Here's how a reverse mortgage works. You have a home worth $200,000. You sell it to a reverse mortgage company, BUT they only pay you $120,000 for the house. AND you have to pay them an additional $12,000 to buy the house from you. AND you pay the monthly interest on the loan that the reverse mortgage company takes out to buy your home, at a rate 3% higher than a normal mortgage. AND you pay insurance and servicing fees on the loan. AND you have to pay the usual property taxes & utilities on your home. AND you have to pay mandatory home owners insurance, plus maintenance. AND if you go into an assisted care facility, or live with a relative, they'll take your home away (usually after a year). If you don't have another income stream, you will eat through your home equity faster than you ever thought possible, and you will end up on the street. So unless you are 84 years of age, and have been diagnosed with stage III cancer, do not even consider a reverse mortgage. PS. I left off Counseling fee, Origination fee, Initial Mortgage Insurance Premium, and Third-party fees
100% incorrect. One does not SELL their home when they get a loan. Wherever you got this information, you need to go back and read it again. You are ABSOLUTELY wrong about the facts of a Reverse Mortgage.
Thanks for theexplanation Dominique! This type of mortgage can also be used to purchase a home by people 62 and over. This is done in a one time cash payment at closing with the reverse mortgage lender bringing the reverse mortgage proceeds and the buyer brining the remaining funds (typically from the sale of the previous home). Example, if a 70 year old home owner has $400K from the sale of their home, they could purchase the next home for approximately $200k (depending on interest rates, etc) in a one time closing and keep the remaining $200K in their savings. The reverse mortgage lender would bring the remaining proceeds. It's a great solution for those looking to right size in retirement! Also - using the home equity from a reverse mortgage line of credit in a down market preserves the assets under management of your client. You have a partial understanding of the product - there is much more you should educate yourself and your followers and clients with. Have a great day!
I have a big issue.... my husbands grandmother has a reverse mortgage on her home and my husband and I want to buy it ... is it possible she still has quality left in the home to gift us? After appraising the home?
I think it’s great that you took the time to try and educate people about the pros and cons of reverse mortgages without this even being your main focus or your job. I’m sure through your research you have read and learned that these are very complex products. It is very clear you have a general understanding of what a reverse mortgage is but there are numerous parts of the video that are not explained correctly that could be leading people to false conclusions. Just one example of what I’m talking about is if you have $150,000 in equity the bank won’t even come close to let you borrow that much on a reverse mortgage. The reason why Is because (contrary to popular opinion) the bank wants you to keep equity your home for any unforeseen circumstances that may occur down the road. Reverse mortgages are also non-recourse, which means you never have to write a check to sell your home. In a worst-case scenario if your home was only worth $100,000 but you owe $200,000 to the reverse mortgage, the 100k difference does not get charged to you or your estate, you don’t owe one penny back to the bank because it's NON- RECOURSE. On the flipside if the home continues to go up in equity and you owe much less when you sell your home or pass away your family gets to keep all the equity. The fees you mentioned of 2 to 3% each year is something I’m scratching my head with, what do you mean when you say fees of 2 to 3% each year? This loan is no different than a traditional (forward) mortgage, being that daily interest is daily interest on ANY type of loan, it’s just that with a revere mortgage when you get your statement at the end of the month you don’t have to pay the interest if you decide not to. Overall great effort on the video but lots of gray vs factual information. Pls fee free to call me at 303-223-7474 in regards to other areas of concern with the video content. Thx, Chad.
@Chad. You're not the first and definitely won't be the last to find the flaws in my content. I'll do you one better...I'm a financial planner that isn't 100% perfect in my field of expertise either (LOL). However, rather than spend time on my channel correcting my mistakes (which I get because it gives you a platform), you could really help by starting your own platform (IG, FB, YT, LI, etc.) and really providing value to an audience that obviously wants this type of information. Do you accept the challenge?
Andy you are correct, he doesn’t know what he’s talking about. If your in Florida and you need a reverse mortgage let me know there are further protections that we can set up to grow your wealth fir your children.
FHA does have an income requirement. You would have to show that you will be able to continue paying property taxes and insurance. If there is no evidence of income you most likely will not be eligible.
Hi Xin! Thanks for watching. Steven is a friend. I'd reach out to him. You can learn more about his expertise here: ruclips.net/video/3uT0sMYnqU0/видео.html
Someone told me that the way to do this is to put life insurance on the owner (parent) of the house so when the individual who passes away you(son/daughter/heir) can receive a check to pay the reverse mortgage off. Anybody ever done this or if this is feasible ?
So your equity is the value of your property minus what you still owe to the bank, so in your example, if you still owe 50k to the bank, and you have 150k equity, why not use the 150k to pay off the 50k you still owe, rather than giving you that as a loan that you have to pay back with intrest, (or is this loan amount paid off when you sell the home so you get the value of the home minus this lump sum?), so then you only have 100k equity instead of 150k this would allow you to dip into your equity to pay back what you still owe, seems like the banks are no different from the loan sharks, im in the UK so im sure things work different here but i heard this term "reverse mortgage" mentioned in a film today and had to research what it was
Im going to stay single and don't want to pass on my fully paid off condo in Las Vegas. plenty of $$$ in RA and NRA accounts plus ss at 62. It seems wise to monetize the equity and enjoy life. Plan on dying broke. Only other way would be to sell Condo and rent something modest put away 80% of whats left in a money market account. What say you?
The loan are FHA loan and non-recourse. If the property value is less than the principle balance, the client(heirs) is only responsible for the lesser amount either the property value or the principle balance.
Thnx Champ good info for people with no kids! Just wondering, isnt selling ur home and renting a similar sort of thing? U'd be earning interest on the money from the sale of ur home as well.
Sir I appreciate your time. My mom is 63 and we’re planning on moving back to our old house where I grew up in. We used to own it. But we know the owner very well. We will rent it first then own it again. I’m curious if reverse mortgage is right for my mom. We want the house to be in the family forever. I enjoyed your video. 😎😎
Potentially. If you don't care about leaving the house in the family. HECM or cash out refi would provide for repair funds, the former being a better fit for not keeping the home.
Very good information thank you so much. Only one question left, what happens when all payments have been made and or the person dies? I understand you said the loan has to be paid back so I assume the bank keeps and sells the house or do the heirs have to pay the debt?
+Lamont Conaway I cannot speak to that specifically since I’m not a mortgage broker but my gut tells me no because that defeats the purpose of that particular product. you would want a traditional mortgage if you’re goal is to build equity in the home.
Ok, my father is on a reverse mortgage, and Due to his terminal illness on Hospice, I have been given the responsibility of paying the monthly bills and keeping up with the daily maintenance of it.. Heres my question: You stated that the company you did the reverse mortgage of, pays the homeowner a monthly stipend. Correct? In this case, they DONT give my Dad Anything, But he does have a line of credit they gave him too, in which he used 20,000 to fix up and enjoy of which he still owes and we pay it monthly of 14,000. But NOT TO the Reverse Mortgage Company, but to Syncrony Bank!! The reverse mortgage company (Called RMS Reverse Mortgage Solutions) just sends him statements. And a couple of weeks back, called to offer him MORE CREDIT due to the property value jumping Up! I quickly DENIED IT. So can you explain that?? Question #2..... example. if the loan is for 500k, and the house is valued at 1.5 mil at the time of death, does the company have to pay the estate SOME of the difference?? Or they just luck out and make 1 million + credit line amount paid back + interest??
How does a reverse mortgage work in conjunction with a VA loan back in loan would that be a criteria for a VA to continue to back the loan yes or no how does that work
Hi Dominique, I learned a lot from your video! Thank you! I have one question -- economically, which solution is better btw 1) the reverse mtg fully cash on hand then give the cash to the Children (without Inheritance tax applied I assume) before passing away and 2) the House inheritance by Heirs after parents passed away, which some inheritance Tax applies on in Canada? Thank you!
You said that if the person dies, then the loan has to be paid back. If at that time, the home is worth more than the equity I had was when I took out the reverse mortgage, and I have no heirs, will the bank just take the home and sell it? And if so, who gets that additional difference in money from the sale after it covers the equity that I owed back to them at death? The bank? Which brings up another question, if the home is appreciating in value through my retirement years. Am I still only entitled to the value of my original equity at the time I took out the reverse mortgage? And finally, you mentioned that a reverse mortgage might be good for someone that plans to stay in the home, but what if I change my mind at some point and want to move out and buy something smaller to live in? What happens then? Would I just pay back the money that's been paid me and then I am able to sell it as if I never took out a reverse mortgage to begin with? Note: I plan to have my home completely paid off by the time I turn 62, so I will own it. But I still may want to take out a reverse mortgage to have cash to live on in retirement and still stay in the home.
Some or all of this may apply but what I'd recommend is completing your estate plan. You should have specific instructions for what is to be done with the asset after you die. As a general rule, if the asset is worth more than the loan amount when sold the proceeds will go to your estate. Just like with a regular mortgage, you will have to either refinance or sell in order to unlock additional value out of the home. If the plan is to use the home's equity in retirement, I suggest developing a financial plan that has best, baseline and worst case scenarios so that you borrow the correct amount. I hope that helps!
Shalom Dominique my question is i spent my life working in the health care field as a respiratory therapist. my retirement is poor. when my parents passed away they left me the house they had built when i was in preschool. i'm 61 now soon to be 62 since my retirement is not very good i mostly live off of my SSI. i retired on disability o you think a reverse mortgage might be a good option for me? the home has been paid off and has been appraised at 221,000 i have been offered 250,000 for the home. i know with what i receive in disability i will never be able to afford a home like this again. the home sits on 2 acres of land my question is what would be best to sell or do the reverse mortgage?
My grandmother just passed and house was in reverse mortgage, what would be steps take over responsibility of the house? I am 34 years of age and lived with her, she did let me know that I can stay here a year but no other details was provided.
Well went through about 90 percent of the comments and don't see the main question. If I borrow $100,000 how much will I own on that loan with the interest that has built up over the years. since your not making payments the interest keeps adding on and what you owe starts to go up quicker each year. My question is where's the calculator to figure this out? Its not all about qualifying, I wanna know what I will owe if I sell my house in 10 or 15 years. Will it now be $125,000, $150,000 $200,000 on a $100,000 loan? That's my main concern what is the interest and costs this will cost me with all the fees that will also accumulate money. This Should be everyone's main concern and never seems to be a topic on any sight.
So you are selling your home (either lump sum or by payments) over the rest of your life, with the option to buy it back (with interest)? And you secure THEIR risk/money with insurance you pay for?
I don't understand your second question... If you're home is paid off or you have the most equity, insurance is protection for YOUR asset, right? Do you cancel your auto insurance when your car is paid off?
@@DominiqueHendersonCFP I see what you mean, but since I pay cash for cars, the insurance I pay for 100% protects my asset, not the loan company's. It's not too different with the reverse mortgage thing: one pays an increasing % to cover an asset that belongs more and more to someone else. After all the money is paid to the (ex) home owner, 100% of the insurance payments (minus contents insurance) benefit the mortgage company. Not a good deal.
@@DominiqueHendersonCFP It's not like or dislike. I've got a degree in finance and worked as a corp exec (and I grew up poor) so it's programmed in me to watch out for scams and to squeeze pennies. This smells a lot like Vegas gambling where the game is rigged so the house always wins. Sure, some people without heirs beat the actuarial odds and live "too long" and get the best of the deal, but the fact that these reverse mortgage companies are raking it in tells me that most people "lose". Anyway, I appreciate your review of them.
@@tsbrownie everything isnt for everyone, that doesn't make it a scam. The house is yours until you die, no different than having insurance on a forward mortgage. If there is still equity in the house (over what you owe on the reverse mortgage) it goes to your beneficiary at the sale of your home. Reverse Mortgages would only be appealing to certain people 1. Someone with no Children 2. Someone with children that don't want the house after your pass 3. Someone financially strapped during retirement 4. Etc
Excellent explanation. If someone wants to sell their own with a reverse mortgage, can it all be completed at the closing like a regular mortgage house sale?
Hi Candice! Thanks for watching. 1. I'm not a specialist although I'd imagine it works like a typical closing. 2. Keep in mind the product pays you income. If you sell the home you turn off the income stream and there is no more monetization.
Thanks for watching Laura! Generally speaking yes. Mortgage insurance will cover the balance and the lender will usually just sell. You can't owe more than 100% of the value of the home.
i want a reverse mortgage , that i never need to pay back , even if i sell my home , , why cant they do that , they said they care about the customer and are not in it to make a profit , and i know they dont lie .
What if your home happens to be part of a 5-unit rental property? Meaning, your primary residence is one of the units and you own the 5-unit? Would it qualify for a reverse mortgage?
My company will charge nothing up front. Any costs of the loan is rolled into the loan. This is 3rd party fees, origination fees, and MIP. Typically reverse mortgages are more expensive than forward mortgages. The main reason for this is because the lender requires an insurance premium. This makes sense when they are taking most of the risk here. I’m a licensed loan originator and I have nothing but GOOD things to say about reverse mortgages FOR MOST QUALIFIED CLIENTS.
@@andrewmcclure-mlo714 A little deceitful there saying you won't pay anything up front. If you'll get $220k, approx. $20k is coming right off the top at closing. It's not free.
If the owner dies, is it true that the heirs have only 90 days to pay the lending bank 90% of the home's value or risk losing ownership of their deceased parent's home? That's a horror story I heard about AAG.
Can you explain to me what’s a deed lieu and a short sale and when they want to sale there home and taxes and insurance. I just recently got into that department a customer service representative I don’t know a thing about reverse mortgage
What if I out live the all the equity in the house worth? Do I have to sell and leave the house or continue getting the same every month as I did in the past?
barbara tarantino Just keep up your taxes and you won't owe on the loan until death. The lender wont usually let you borrow more than a certain % based on equity, your age, etc. But you can continue to live in the house.
My dad who’s over 65 years old name is on the deed of the house however my name is on the mortgage. My dad lives in the property with me. Can my dad take advantage of reverse mortgage? And when he passes can I refinance in order to take over loan of the house?
+Marlya Indigo Great question and I definitely recommend speaking to a professional about this. Not sure if dad would qualify in this case since he doesn’t own outright and the joint owner is not a spouse. Ideally he’d own the home and then when he passed you would inherit it. You could then sell, refinance or give back to bank (via deed in lieu).
What state are you in Marlya? If you're the one that will inherit the house and you qualify then usually yes. If the heir does not qualify then there's potential problems because the time clock is running and if you don't get it done within the allotted time frame the bank could end up keeping the property.
@@dknowz The bank does not keep the property! If the daughter is acting in good faith to pay off the Reverse, either though refinance or sale of the property, the bank will work with her. Just keep the bank informed on the process and the progress.
Thank you for sharing! Please advice since I don't want to fall in the hands of a scammer. I need to find a broker that is knowledgeable with the following programs HUD - HECM - HELOC.
Tom selleck would say anything he’s getting paid besides he most likely doesn’t have mtgs on his properties. Besides he’s an actor not a financial consultant . It’s like taking medical advice from your plumber
If I am bidding on a reverse mortgage foreclosure house at sherrif’s auction; what should I check before I bid? How different it is from bidding on foreclosed house with trading mortgage?
You must maintain the property in "livable" condition meaning, don't let it fall into a state of disrepair or in a ramshackle condition. Know this: the bank doesn't want the house. They lose money of foreclosures because they can't keep any more money than they are owed on the loan.
You keep saying repeatedly that if you DO plan on leaving the house to your heirs, this isn’t ideal, but you don’t go into detail as to WHY. Not helpful
A reverse mortgage does not require payments. The entire loan balance is due when you die or try and sell the house. Unless your heirs have a spare $100k hanging around to pay off the loan, the house must be sold to cover the balance. If you are under water in the loan, which is common with these types of loans, the money your heirs will make selling the house may not cover the entire balance of the loan. There are some laws regarding the cost of the loan not exceeding that of the house, but that cap is the entire value of the house, not the value of your equity in the house. Likewise, selling your house while you are alive may become non-viable. These loans incur interest, often greater than the increase in home values. This means if you intend to sell the house, you will need to pay more than the value of your equity in the house. Essentially you are trading your house when you die, for the ability to remain and die in the house. Once you have died, whoever funded the loan will take whatever equity you had in the home, which will have grown over time. If you choose to sell the house before you die, you will get charged the interest, which is greater than the growth of the housing market, so the lender still wins. Its literally just a way to trade your house when you die for cash today.
Technically, the house should already be titled as JTWROS or "joint with rights of survivorship". Joint registration differs by state (i.e. JTWROS, JTIC, etc.). However, if memory serves, JTWROS registration should avoid probate, meaning she'd own the house outright if you pass away. If it is not titled that way, you might consider doing that to avoid any problems.😀
Double_Joseph FHA allows for a spouse under 62 as along as one of the spouses is over 62. This means that your wife would be allowed to keep the reverse mortgage upon your passing. Feel free to reach out for more information. Rethink@mutualmortgage.com
Reverse Mortgages are legalized predatory loans. Compound interest accelerates equity destruction. There are far better, more secure ways to monetize the equity in homes that protect the owner and maximize their income, without all of the restrictions of reverse mortgages.
🤔 I'd appreciate a better approach UltimateBargains. I've perused your channel and it seems like you have great information so maybe there's a better way to present your angle. I'm picking up a "come visit my channel to see the solutions I provide" vibe instead of "hey, I have information that can help you" vibe. That's what we DON'T do in this community. We give first, ASK later.
You're not factoring property appreciation. Since the loan is usually funded at 50% of value, do the math. You'll find that the property owner will have to live a long time for the loan to meet or exceed property value. Again, do the math...
Finally, a clear concise, short video regarding Reverse Mtg! THANK YOU!
I thought so too. Finally!
And wrong.
Here's how a reverse mortgage works.
You have a home worth $200,000. You sell it to a reverse mortgage company,
BUT they only pay you $120,000 for the house.
AND you have to pay them an additional $12,000 to buy the house from you.
AND you pay the monthly interest on the loan that the reverse mortgage company takes out to buy your home, at a rate 3% higher than a normal mortgage.
AND you pay insurance and servicing fees on the loan.
AND you have to pay the usual property taxes & utilities on your home.
AND you have to pay mandatory home owners insurance, plus maintenance.
AND if you go into an assisted care facility, or live with a relative, they'll take your home away (usually after a year).
If you don't have another income stream, you will eat through your home equity faster than you ever thought possible, and you will end up on the street.
So unless you are 84 years of age, and have been diagnosed with stage III cancer, do not even consider a reverse mortgage.
PS. I left off Counseling fee, Origination fee, Initial Mortgage Insurance Premium, and Third-party fees
Wrong. Do your homework and speak to someone who’s licensed.
@@andrewmcclure-mlo714 I have. I've described reverse mortgages perfectly. Especially the last 2 items!
100% incorrect. One does not SELL their home when they get a loan. Wherever you got this information, you need to go back and read it again. You are ABSOLUTELY wrong about the facts of a Reverse Mortgage.
Thanks for theexplanation Dominique! This type of mortgage can also be used to purchase a home by people 62 and over. This is done in a one time cash payment at closing with the reverse mortgage lender bringing the reverse mortgage proceeds and the buyer brining the remaining funds (typically from the sale of the previous home). Example, if a 70 year old home owner has $400K from the sale of their home, they could purchase the next home for approximately $200k (depending on interest rates, etc) in a one time closing and keep the remaining $200K in their savings. The reverse mortgage lender would bring the remaining proceeds. It's a great solution for those looking to right size in retirement!
Also - using the home equity from a reverse mortgage line of credit in a down market preserves the assets under management of your client. You have a partial understanding of the product - there is much more you should educate yourself and your followers and clients with. Have a great day!
You made things crystal clear so that anyone can make a very valued decision. Perfect!
Thanks so much!!
Thank you for an excellent explanation of reverse mortgage 👍
Download my ultimate pre-retirement checklist to make sure you're prepared at: djh-capital.com/blog/ultimate-pre-retirement-checklist/
Thanks Dom! It's an honor to be mentioned. My team and I are here to help. We'll answer any and all reverse mortgage related questions.
No problem my man!
I have a big issue....
my husbands grandmother has a reverse mortgage on her home and my husband and I want to buy it ... is it possible she still has quality left in the home to gift us? After appraising the home?
Thank You for this video. You explained it well and gave the pros and cons. Just the information I was looking for on reverse mortgages.
👏
You are welcome!!!! Glad this was helpful for you.
I think it’s great that you took the time to try and educate people about the pros and cons of reverse mortgages without this even being your main focus or your job. I’m sure through your research you have read and learned that these are very complex products. It is very clear you have a general understanding of what a reverse mortgage is but there are numerous parts of the video that are not explained correctly that could be leading people to false conclusions. Just one example of what I’m talking about is if you have $150,000 in equity the bank won’t even come close to let you borrow that much on a reverse mortgage. The reason why Is because (contrary to popular opinion) the bank wants you to keep equity your home for any unforeseen circumstances that may occur down the road. Reverse mortgages are also non-recourse, which means you never have to write a check to sell your home. In a worst-case scenario if your home was only worth $100,000 but you owe $200,000 to the reverse mortgage, the 100k difference does not get charged to you or your estate, you don’t owe one penny back to the bank because it's NON- RECOURSE. On the flipside if the home continues to go up in equity and you owe much less when you sell your home or pass away your family gets to keep all the equity. The fees you mentioned of 2 to 3% each year is something I’m scratching my head with, what do you mean when you say fees of 2 to 3% each year? This loan is no different than a traditional (forward) mortgage, being that daily interest is daily interest on ANY type of loan, it’s just that with a revere mortgage when you get your statement at the end of the month you don’t have to pay the interest if you decide not to. Overall great effort on the video but lots of gray vs factual information. Pls fee free to call me at 303-223-7474 in regards to other areas of concern with the video content. Thx, Chad.
@Chad. You're not the first and definitely won't be the last to find the flaws in my content.
I'll do you one better...I'm a financial planner that isn't 100% perfect in my field of expertise either (LOL).
However, rather than spend time on my channel correcting my mistakes (which I get because it gives you a platform), you could really help by starting your own platform (IG, FB, YT, LI, etc.) and really providing value to an audience that obviously wants this type of information. Do you accept the challenge?
Well explained in simple way and described with comprehensive examples and steps. Good job!👍👏😎
Aren’t these non-recourse loans? That would mean the heirs would never owe more than the house is worth, correct?
Andy you are correct, he doesn’t know what he’s talking about. If your in Florida and you need a reverse mortgage let me know there are further protections that we can set up to grow your wealth fir your children.
@@AndrewsSharkWorld LMAOO
You have been the only dude out there who explained this just perfectly. Really Thank you man!
Glad it helped!
He explained it incorrectly.
FHA does have an income requirement. You would have to show that you will be able to continue paying property taxes and insurance. If there is no evidence of income you most likely will not be eligible.
Thanks for chiming in Kako!
If in that case they will see if they have enough for LESA. That's why you need to have a certain amount in equity
How can I get more information?
Hi Xin!
Thanks for watching. Steven is a friend. I'd reach out to him.
You can learn more about his expertise here: ruclips.net/video/3uT0sMYnqU0/видео.html
You are the only one who got to the point! Great job!
Someone told me that the way to do this is to put life insurance on the owner (parent) of the house so when the individual who passes away you(son/daughter/heir) can receive a check to pay the reverse mortgage off. Anybody ever done this or if this is feasible ?
Thank you 4 this information...it applies y
To my situation...u are good
So your equity is the value of your property minus what you still owe to the bank, so in your example, if you still owe 50k to the bank, and you have 150k equity, why not use the 150k to pay off the 50k you still owe, rather than giving you that as a loan that you have to pay back with intrest, (or is this loan amount paid off when you sell the home so you get the value of the home minus this lump sum?), so then you only have 100k equity instead of 150k this would allow you to dip into your equity to pay back what you still owe, seems like the banks are no different from the loan sharks, im in the UK so im sure things work different here but i heard this term "reverse mortgage" mentioned in a film today and had to research what it was
Thank you
Im going to stay single and don't want to pass on my fully paid off condo in Las Vegas. plenty of $$$ in RA and NRA accounts plus ss at 62. It seems wise to monetize the equity and enjoy life. Plan on dying broke. Only other way would be to sell Condo and rent something modest put away 80% of whats left in a money market account. What say you?
Backup plans are always good to have when comes to life. 😁
I’d probably talk to a CFP about your situation and make sure considering all options.
The loan are FHA loan and non-recourse. If the property value is less than the principle balance, the client(heirs) is only responsible for the lesser amount either the property value or the principle balance.
Your channel is so clear and info is precise. Thank you
So nice of you
Great info Dominique!
Thnx Champ good info for people with no kids! Just wondering, isnt selling ur home and renting a similar sort of thing? U'd be earning interest on the money from the sale of ur home as well.
You made it very clear to understand. Thank you
Sir I appreciate your time. My mom is 63 and we’re planning on moving back to our old house where I grew up in. We used to own it. But we know the owner very well. We will rent it first then own it again. I’m curious if reverse mortgage is right for my mom. We want the house to be in the family forever. I enjoyed your video. 😎😎
I think so but check out the pinned comment on this video👍🏽
Wow a non bias video thank you.
Thanks man! Much appreciated.
Great explanation. Thanks. I subscribed to the Channel.
Thanks for the sub!
SUPER JOB!!! Thanks for making it simple to understand.
You are so good at your job!
Thanks for saying that!
Thank you for your unbiased info.
+PAT LOVE * PATS2CENTS your are most welcome!
Makes sense thanks
The only way to monetize your equity is to sell your home, or borrow against it? Did I hear that right?
That is correct!
Thank you for sharing. Well explained
So nice of you
Thanks.
Great job! Thanks for the information
You made this concept so simple! Thank you (:
Glad it was helpful!
Perfect explanation
Thanks
How to get a reverse mortgage on a totally paid house. I get SSI plus Medicaid but need to understand how a reverse mortgage is
How old are you?
Very helpful, thank you.
Thank you for your information so useful
Where would you suggest to get a reverse mortgage in the Memphis Tennessee area
You explained it clearly. Thank you!
You're welcome!
I'm a 66 year old female with no heirs. House needs repairs. No mortgage. No property taxes. Could a HECM be a consideration?
Potentially. If you don't care about leaving the house in the family. HECM or cash out refi would provide for repair funds, the former being a better fit for not keeping the home.
Thanks for sharing, good video.
Very good information thank you so much. Only one question left, what happens when all payments have been made and or the person dies? I understand you said the loan has to be paid back so I assume the bank keeps and sells the house or do the heirs have to pay the debt?
Thank you. 👍
Can you make a recommendation a honest reverse loan co?
Check pinned post
hey can you make payments on the loan monthly to maintain some equality in the home
+Lamont Conaway I cannot speak to that specifically since I’m not a mortgage broker but my gut tells me no because that defeats the purpose of that particular product. you would want a traditional mortgage if you’re goal is to build equity in the home.
What if my home is paid off but have no retirment except social security ? Would this be worth considering?
Definitely. Call my friend Steve Sless.
Ok, my father is on a reverse mortgage, and Due to his terminal illness on Hospice, I have been given the responsibility of paying the monthly bills and keeping up with the daily maintenance of it..
Heres my question: You stated that the company you did the reverse mortgage of, pays the homeowner a monthly stipend. Correct?
In this case, they DONT give my Dad Anything, But he does have a line of credit they gave him too, in which he used 20,000 to fix up and enjoy of which he still owes and we pay it monthly of 14,000. But NOT TO the Reverse Mortgage Company, but to Syncrony Bank!! The reverse mortgage company (Called RMS Reverse Mortgage Solutions) just sends him statements. And a couple of weeks back, called to offer him MORE CREDIT due to the property value jumping Up! I quickly DENIED IT. So can you explain that??
Question #2..... example. if the loan is for 500k, and the house is valued at 1.5 mil at the time of death, does the company have to pay the estate SOME of the difference?? Or they just luck out and make 1 million + credit line amount paid back + interest??
How does a reverse mortgage work in conjunction with a VA loan back in loan would that be a criteria for a VA to continue to back the loan yes or no how does that work
Totally recommend contacting Steve Sless in the pinned comment.
And if my old run-down home is only worth $30,000, if that? thanks
Hi Dominique, I learned a lot from your video! Thank you! I have one question -- economically, which solution is better btw 1) the reverse mtg fully cash on hand then give the cash to the Children (without Inheritance tax applied I assume) before passing away and 2) the House inheritance by Heirs after parents passed away, which some inheritance Tax applies on in Canada? Thank you!
You definitely should speak with a specialist. If you are in the US, contact Sless group. Info in the pinned comment
You said that if the person dies, then the loan has to be paid back. If at that time, the home is worth more than the equity I had was when I took out the reverse mortgage, and I have no heirs, will the bank just take the home and sell it? And if so, who gets that additional difference in money from the sale after it covers the equity that I owed back to them at death? The bank? Which brings up another question, if the home is appreciating in value through my retirement years. Am I still only entitled to the value of my original equity at the time I took out the reverse mortgage? And finally, you mentioned that a reverse mortgage might be good for someone that plans to stay in the home, but what if I change my mind at some point and want to move out and buy something smaller to live in? What happens then? Would I just pay back the money that's been paid me and then I am able to sell it as if I never took out a reverse mortgage to begin with? Note: I plan to have my home completely paid off by the time I turn 62, so I will own it. But I still may want to take out a reverse mortgage to have cash to live on in retirement and still stay in the home.
Some or all of this may apply but what I'd recommend is completing your estate plan. You should have specific instructions for what is to be done with the asset after you die.
As a general rule, if the asset is worth more than the loan amount when sold the proceeds will go to your estate.
Just like with a regular mortgage, you will have to either refinance or sell in order to unlock additional value out of the home. If the plan is to use the home's equity in retirement, I suggest developing a financial plan that has best, baseline and worst case scenarios so that you borrow the correct amount.
I hope that helps!
Great explanation!!!
Glad it was helpful!
Shalom Dominique my question is i spent my life working in the health care field as a respiratory therapist. my retirement is poor. when my parents passed away they left me the house they had built when i was in preschool. i'm 61 now soon to be 62 since my retirement is not very good i mostly live off of my SSI. i retired on disability o you think a reverse mortgage might be a good option for me? the home has been paid off and has been appraised at 221,000 i have been offered 250,000 for the home. i know with what i receive in disability i will never be able to afford a home like this again. the home sits on 2 acres of land my question is what would be best to sell or do the reverse mortgage?
Definitely recommend reaching out to the contact in the pinned comment (Steven Sless).
How cab you write a check if you're dead
Very good thanks!
+arsenijcz 💯you're welcome
My grandmother just passed and house was in reverse mortgage, what would be steps take over responsibility of the house? I am 34 years of age and lived with her, she did let me know that I can stay here a year but no other details was provided.
Gia. I'm sorry for your loss.
You definitely need to reach out to the bank immediately. They would be your best source of help.
Well went through about 90 percent of the comments and don't see the main question. If I borrow $100,000 how much will I own on that loan with the interest that has built up over the years. since your not making payments the interest keeps adding on and what you owe starts to go up quicker each year. My question is where's the calculator to figure this out? Its not all about qualifying, I wanna know what I will owe if I sell my house in 10 or 15 years. Will it now be $125,000, $150,000 $200,000 on a $100,000 loan? That's my main concern what is the interest and costs this will cost me with all the fees that will also accumulate money. This Should be everyone's main concern and never seems to be a topic on any sight.
Reach out to my friend Steve Sless. His info is in the pinned comment on this video.
Reverse mortgages are non-recourse loans. Your heirs will never owe more than the value of the home. Otherwise, good video.
👌
So you are selling your home (either lump sum or by payments) over the rest of your life, with the option to buy it back (with interest)? And you secure THEIR risk/money with insurance you pay for?
I don't understand your second question... If you're home is paid off or you have the most equity, insurance is protection for YOUR asset, right? Do you cancel your auto insurance when your car is paid off?
@@DominiqueHendersonCFP I see what you mean, but since I pay cash for cars, the insurance I pay for 100% protects my asset, not the loan company's. It's not too different with the reverse mortgage thing: one pays an increasing % to cover an asset that belongs more and more to someone else. After all the money is paid to the (ex) home owner, 100% of the insurance payments (minus contents insurance) benefit the mortgage company. Not a good deal.
Sounds like you don’t like reverse mortgages😝
@@DominiqueHendersonCFP It's not like or dislike. I've got a degree in finance and worked as a corp exec (and I grew up poor) so it's programmed in me to watch out for scams and to squeeze pennies. This smells a lot like Vegas gambling where the game is rigged so the house always wins. Sure, some people without heirs beat the actuarial odds and live "too long" and get the best of the deal, but the fact that these reverse mortgage companies are raking it in tells me that most people "lose". Anyway, I appreciate your review of them.
@@tsbrownie everything isnt for everyone, that doesn't make it a scam. The house is yours until you die, no different than having insurance on a forward mortgage. If there is still equity in the house (over what you owe on the reverse mortgage) it goes to your beneficiary at the sale of your home. Reverse Mortgages would only be appealing to certain people
1. Someone with no Children
2. Someone with children that don't want the house after your pass
3. Someone financially strapped during retirement
4. Etc
Excellent explanation. If someone wants to sell their own with a reverse mortgage, can it all be completed at the closing like a regular mortgage house sale?
Hi Candice! Thanks for watching.
1. I'm not a specialist although I'd imagine it works like a typical closing.
2. Keep in mind the product pays you income. If you sell the home you turn off the income stream and there is no more monetization.
The answer is, yes. Just like selling any home with a mortgage lien, the balance of the loan has to be paid off at the time they sell the property.
How about the children when the mother or father died. Do the children gets the house or can they purchase the house
so if you go upside down you still don't owe til you move or die. And what about points up front?
Thanks for watching Laura!
Generally speaking yes. Mortgage insurance will cover the balance and the lender will usually just sell. You can't owe more than 100% of the value of the home.
Why is it hard get reverse mortgage for farms?
I have no idea🤷🏾♂️
I’ve never been so confused before maybe because I’m getting close to 62
Can a reverse mortgage go into foreclosure before the borrower dies
No
i want a reverse mortgage , that i never need to pay back , even if i sell my home , , why cant they do that , they said they care about the customer and are not in it to make a profit , and i know they dont lie .
What if your home happens to be part of a 5-unit rental property? Meaning, your primary residence is one of the units and you own the 5-unit? Would it qualify for a reverse mortgage?
Good question. You'll have to ask an expert. I'm not sure.
@@DominiqueHendersonCFP Thanks! Great vid! Very informative..
Then there is the issue of upfront cost of obtaining the loan. How much are they typically?
My company will charge nothing up front. Any costs of the loan is rolled into the loan. This is 3rd party fees, origination fees, and MIP. Typically reverse mortgages are more expensive than forward mortgages. The main reason for this is because the lender requires an insurance premium. This makes sense when they are taking most of the risk here. I’m a licensed loan originator and I have nothing but GOOD things to say about reverse mortgages FOR MOST QUALIFIED CLIENTS.
@@andrewmcclure-mlo714 A little deceitful there saying you won't pay anything up front. If you'll get $220k, approx. $20k is coming right off the top at closing. It's not free.
If the owner dies, is it true that the heirs have only 90 days to pay the lending bank 90% of the home's value or risk losing ownership of their deceased parent's home?
That's a horror story I heard about AAG.
I would definitely call the lender and see if you could extra relief especially during this time.
Best of luck to you.
@@DominiqueHendersonCFP Thanks. Great channel.
Can you explain to me what’s a deed lieu and a short sale and when they want to sale there home and taxes and insurance. I just recently got into that department a customer service representative I don’t know a thing about reverse mortgage
Did my best on an answer here: ruclips.net/video/1wr4rZt_0RE/видео.html Thanks for watching and good luck!
Thank you so much!
What if I out live the all the equity in the house worth? Do I have to sell and leave the house or continue getting the same every month as I did in the past?
barbara tarantino Just keep up your taxes and you won't owe on the loan until death.
The lender wont usually let you borrow more than a certain % based on equity, your age, etc.
But you can continue to live in the house.
Dominique Henderson thanks D.
Is there a standard length of a reverse mortgage? (15 years, 30 years). Thank you.
Generally the time you stay in the property is the length of the loan.
My dad who’s over 65 years old name is on the deed of the house however my name is on the mortgage. My dad lives in the property with me. Can my dad take advantage of reverse mortgage? And when he passes can I refinance in order to take over loan of the house?
+Marlya Indigo Great question and I definitely recommend speaking to a professional about this.
Not sure if dad would qualify in this case since he doesn’t own outright and the joint owner is not a spouse.
Ideally he’d own the home and then when he passed you would inherit it. You could then sell, refinance or give back to bank (via deed in lieu).
What state are you in Marlya? If you're the one that will inherit the house and you qualify then usually yes. If the heir does not qualify then there's potential problems because the time clock is running and if you don't get it done within the allotted time frame the bank could end up keeping the property.
@@dknowz The bank does not keep the property! If the daughter is acting in good faith to pay off the Reverse, either though refinance or sale of the property, the bank will work with her. Just keep the bank informed on the process and the progress.
Thank you for sharing! Please advice since I don't want to fall in the hands of a scammer. I need to find a broker that is knowledgeable with the following programs HUD - HECM - HELOC.
talk to my buddy Steve Sless
Tom Sellick says reverse mortgages are great. He wouldn't lie.
LOL.
Tom selleck would say anything he’s getting paid besides he most likely doesn’t have mtgs on his properties. Besides he’s an actor not a financial consultant . It’s like taking medical advice from your plumber
You do not make monthly payments? Right?
Thanks for watching Susanne. I'm glad I could help😀
You don't "make" monthly payments, you "receive" monthly payments. Or whatever frequency you set.
@@DominiqueHendersonCFP Thank You!
If I am bidding on a reverse mortgage foreclosure house at sherrif’s auction; what should I check before I bid? How different it is from bidding on foreclosed house with trading mortgage?
I have no idea.
Check out @Danielle Pierce on YT.
Terrible product, talk about predatory lending.
Interesting comment...what exactly do you mean? How the bank can end up with the home or something else?
After you get the reverse mortgage, you have to keep your house and yard (property) in perfect condition or they can take it from you...
You must maintain the property in "livable" condition meaning, don't let it fall into a state of disrepair or in a ramshackle condition. Know this: the bank doesn't want the house. They lose money of foreclosures because they can't keep any more money than they are owed on the loan.
You keep saying repeatedly that if you DO plan on leaving the house to your heirs, this isn’t ideal, but you don’t go into detail as to WHY. Not helpful
Definitely would recommend speaking with a reverse mortgage specialist about your particular situation.
A reverse mortgage does not require payments. The entire loan balance is due when you die or try and sell the house. Unless your heirs have a spare $100k hanging around to pay off the loan, the house must be sold to cover the balance. If you are under water in the loan, which is common with these types of loans, the money your heirs will make selling the house may not cover the entire balance of the loan. There are some laws regarding the cost of the loan not exceeding that of the house, but that cap is the entire value of the house, not the value of your equity in the house.
Likewise, selling your house while you are alive may become non-viable. These loans incur interest, often greater than the increase in home values. This means if you intend to sell the house, you will need to pay more than the value of your equity in the house.
Essentially you are trading your house when you die, for the ability to remain and die in the house. Once you have died, whoever funded the loan will take whatever equity you had in the home, which will have grown over time. If you choose to sell the house before you die, you will get charged the interest, which is greater than the growth of the housing market, so the lender still wins.
Its literally just a way to trade your house when you die for cash today.
So if your not at least 62. Forget it
lets say i pass away can i transfer the house into my wifes name if she is still alive at 62?
Technically, the house should already be titled as JTWROS or "joint with rights of survivorship". Joint registration differs by state (i.e. JTWROS, JTIC, etc.). However, if memory serves, JTWROS registration should avoid probate, meaning she'd own the house outright if you pass away.
If it is not titled that way, you might consider doing that to avoid any problems.😀
@@DominiqueHendersonCFP thanks for the quick reply. she is not 62 yet. she will be in 4 years. biggest flaw marrying a young wife LOL
Double_Joseph FHA allows for a spouse under 62 as along as one of the spouses is over 62. This means that your wife would be allowed to keep the reverse mortgage upon your passing. Feel free to reach out for more information. Rethink@mutualmortgage.com
@Bobby Shupinski Incorrect www.hud.gov/program_offices/housing/sfh/hecm/surviving_non_borrowing_spouse
Reverse Mortgages are legalized predatory loans.
Compound interest accelerates equity destruction.
There are far better, more secure ways to monetize the equity in homes that protect the owner and maximize their income, without all of the restrictions of reverse mortgages.
🤔
I'd appreciate a better approach UltimateBargains.
I've perused your channel and it seems like you have great information so maybe there's a better way to present your angle.
I'm picking up a "come visit my channel to see the solutions I provide" vibe instead of "hey, I have information that can help you" vibe.
That's what we DON'T do in this community.
We give first, ASK later.
You're not factoring property appreciation. Since the loan is usually funded at 50% of value, do the math. You'll find that the property owner will have to live a long time for the loan to meet or exceed property value. Again, do the math...
Guy, I meant to say...
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