Common Questions

Is the Reverse Mortgage process different?
Make sure you have a good educator
Be careful when doing your due diligence - there's lots of information out there so work with some you trust who can help you sort through what's " true" and what "is not". You want to get the "WHOLE" picture so you can make an informaed decision from that position.
The AARP Foundation Reverse Mortgage Education Project includes a national network of reverse mortgage counselors to help seniors
Do NOT allow AAARP to push you in the direction of any patrticular lender.
HUD and state regulations require reverse mortgage borrowers receive hud approved reverve mortgage counseling. And while this counseling is mandatory for HECM , the cost has been maintained at a minimum of $150. You choose the counselor from a list provided and you can see them in person or do the session by phone.
Ten days after receiving your counselling certificate - ( another senior protection: makes the lender back off until we have time to think about it) - you can proceed with the lender by completing a loan request. You will decide at this time how you want to take the proceeds from the loan.

These are you options:

1.      Line of credit that grows over time
2.      A total lump sum - some now, some later
3.      Monthly payments
4.      or combine the 3
Starting the process is easy :

Complete the application with your loan agent. Gather up a few bits of paperwork. Then I turn your loan in where my processor will oder:
  • A prekiminary title report
  • a credit evaluation
  • A property value appraisal
  • Any payoffs needed on existing liens
Once your lender has communicated with you, you've provided all the necessary paperwork and documentation, your loan file will be complete. Once complete, your loan request will be submitted to my underwriters who will provide final loan approval
When your loan has been approved and all conditions met, the lender will draw up the loan documents. There are many pages so do not let that overwhelm you. You will be guided through the signing process and your documents notarized.
Another senior protection : You sign the loan papers and then have ANOTHER 3 days to think about this to make sure it's what you want.Once the 3 days have passed,  your monies are released, including paying off an amount of a previous lien on the property.

The loan is DONE. You will start to receive paperwork from the lender - BE SURE you contact me with any questions. I am not only here for you now but for the long-term too.
Repaying the Reverse

 You have the option of making any size payment you want on this new reverse mortgage of yours. You can  pay nothing - you can pay a portion -which simply increases the amount available - or you can pay the full calculated payment.
The reverse mortgage must be closed out within 6-12 months, accomplished by conversations with the reverse mortgage holder and the family and/or estate.This must happen when: 1) the property is no longer owner occupied, 2) the house will be or has been sold, or 3) the last borrower passes away. When the borrowers die, the home may be repaid any number of ways. a.The home can be sold, the reverse paid off and the balance goes to the estate b.  the loan may be repaid by refinancing the existing reverse mortgage. Any and all equity remaining after the reverse mortgage is paid off belongs to the heirs/estate. AND theirs the Rule of 95 -
ASK DARLENE BELL about this - another senior protection.
What can I expect to learn from my housing counseling appointment?
HUD Accredited housing counselors work with seniors to help them understand their choicesandif a reverse mortgage makes sense for them.
  • Monthly bills
  • Monthly expected income
  • Loan pros and cons
  • Watch for low margin with interest rates
  • Understand that lenders can help pay closing costs
HUD-approved HECM housing counselors are required to present loan comparisona and explain analysis information which then meets the established guidelines. These HUD Certified counselors have the job and the responsiblity to help you  make a responsible financial decision, 
AARP regulates a national network of HUD-approved housing counseling agencies. AARP administers the exam that certifies counselors for HUD-approved HECM housing counseling agencies. You can be sure that they are looking out for your best interest.
What can I expect to be included in closing costs?
All the clsoing costs with the exception of the counseling and appraisal  can be financed in the loan. With the exception of FHA mortgage insurance, the costs are about the same as a regular loan.
Credit report:  -- under $20 - checks required for any judgements or liens
Title insurance: Protects borrower and lender against any loss due to disputes over property ownership –  the cost is determinbed by the loan amount, the larger loan, the higher ttitle fee.
Escrow, Settlement or Closing: Preparation of documents and any required closing services -- $450-650
Document Preparation: of all final closing documents -- $175-$250
Recording: Recording the new mortgage with the County Recorder's Office -- $100-$150
Courier: Overnight mailing of any documents between the lender and the title company or loan investor --under $50
Reverse Mortgage and how to avoid fraud and scams...
Talk to me, Darlene Bell. Schedule an appointment with a HUD-approved counselor. They will help you understand and evaluate your situation and how a reverse mortgage would or would not work for you. The cost is minimal but make sure you get a name from a list provided to me by HUD.
As always, read the fine print. Keep your eyes open looking for anything that dosn't seem right or make sense to you. Your HUD-approved counselor is there to answer any questions and help you understand.If it doesn';t seem right or clear...ASK!. And if you think anything is off or sounds illegal or unethical , tell your HUD counsellor right away.
You have 3 days to change your mind. Once you've signed loan documents, you have 3 days to decide if the loan is the right choice for you. This is another senior protection built in . After 3 days, your loan will close. Once it has closed, all monies will be distributed and you're DONE!

I would need an income to qualify.
TRUE -- You would need enough income to show fonancial responsibility. You can pay your taxes, and other household debts.
I would need to be debt-free to qualify.
FALSE -- There are credit requirements but you can still have debt. Any lien on the property would need to be be paid off with the new loan.
My health would disqualify me.
FALSE -- Lenders wouldn't dare discriminate against you because of your health. That's against the law.
I wouldn't qualify because I owe payments on my home now
FALSE  -- You may still qualify. The proceeds of the reverse mortgage loan may be used to pay off the home and other debts.
The lender owns your home ?  
FALSE -- This is just like a traditional mortgage. When you're finsihed with it, you pay it off, period. The lender's interest is only the loan balance. You and your heirs own the home and any equity therein.
My social security, medicaid or medicare may be fouled up if I get a reverse mortgage. Will my benefits suffer?
FALSE - this is a tax free loan which will not impact your other socail services.
There have been some changes made however so check with your local area agencies on aging - programs vary by state.
Getting this loan will cause my taxes to go up.
FALSE – you are taking tax free cash from equity you have previously purchased in an asset       ( your home)
I'm afraid if the loan balance goes up, I'll end up owing more money than the house is worth.
FALSE: Here is yet another senior protection - This loan is a NON-RECOURSE loan which
My loan terms can change if my loan is sold.
FALSE – At the closing of your loan, you will sign a legal contract assuring your loan's terms cannot be changed, regardless if the loan is sold.
Reverse mortgages are only a good idea for seniors who are cash poor.
WRONG-- While some seniors may clearly have greater financial need, a reverse mortgage can be an excellent estate-planning tool for any senior that has substantial equity in their home.
A reverse mortgage would end up being a burden to my kids.
FALSE -- Borrowers have between six months to a year to pay off the reverse mortgage if they choose. The loan may be repaid by refinancing the existing reverse mortgage, or by selling the property. Any remaining proceeds would then belong to the heirs, or the estate.

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