In Home Care Providers. We are often able to help their clients use a reverse mortgage to better their situation in retirement. A reverse mortgage is not always the right financial tool for someone, but when it is the right tool it can be quite transformational and life-changing.

What is a reverse mortgage?

A reverse mortgage is an FHA government-insured mortgage loan program for homeowners age 62 and up. It works by allowing senior homeowners to borrow a portion of their equity with no monthly mortgage payments. The money received is non-taxable and can be used as the borrower wishes. Borrowers remain the owners of their home just like a conventional or traditional mortgage.

A reverse mortgage is a great tool for those looking to supplement their income in retirement. Many use it for home repairs, paying off an existing mortgage, daily expenses, grandchildren, and for an accessible nest egg that they don't currently have. Money from the reverse mortgage can be taken in a lump sum, monthly payments, or in a credit line.

Should the urgent need arise, how would someone get out of a reverse mortgage?

Sometimes life situations change, like receiving an inheritance or wanting to move closer to adult children. Paying off a reverse mortgage might make sense in these situations. A reverse mortgage borrower can pay off a reverse mortgage at any time, just like a conventional mortgage. There are no prepayment penalties with a reverse mortgage. You can pay the lender directly or you can sell your home and the loan will be paid off through escrow. All equity in the home is yours.

When considering a reverse mortgage, it is important to take a look at your future plans. What are your plans for the upcoming years and do you see yourself living in this home long term? If you plan on moving in the next few years then it might be better to hold off on getting a reverse mortgage until you are in your new home. You can even consider purchasing a new home with a reverse mortgage by using a Reverse Mortgage For Purchase.

On average, how much money does someone get from a reverse mortgage?

How much money you get from a reverse mortgage depends on a few factors. It is based on your age, your home's value, and the interest rate. Based on the age of the youngest borrower and today's interest rates, the FHA determines a percentage of your home's value that you can borrow via a reverse mortgage. This percentage increases as age go higher and rates go lower. The interest rate has the most significant impact on how much you can borrow, so if you can, take advantage of an economy with lower interest rates.

Typically a homeowner, age 62, will qualify for a reverse mortgage loan of around 50 percent of their home's value.

As of 1/1/2021 FHA's reverse mortgage (HECM) lending limit is $822,375. Proceeds calculations use the lending limit or the value of your home, whichever is lower. A jumbo reverse mortgage can be considered for home values above the lending limit.

Who can qualify for a reverse mortgage?

There are some requirements to qualify for a reverse mortgage.

  • Borrowers must be age 62 or above. If married, at least one spouse must be age 62 or above.
  • The home must be your primary residence.
  • You also must have enough equity in your home to qualify. For example, if you qualify for a 200K reverse mortgage, but you owe 300K on your existing mortgage then you wouldn't qualify to pay off your existing mortgage with a reverse mortgage.
  • Additionally, your home must pass an FHA appraisal, and sometimes repairs are needed before the closing of your loan.
  • FHA also requires reverse mortgage lenders to perform a financial assessment to determine if it is a sustainable option. A minimum amount of residual income is required so basic costs of living can be covered.

How much equity do I need to get a reverse mortgage?

The equity you need to get a reverse mortgage depends on your age, the interest rate offered, and your home's value.

Typically a person, age 62, will need to have home equity between 50 and 60 percent. A person, age 90, will typically need to have home equity between 30 and 40 percent. This is subject to change due to the economy and changes made by the FHA.

What types of properties qualify for a reverse mortgage?

  • Different types of properties can qualify for a reverse mortgage. The home must be your primary residence.
  • Single-family homes qualify for reverse mortgage loans.
  • Multifamily homes up to four units qualify for reverse mortgage loans. Some reverse mortgage borrowers live in one unit and rent the others out. This is completely allowed and can be a great way to increase your income.
  • Townhouses and Planned Unit Developments or PUDs are eligible for reverse mortgages.
  • Condominiums or Condos are also eligible but must meet certain requirements by FHA. FHA is now allowing spot condo approval in certain instances.
  • Manufactured homes are eligible for reverse mortgages if they meet certain requirements by FHA.

What happens to my reverse mortgage when I die?

FHA has protections in place in the event a reverse mortgage borrower dies. These protections are guaranteed by the FHA mortgage insurance on the loan. When the last surviving borrower passes away the heirs or beneficiaries will be given 6 months handle affairs before the reverse mortgage balance must be paid back. An additional two 3 month extensions can be given to the heirs.  Unlike a traditional loan, no mortgage payments are required during this time. No other mortgage gives this type of protection and assurance to the heirs of a mortgage borrower.

If the heirs want to keep the home they can pay off the balance with cash or by refinancing the home.

Most heirs sell the home and the remaining equity in the home goes to them. The mortgage lender only collects what is owed on the loan.

If for some reason the loan balance was higher than the value of the home then the heirs can walk away from the home without recourse or penalty. This is guaranteed by the FHA mortgage insurance. Also, in this situation the FHA mortgage insurance also allows heirs to purchase the home at 95% of the appraised value.

 


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