Thank you Dough! Wishing you good health to continue educate us. I’m 62 years old female still working, waiting to be eligible for Medicare at 65. I appreciate for your video. 🙏🏼
Doug, we really enjoyed this video on reverse mortgages! You mentioned you and your wife were going through the process of getting a reverse mortgage. Who did you elect to go with? I know there are many companies out there doing them, and we wanted to make sure we were dealing with a reputable one. We've been following you for years since seeing you in person back in early 2000's, and we respect your ideas and decisions. Thanks!
Hey Daniel, I know you didn't pose me with the question to me, but I would recommend Finance of America. I'm a broker and they are one of only two companies out of dozens that i've brokered for where I feel they actually care and treat people like more than a number. hope it helps
@@diannjohnson7675 There is way more things to consider besides eliminating the mortgage payments. You people reading my comment need to look beyond temporary financial relief thinking you will worry about the rest later. If your reverse mortgage is not going to be enough to last you until you are dead then you’d better damn well downsize now. Be smarter than people promoting reverse mortgages. You could run out of money and equity. Then you are doomed. Consider keeping your ideas based in reality , your reality. If you are 85 you are much more suited for a reverse mortgage than someone 70 years old. You would be in better financial shape if you are 85 and the monthly payments cover cost of mortgage, and taxes, and insurance and maybe even some utility bills. Just eliminating the mortgage may not help you nearly enough. Think about it.
Hey Doug. Thank you so much for this informative take and dispelling some of the misinformation out there. Reverse mortgages are a focus of my mortgage brokerage and have helped many families, including my own mother before she died. Like any other product, do your due diligence and look at all sides.
Doug, what about a conventional loan? I haven’t heard anyone mentioned it for a Reverse mortgage. I have listened to a few clips on FHA LOANS… Thanks for your input and keep helping us all understand this method.
The HECM reverse mortgage is in the family of FHA loans nor is it a conventional loan. There are other reverse mortgages that are not FHA HECM's but they are still not conventional loans. Income qualifying for a reverse mortgage is much different than a conventional loan. The monthly mortgage payment isn't taken into account when income qualifying for a reverse mortgage, so right away your loan qualifying power goes up. The trade - off is the interest that accrues each month on a reverse, if gone unpaid (you can make payments in any amount as often as you like), gets tacked on to the balance of your loan and gets paid once your home sells or the loan gets refinanced.
What happens when the 9x fraction creation is returned to the bank by the loanee? Do the commercial bank keep the newly created money or do they have to return part to the central bank?
What happens if the house is in really poor condition? Obviously, the value will be low considering all the work that will need to be done. Will the lender still offer a reverse mortgage in that scenario to be able to use the equity for repairs?
Doesn't mention the line of credit option which for me, is the best choice for tapping the money you'd get from a reverse mortgage. I'm considering getting one in the future. Right now, because of rising interest rates, I'd qualify for less money. The pro of higher interest rates is the line of credit will accrue more money. I'd ideally like to take a reverse mortgage approx. 3-4 years before my 401k funds run out. I'm 66 and don't anticipate that time for around 5-7 years.
Took out an RM as a pension for spouse ( now 77) after my death. After nine years it grew to $450,000. No draws. The house is worth north of 550. Suggestions🧙♂?
So, one has To. Be older than 62 to do a Reverse mortgage?! But, yet the taxes. As well as, the house insurance still needs to get paid? That does make sense. And finally one would, of course, only pay back "the Reverse mortgage," if one sells their home. But, if you stay in your home, then you don't pay back the "Reverse Mortgage."! Great! Got it!
No. There are 55 and over reverse mortgages that are now available. They have different guidelines than the HECM FHA reverse mortgage which have a minimum age of 62. Property taxes, and property insurance (not earthquake) you are responsible for paying.
"stay in your home" has a few nuances. You can't travel or live outside of the house for more than 2 months. If you break a hip and go into rehab for 6 mos, I think you can be in danger of losing.
@@waitaminute2015 You can travel and live outside of your home that has the reverse mortgage on it the caveat is that you must reside in the home for at least 6 months and 1 day per calendar year. If the last living borrower goes to a rehab facility for more than 12 consecutive months, that would cause a loan maturity event. The key is consecutive months. If they came home for a month in between surgeries or rehab stays, that re-starts the 12 month clock.
Great video Doug. Question: There are some articles and RUclips videos that say at age 55, one can get a HECM due to some changes in the law back in 2021. Did the changes actually take effect or is it a lie? Pls advise.
Hello Ajay, there is a reverse mortgage loan that is not a HECM, that is available for homeowner's age 55. No changes to any law, it's a different loan product. The HECM is in the family of FHA loans. The 55 and over reverse mortgage is not an FHA loan and it has differing loan guidelines than the HECM. I do reverse mortgages for a living. I too am a Doug Andrew fan!
EVERYONE wants to know what percentage of their equity will they get in a lump sum payment (on average) and how much will their payments be and what will make their monthly payments go up and you didn't even mention that. NEXT.
Humm, didn't really highlight the cons. There are actually other things to consider. For example if your health changes as you age and you need to move. Downsizing should have been seriously discussed. Downsizing and making some good investments or buying a place with an inlaw suite to rent out.
What if you outlive your life expectancy? Also, if you are in a nursing home for 12 months healing from a fall, sounds to me the loan comes due. Not a good plan, folks.
Do people spend 12-months in a nursing home healing from a fall? I'd think eventually, they rehabilitate at home. Also, the lender sends an annual certification of primary residence. All the homeowner would have to do is check the box, assuming the home owner intends to go back home.
If you outlive your life expectancy, you still get to stay in the home (as long as it stays as your primary residence) without making monthly payments. The nursing home stipulation is 12 consecutive months. If you are able to come home for a span than have to go back for another surgery, that restarts the 12 consecutive clock. Also if there is a remaining borrower who is also on the reverse mortgage loan, even though one borrower is in a nursing home for 12 consecutive months, the other gets to stay in the property, it doesn't have to be sold.
You don’t understand an HECM. You can stay in your home till you die, period. If all parties leave the home for more than one year, the mortgage becomes due, but you can never be upside down or evicted, as long as you pay taxes and insurance just like any mortgage. Actually what we have done is paid off almost all the Reverse, and now have a growing, non- cancellable line of credit. Currently growing at 4% and it is tax free, and we can access it when and if we choose
@@randolphh8005 No, that is not how it really works. It depends on who is the survivor and how the partnership is established. Partners and often widows do not get to stay. Read the small print. Our friends did not, and when he died, she became homeless and broke.
@@AllysonJFlagg that was true in the past, but no longer for government insured HECM. There are still private bank reverse mortgages and those may have different rules. Because of all the past problems the true HECM is highly regulated and insured and requires extensive independent counseling. They are now completely legitimate and even allow a non-borrower spouse to remain in the home if the borrowing spouse leaves. They can be cancelled and refinanced by the borrower. It is not the same program that existed 10 years ago. The title never goes to the bank and it is a non-recourse mortgage. As presently set up it is a great program for those with home equity, that they want to access, or to eliminate mortgage payments.
It depends on what type of reverse mortgage is on the property. A HECM FHA reverse mortgage will give 90 day increments to sell the property. If they see you are not actively listing the property than additional 90 day extensions may not be permitted. If you are actively listing the property, additional extensions will be permitted, I've up to a year with extenuating circumstances. However, if you tell the lender you are fixing up the property before listing, you probably won't get extensions since sometimes family runs out of money or go over budget and the lender ends up with a property they have to pump money into to get it marketable. Non FHA HECM lenders do not have to give extensions. They will work with you but if they feel feet are being dragged to sell the home, they may not grant an extension. It's important to know which type of reverse mortgage lender owns the loan.
🏆🎉🙏 I would welcome the opportunity to interview you for my clients! This video will help seniors embrace your wisdom and experience with your reverse mortgage. I’m going to make sure I set up a link so people can get the correct information. You are someone with experience and the correct knowledge about the power of a reverse mortgage . Thank you for your continued educational videos and helping the senior community.
This man is a financial advisor??? He sounds like a reverse mortgage hustler to me. Get informed & independent advise from a trusted real estate lawyer prior to getting into a reverse mortgage and don't listen to Doug Andrew!
Sorry you feel that way Wayne. Depending on the state you reside, real estate lawyers are not licensed to give advice on mortgage products. I've seen the reverse transform people's lives. You make an excellent point in getting informed. Ask questions, get educated. A reverse may not be an answer to every situation. I applaud Mr. Andrew for embracing the reverse mortgage and encouraging people to educate themselves to see if it is something that will help them. He is one of the few advisors who embrace it. Most advisors don't. Advisors from large brokerages are only allowed to offer their products and not endorse anything else, per their compliance department. RIA advisors have been more receptive.
Totally agree with that. It's a last-resort for somebody who has outlived their retirement money. Should be avoided completely. Only should be applicable to somebody who is desperate and has no other resources.
I agree BUT if someone has no heirs and they are growing in age it’s not a bad idea. You die with an income that you never have to repay until home is sold. You can’t take a home with you after you die. But is it good to die with debt before God?
A reverse mortgage can be used to buy a home. A large down payment, no payments on the balance. It's a good fit for someone who is ageing in a two story house, and needs to move to a single story for safety reasons, but can't income qualify for a home loan for a new place. It can be used as a tool in a divorce and a way to pay to pay for ageing in place expenses. Affluent people are using it as well as a bucket of money not in the market, to dip into when their nest egg takes a hit. I will say though that the reverse mortgage used to be a bad deal and loans on the books prior to 8 years ago had unfriendly rules. Those loans still on the books will still be problematic unfortunately. New loans going forward have more protections in place. It is not a loan that fits every family dynamic for sure and should not be aggressively pushed on someone.
If you have children don't do it. When you pass away the home goes into foreclosure. If your children are not financially stable they will not be able to pay cash for the home or refinance the home because its under water. I am going through this because my mom passed away. I have to find some place to live. If your children live with you please don't do them like this. Dont get a reverse mortgage.
If you are not financially stable yourself, and your mother let you live with her, are you upset that you won't have a place to live anymore? Your mother's home doesn't automatically go into foreclosure. If you mother decided to stay in her home but couldn't afford to pay the mortgage payment, I assume you were paying some kind of rent. Did your mother get cash money at closing of the loan, or has she been getting money all along? What happened to that money? I thought the idea of a reverse mortgage was to eliminate the monthly mortgage payments so that the borrower wouldn't have to skimp on food, meds, etc. But many times, the parents are coerced into giving their adult children the money they receive from the reverse mortgage, in sort of an advance inheritance. I know of a situation like that. Why are you "not financially stable"? Did you not save any money while you lived with your mom? That money went somewhere. If she had a regular mortgage, would you have been able to have kept up those mortgage payments? If you are disabled and have been living in your mom's house, I thought there was a period of 12 months (in my state) that any spouse or perhaps a disabled adult child had before they had to vacate.
@Pretty Natural, the reverse mortgage is a non recourse loan. Meaning that your children or any heirs are not left liable for any loss. Your heirs actually can purchase the home for 95% of the appriased value after you pass away or they can sell the home and keep any remaining equity or they can walk away if the home is underwater. Everyone's situation is different and so are their financial needs. It's always smart to find a mortgage broker you can trust to help you with a reverse mortgage
Thank you Dough! Wishing you good health to continue educate us. I’m 62 years old female still working, waiting to be eligible for Medicare at 65. I appreciate for your video. 🙏🏼
Doug, we really enjoyed this video on reverse mortgages! You mentioned you and your wife were going through the process of getting a reverse mortgage. Who did you elect to go with? I know there are many companies out there doing them, and we wanted to make sure we were dealing with a reputable one. We've been following you for years since seeing you in person back in early 2000's, and we respect your ideas and decisions. Thanks!
Hey Daniel, I know you didn't pose me with the question to me, but I would recommend Finance of America. I'm a broker and they are one of only two companies out of dozens that i've brokered for where I feel they actually care and treat people like more than a number. hope it helps
You better check with BBB first and read the complaints on "Fiance of America".. Read before you sign!
@@diannjohnson7675 There is way more things to consider besides eliminating the mortgage payments. You people reading my comment need to look beyond temporary financial relief thinking you will worry about the rest later. If your reverse mortgage is not going to be enough to last you until you are dead then you’d better damn well downsize now. Be smarter than people promoting reverse mortgages. You could run out of money and equity. Then you are doomed. Consider keeping your ideas based in reality , your reality. If you are 85 you are much more suited for a reverse mortgage than someone 70 years old. You would be in better financial shape if you are 85 and the monthly payments cover cost of mortgage, and taxes, and insurance and maybe even some utility bills. Just eliminating the mortgage may not help you nearly enough. Think about it.
@@dominicalvarez9053 I am a Mortgage Broker in Florida, and this is the lender I use to fund my client's reverse mortgages.
Hey Doug. Thank you so much for this informative take and dispelling some of the misinformation out there. Reverse mortgages are a focus of my mortgage brokerage and have helped many families, including my own mother before she died. Like any other product, do your due diligence and look at all sides.
Really great data as we contemplate this option
Glad to hear it!
Doug, what about a conventional loan? I haven’t heard anyone mentioned it for a Reverse mortgage. I have listened to a few clips on FHA LOANS… Thanks for your input and keep helping us all understand this method.
A reverse mortgage is not a conventional loan
The HECM reverse mortgage is in the family of FHA loans nor is it a conventional loan. There are other reverse mortgages that are not FHA HECM's but they are still not conventional loans. Income qualifying for a reverse mortgage is much different than a conventional loan. The monthly mortgage payment isn't taken into account when income qualifying for a reverse mortgage, so right away your loan qualifying power goes up. The trade - off is the interest that accrues each month on a reverse, if gone unpaid (you can make payments in any amount as often as you like), gets tacked on to the balance of your loan and gets paid once your home sells or the loan gets refinanced.
What happens when the 9x fraction creation is returned to the bank by the loanee? Do the commercial bank keep the newly created money or do they have to return part to the central bank?
What happens if the house is in really poor condition? Obviously, the value will be low considering all the work that will need to be done. Will the lender still offer a reverse mortgage in that scenario to be able to use the equity for repairs?
I need advice on reverse mortgage property inheritance and capital gain tax today
Hey there, you can setup a time to speak directly to an IUL Professional we work with here: www.3dimensionalwealth.com/getstarted
Very informative! Thank you!
The cash on the RM being paid to a retired client on SSI; is it considered income by the SSI department?
nope
It is not income since you didn't earn it. For this reason it doesn't affect Medicare or Medicaid as well.
Doesn't mention the line of credit option which for me, is the best choice for tapping the money you'd get from a reverse mortgage. I'm considering getting one in the future. Right now, because of rising interest rates, I'd qualify for less money. The pro of higher interest rates is the line of credit will accrue more money. I'd ideally like to take a reverse mortgage approx. 3-4 years before my 401k funds run out. I'm 66 and don't anticipate that time for around 5-7 years.
Kids: No we don't want your house mom and dad please give it to Doug instead.
Thx for info!
Took out an RM as a pension for spouse ( now 77) after my death. After nine years it grew to $450,000. No draws. The house is worth north of 550. Suggestions🧙♂?
So, one has To. Be older than 62 to do a Reverse mortgage?!
But, yet the taxes. As well as, the house insurance still needs to get paid? That does make sense. And finally one would, of course, only pay back "the Reverse mortgage," if one sells their home.
But, if you stay in your home, then you don't pay back the "Reverse Mortgage."! Great!
Got it!
NOTHING is 'great' about a RM. DO NOT get one!.
No. There are 55 and over reverse mortgages that are now available. They have different guidelines than the HECM FHA reverse mortgage which have a minimum age of 62. Property taxes, and property insurance (not earthquake) you are responsible for paying.
"stay in your home" has a few nuances. You can't travel or live outside of the house for more than 2 months. If you break a hip and go into rehab for 6 mos, I think you can be in danger of losing.
@@waitaminute2015 You can travel and live outside of your home that has the reverse mortgage on it the caveat is that you must reside in the home for at least 6 months and 1 day per calendar year. If the last living borrower goes to a rehab facility for more than 12 consecutive months, that would cause a loan maturity event. The key is consecutive months. If they came home for a month in between surgeries or rehab stays, that re-starts the 12 month clock.
@@KevinWaltonReverseMortgages I see. Thank you
Great video Doug. Question: There are some articles and RUclips videos that say at age 55, one can get a HECM due to some changes in the law back in 2021. Did the changes actually take effect or is it a lie? Pls advise.
Hello Ajay, there is a reverse mortgage loan that is not a HECM, that is available for homeowner's age 55. No changes to any law, it's a different loan product. The HECM is in the family of FHA loans. The 55 and over reverse mortgage is not an FHA loan and it has differing loan guidelines than the HECM. I do reverse mortgages for a living. I too am a Doug Andrew fan!
To contrast, Doug, who wouldn't a RM be good for???
EVERYONE wants to know what percentage of their equity will they get in a lump sum payment (on average) and how much will their payments be and what will make their monthly payments go up and you didn't even mention that. NEXT.
Starts at 4:30
Thank you
Great knowledgeable information!
Humm, didn't really highlight the cons. There are actually other things to consider. For example if your health changes as you age and you need to move. Downsizing should have been seriously discussed. Downsizing and making some good investments or buying a place with an inlaw suite to rent out.
What if you outlive your life expectancy? Also, if you are in a nursing home for 12 months healing from a fall, sounds to me the loan comes due. Not a good plan, folks.
Do people spend 12-months in a nursing home healing from a fall? I'd think eventually, they rehabilitate at home. Also, the lender sends an annual certification of primary residence. All the homeowner would have to do is check the box, assuming the home owner intends to go back home.
If you outlive your life expectancy, you still get to stay in the home (as long as it stays as your primary residence) without making monthly payments. The nursing home stipulation is 12 consecutive months. If you are able to come home for a span than have to go back for another surgery, that restarts the 12 consecutive clock. Also if there is a remaining borrower who is also on the reverse mortgage loan, even though one borrower is in a nursing home for 12 consecutive months, the other gets to stay in the property, it doesn't have to be sold.
You don’t understand an HECM. You can stay in your home till you die, period. If all parties leave the home for more than one year, the mortgage becomes due, but you can never be upside down or evicted, as long as you pay taxes and insurance just like any mortgage.
Actually what we have done is paid off almost all the Reverse, and now have a growing, non- cancellable line of credit. Currently growing at 4% and it is tax free, and we can access it when and if we choose
@@randolphh8005 No, that is not how it really works. It depends on who is the survivor and how the partnership is established. Partners and often widows do not get to stay. Read the small print. Our friends did not, and when he died, she became homeless and broke.
@@AllysonJFlagg that was true in the past, but no longer for government insured HECM. There are still private bank reverse mortgages and those may have different rules. Because of all the past problems the true HECM is highly regulated and insured and requires extensive independent counseling. They are now completely legitimate and even allow a non-borrower spouse to remain in the home if the borrowing spouse leaves. They can be cancelled and refinanced by the borrower.
It is not the same program that existed 10 years ago. The title never goes to the bank and it is a non-recourse mortgage.
As presently set up it is a great program for those with home equity, that they want to access, or to eliminate mortgage payments.
I guest I missed the CONS.
You better move fast in getting that extra money when selling the house , I was told you have 30 days! That could be a problem. What do you think?
A closing agent handles the sales transaction. Lender is paid what is due and balance goes to seller/seller's estate.
It depends on what type of reverse mortgage is on the property. A HECM FHA reverse mortgage will give 90 day increments to sell the property. If they see you are not actively listing the property than additional 90 day extensions may not be permitted. If you are actively listing the property, additional extensions will be permitted, I've up to a year with extenuating circumstances. However, if you tell the lender you are fixing up the property before listing, you probably won't get extensions since sometimes family runs out of money or go over budget and the lender ends up with a property they have to pump money into to get it marketable. Non FHA HECM lenders do not have to give extensions. They will work with you but if they feel feet are being dragged to sell the home, they may not grant an extension. It's important to know which type of reverse mortgage lender owns the loan.
@@KevinWaltonReverseMortgages any home will sell no matter the condition for the right price.
👍👍✌️
🏆🎉🙏 I would welcome the opportunity to interview you for my clients! This video will help seniors embrace your wisdom and experience with your reverse mortgage.
I’m going to make sure I set up a link so people can get the correct information. You are someone with experience and the correct knowledge about the power of a reverse mortgage . Thank you for your continued educational videos and helping the senior community.
This man is a financial advisor??? He sounds like a reverse mortgage hustler to me. Get informed & independent advise from a trusted real estate lawyer prior to getting into a reverse mortgage and don't listen to Doug Andrew!
Sorry you feel that way Wayne. Depending on the state you reside, real estate lawyers are not licensed to give advice on mortgage products. I've seen the reverse transform people's lives. You make an excellent point in getting informed. Ask questions, get educated. A reverse may not be an answer to every situation. I applaud Mr. Andrew for embracing the reverse mortgage and encouraging people to educate themselves to see if it is something that will help them. He is one of the few advisors who embrace it. Most advisors don't. Advisors from large brokerages are only allowed to offer their products and not endorse anything else, per their compliance department. RIA advisors have been more receptive.
No pros in RM
Totally agree with that. It's a last-resort for somebody who has outlived their retirement money. Should be avoided completely. Only should be applicable to somebody who is desperate and has no other resources.
I agree BUT if someone has no heirs and they are growing in age it’s not a bad idea. You die with an income that you never have to repay until home is sold. You can’t take a home with you after you die. But is it good to die with debt before God?
@@melissaneal2425 good point
@@melissaneal2425 --your example may be the ONLY one where a RM MAY be OK; otherwise avoid RM like the plague.
A reverse mortgage can be used to buy a home. A large down payment, no payments on the balance. It's a good fit for someone who is ageing in a two story house, and needs to move to a single story for safety reasons, but can't income qualify for a home loan for a new place. It can be used as a tool in a divorce and a way to pay to pay for ageing in place expenses. Affluent people are using it as well as a bucket of money not in the market, to dip into when their nest egg takes a hit. I will say though that the reverse mortgage used to be a bad deal and loans on the books prior to 8 years ago had unfriendly rules. Those loans still on the books will still be problematic unfortunately. New loans going forward have more protections in place. It is not a loan that fits every family dynamic for sure and should not be aggressively pushed on someone.
If you have children don't do it. When you pass away the home goes into foreclosure. If your children are not financially stable they will not be able to pay cash for the home or refinance the home because its under water. I am going through this because my mom passed away. I have to find some place to live. If your children live with you please don't do them like this. Dont get a reverse mortgage.
If you are not financially stable yourself, and your mother let you live with her, are you upset that you won't have a place to live anymore? Your mother's home doesn't automatically go into foreclosure. If you mother decided to stay in her home but couldn't afford to pay the mortgage payment, I assume you were paying some kind of rent. Did your mother get cash money at closing of the loan, or has she been getting money all along? What happened to that money? I thought the idea of a reverse mortgage was to eliminate the monthly mortgage payments so that the borrower wouldn't have to skimp on food, meds, etc. But many times, the parents are coerced into giving their adult children the money they receive from the reverse mortgage, in sort of an advance inheritance. I know of a situation like that. Why are you "not financially stable"? Did you not save any money while you lived with your mom? That money went somewhere. If she had a regular mortgage, would you have been able to have kept up those mortgage payments? If you are disabled and have been living in your mom's house, I thought there was a period of 12 months (in my state) that any spouse or perhaps a disabled adult child had before they had to vacate.
@Pretty Natural, the reverse mortgage is a non recourse loan. Meaning that your children or any heirs are not left liable for any loss. Your heirs actually can purchase the home for 95% of the appriased value after you pass away or they can sell the home and keep any remaining equity or they can walk away if the home is underwater. Everyone's situation is different and so are their financial needs. It's always smart to find a mortgage broker you can trust to help you with a reverse mortgage
Shouldn't you have your own place anyway? Did you always live with your mom?