Linda Kay's Blog

Okay, so, we all know how a Regular Mortgage works.  The borrower can be any age, they have to qualify with income and fico scores.  Then after they close, they start making payments.

A Reverse Mortgage is a way for seniors age 62 or older to take a portion of equity out of their home. The proceeds are tax free and they do not have to make payments.  The loans are FHA governed therefore there are many rules to protect the seniors and their homes. 

A colleague of mine has decided that Reverse Mortgages are extremely more expensive than a traditional mortgage.  They really aren't.  If your client is purchasing a new home with a Reverse it's comparable to a Traditional Mortgage. Both have mortgage insurance, but in the case of a reverse, the insurance protects not only the lender but the borrower.  For instance, if your client had gotten into a Reverse three years ago with an equity line, obviously the value isn't the same.  However, because of the mortgage insurance, the line of credit would remain the same, not be lowered to the home value.

The only real difference is in the origination fee which is capped by FHA at $6,000.  Yes, it's a bit more than a regular mortgage, but it provides a service for seniors who may not qualify due to income or fico scores.  And let's face it, some seniors really need help, especially with the government cuts to their income and healthcare. 

Really, if it's the best or the only solution for your client, wouldn't you want that for them?  I would!

Okay, so I just know that if my momma had to be moved into a nursing home, it would literally kill her.  She has been in that same house since 1959 and it's simply her comfort zone.  But, if I had to take care of her myself, I couldn't work and help my family out.  So, the answer, is HOME HEALTH CARE.

Now I know she has "LONG-TERM CARE INSURANCE", but it really isn't going to be that big of a help, because obviously in-home care is extremely expensive.  So I would really be stuck between the proverbial rock and a hard place. If I were independently wealthy, I could just pay for it myself, but unfortunately, like so many other out there, it would break the back of my family's piggy bank.

A heartbreaking story, isn't it and it occurs way too often in this day and age and especially in this economy. But, there is GOOD NEWS; there is HOPE!

My momma owns her house outright and she's over the age of 62.  So literally, in this case, a REVERSE MORTGAGE would literally save her life.  I could put her home into a reverse line of credit and use that money to help offset what costs her insurance wouldn't cover. 

In my travels, I have run into similar stories, even in my short amount of time in this field.  A lady taking care of her sister after a massive stroke, a daughter who can take care of her father at night but must work during the day... and sometimes adult day care is not an option.

This is one reason I went into this field - no not for my momma, but to provide solutions to the vast and growing amount of seniors who truly need some form of financial security and help.

I hope if you run into anyone in your travels who is in need of help, you'll remember that the FHA reverse loan is a great option for those that need it!