Cinci Anderson, San Diego Reverse Mortgage Consultant | Qualifying For A Reverse Mortgage Still Easy After New Law

Cinci Anderson, a San Diego reverse mortgage consultant told us, “The main qualification in securing a reverse mortgage is that one person on title of the home must be at least sixty two years old.”

A borrower can already own their home and have equity in it and do a reverse mortgage on the property. They can also purchase a new home on a reverse mortgage. In the case of a new purchase, there must be a valid sales contract. The new purchase can be for a mobile home, a condominium, or a regular type home.

There are a few qualifications or restrictions, such as a foreclosure, that may keep an applicant from securing the reverse mortgage but in most cases the borrower will be approved. HUD will look at the value of the property, the age and the interest and those three factors tell them how much money will be available to the applicant. In most cases, people have an existing mortgage and that has to be paid off before the reverse mortgage can proceed.

In April of 2015, new requirements were put in place which requires an applicant to undergo a financial assessment. That doesn’t necessarily mean a credit check; it just means that the lender will look at the applicant to make sure that they can pay their taxes and insurance. The reason this requirement was put in place in to insure, even though there may not be a house payment, the home owner will maintain the taxes and insurance on the home. In some cases the home owner was losing the home because the taxes and insurance were not being paid.

A major misconception about reverse mortgages is that the bank will own the home.

The truth is that the reverse mortgage is a non-recourse loan. It protects the family, but the bank never takes the home. Title stays in the name of the individual or stays in the name of the trust, whichever is the case.

Major Banks, such as Wells Fargo, Met Life and Bank of America, no longer service reverse mortgages. Caution would be advised when choosing the source of a reverse mortgage. Those that have a reverse mortgage from a bank that no longer services it will have no one to turn to for advice if laws change or life changes require changes that need to be made to the loan. It can be much the same if the reverse mortgage is secured from a major provider that is available only through an 800 number.

Another factor to keep in mind is that the fees charged for processing the loan are not the same wherever you apply. A wise decision would be for the borrower to investigate the advice of an independent consultant before deciding on the path to follow with their reverse mortgage.

Learn more about Cinci on LinkedIn at: https://www.linkedin.com/in/cincianderson

Or, call (760) 521-7715.