A reverse Mortgage is a type of loan which allows homeowners, age 62 and older, to make their property equity into cash, while still living in and owning their residence. On this interview, Doni Dolfinger of Universal Lending, discusses the facts of receiving a reverse Mortgage on your own home.
Interviewer: Today, we're talking with Doni Dolfinger, a reverse Mortgage specialist, with Universal Lending, and Doni thanks for visiting the show.
Doni Dolfinger: Well, thank you so much, glad to get here.
Interviewer: Inside our previous segment, were talking a little bit about reverse Mortgages and we were continuing that, yet for all those not familiar with the phrase or what it's, is it possible to explain it?
Doni Dolfinger: Certainly, a reverse Mortgage is simply a loan against a borrower's home without to be paid back as long they live there. Its a loan without a Mortgage Payment.
Interviewer: Okay. Could they repay it, whenever they wanted?
Doni Dolfinger: Absolutely, and several people will use a reverse Mortgage with all the goal of paying it back, and so they will certainly make Payments at any time without penalty.
Interviewer: Someone might be telling themselves that sounds expensive, like it will require me to pay an increased interest rate or something to that particular affect, if you find lots of points upfront or, is always that true?
Doni Dolfinger: You know, they may be lot less expensive than they were in the past, yes inside years past, these were pricey, but we now have done a lot to change that. In reality there is a new program called Home Equity Conversion Saver, or HECM Saver, and it is for individuals that wish to take less cash upfront, but have less fees mixed up in transaction, so that it really helps people who are wanting to preserve more equity for your estate.
Interviewer: Alright, walk me through this. Say my mom did a reverse Mortgage and she perished.
Doni Dolfinger: Right.
Interviewer: At enough time she passed on, she owed hundreds of thousand dollars for the house as well as perhaps the house is worth one twenty, what are the results?
Doni Dolfinger: You know, usually if my customer dies the same happens that might happen over a normal transaction, even if they've got only a traditional loan for the property. Usually they will sell your house by calling an agent, listing your home while using realtor; the realtor will contact the title company. The title company orders the payoffs possibly at the settlement table, the check is then issued on the seller for what ever remaining equity is accessible. Reverse Mortgage Interviewer: Okay. When they were underwater, an amount happen?
Doni Dolfinger: FHA would pay the loss, so FHA is that is for the hook for the balance to the Mortgage Insurance, it is not the tax payers paying that loss, if there is one, its engrossed in the Mortgage Insurance
Interviewer: Alright, now mom's getting some income in, and she is worried it might affect her social security or it could affect her Medicare benefits.
Doni Dolfinger: Right.
Interviewer: She's concerned with, is she is going to get taxed onto it, what are the results there?
Doni Dolfinger: You realize, reverse Mortgage is not considered profits from the government. So that they are not taxed onto it. We have customers that are on SSI, old aged pension, even Medicaid that can be eligible for a this method. But, should your mom is on Medicare and Social Security, they don't need to be worried about the funds from the reverse Mortgage.
Interviewer: Alright, do i think the there any situation that mom's got a chance to watch out for?
Doni Dolfinger: You understand, I do believe this can be such a regulated program; we've got regulations not just on what we charge but they will need to go speak with a counselor to get it, to even obtain this sort of an application or loan. So, I do believe the primary thing I'd look out for is if there's somebody who is wanting to sell them a reverse Mortgage, and assist them to "Invest the money", that could be a warning sign.
Interviewer: Yeah! Last but not least so somebody says okay, this sounds good this may be an alternative for me. How can they do know if it is adequate?
Doni Dolfinger: Very first thing we intend to do is we will send these phones a FHA counselor, we let them have a listing of counselors and so they can pick which one they prefer to visit. The counseling is just made to assist the consumer using the inquiries to educate these with the pro and cons with the program, in order to make an educated decision.
Interviewer: Great information. Thanks so much for being here.
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