Reverse Mortgages: Good or Bad?

Reverse Mortgages for Seniors
A reverse Mortgage is a financial tool that turns a borrower’s home equity into cash. According to Ben Lucero of Indigo Mortgage, “The reverse mortgage is one of the best and most advantageous mortgage programs available today. There has been a lot of negative publicity about the reverse mortgage but that misconception has more to do with unscrupulous lenders than the actual benefits of the loan itself.”

In fact, there are many benefits to the reverse mortgage. One of the greatest of these is that the borrower never has any mortgage payments, and the mortgage pays itself from the equity. Borrowers are able to eliminate payments while still keeping the title of their property. The money that is taken out is tax free, and remaining equity goes to their heirs instead of the bank. Additionally, the loan is insured by FHA.  All the closing costs of a reverse mortgage are included in the loan, and there should not be any upfront charges besides an appraisal. There are no income restrictions or credit requirements, but the borrower must be at least 62 Years of age to qualify.

Local vs. Out-of State Lenders

If someone is considering a reverse mortgage in the Albuquerque area, it is in their best interests that they consider using only a local lender such as Indigo Mortgage and never an out of state lender. Also, they should never reply to any solicitations in the mail or on the internet. To better understand the reverse mortgage and the process of obtaining one, seniors should set an appointment with their local lender of choice and bring along their family. All seniors interested in a reverse mortgage must take a counseling session on reverse mortgages before they can actually take one out.

Counseling Sessions

As is mentioned above, all prospective borrowers are required to go through a reverse mortgage counseling session by a nonprofit HUD approved organization to ensure that the borrower fully understands the reverse program and what they are signing up for. This can be done over the telephone, but it is important to know that we as lenders cannot go into an application until after the senior completes this counseling session.

If you are considering a reverse mortgage, please contact Indigo Mortgage to discuss any further mortgage questions you might have.