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Reverse Mortgage Explanation

Reverse Mortgage Explanation

Apr 7, 2016

What is a Reverse Mortgage?

We are starting to hear and see more ads for reverse mortgages and touting the benefits of them.Reverse Mortgage Loans, Budget, Finances on Cape Cod

Reverse Mortgages essentially pay the mortgagee rather than the other way around. The amount that the lender is willing to lend is determined by the amount of equity available in the home the mortgagee owns. That is the simplified version.

Here are a few more details:

Q: How do I qualify?
A: Eligible property types include single-family homes, 2-4 unit properties, manufactured homes (built after June 1976), condominiums, and townhouses. Co-ops do not qualify. Other qualifications: You must own the home, be at least 62 years old, and have enough equity in your home for the lender to lend on.

Q: I have an existing mortgage. Can I qualify?
A: The answer is you may, but the reverse mortgage must be the first lien on the property. So, the first mortgage must be paid off whether it is with the reverse mortgage or by other means.

Q: What about my government assistance?
A: There are some types of assistance it may affect. To be safe, you should contact the local Area Agency on Aging or a Medicaid expert.

Q: What types of payment plans are available?
A: You can choose from several: lump sum, fixed monthly, access as a line of credit or a combination of these.

Often times there is a restriction in how much can be accessed within the first 12 months.

Q: Can I buy a car with the proceeds?
A: You can! Proceeds can be used for most anything: renovations to your home, paying bills, simply to supplement your income, pay off credit cards, etc, etc.

A reverse mortgage may not be your best option though so make sure you do your research. They are expensive up front and eat up the equity in your home which could be an issue down the road.

Contact your lender to discuss what would be best for you. If you need the name of someone we can certainly suggest someone. Call us any time at 508-258-9010.

USDA Loan Availability on Cape Cod

Feb 16, 2013

USDA Loans

USDA loans on Cape Cod are no longer going to be available to the towns of Barnstable, Bourne, Dennis, Falmouth, Harwich, Mashpee, Sandwich and Yarmouth. This change, according to the mortgage rep that gave us the information, is going to take place on February 28, so there is still time, but not much.

There are a lot of sites that state they are the “official” site, but this is the “real one”: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

USDA loans are great for those that qualify.  The one issue I have seen come up is that the appraisal is a much more in depth process and becomes something of an inspection.  Here is a document outlining some of the guidelines: http://www.rurdev.usda.gov/Publications/WI-RHS-Originator-Manual-Section-3-Property-Eligibility.pdf

Any repairs found, under the USDA guidelines, by the home inspector, pest inspector or appraiser will, typically have to be completed prior to closing. Because of this process, USDA loans are not ideal for homes that need quite a bit of work.

If you have questions concerning USDA loans give us a call.  We can put you in touch with a mortgage representative who is knowledgeable about them.

Bank of America Mortgages

Oct 12, 2012

Bank of America has Sold Your Mortgage…What Does that Mean?

 

Within the last couple of weeks Bank of America has been sending letter to homeowners letting them know that there is a new servicer for their loan.  The one I am personally aware of is Seterus, but have also heard that Homeward and SPS (Select Portfolio Servicing) are others.  What that means is that they are no longer responsible for handling the loan.  If you are making payments, make sure they go to the right place!

 

Are You Involved in A Short Sale?

 

If you are involved in a short sale transaction, this could and probably will cause delays.  BOA has to transfer documents to the new servicer before the ball can get rolling again and I am hearing that BOA isn’t always doing so in a timely manner.   If you have an offer in negotiation it depends how far along things are as to the result of the changeover.  If the offer is newly submitted to BOA then you will probably have to start from scratch with the new company.  If there is a letter of approval and the closing is eminent then there is a chance the new company will approve the short sale and allow the property to convey.  The bottomline is that you will probably face delays and it is important for your agent to contact all parties and communicate with them so no one is surprised by it…there is enough of that in short sale transactions already.

 

A Letter at Your Doorstep…What Now?

 

Let your agent, attorney or negotiator know who the new servicing company is.  BOA should be transfering documents over to the new company, but you want to be proactive by contacting them quickly and requesting the appropriate documents they need for the short sale file and ask them what they have.   Has there been a recent BPO done on the property…that should be one of the files transfered and the new company will wait on that before negotiating on any submitted offer that is not already approved.  At least you can get your part done.  It also doesn’t hurt to have whoever is negotiating with BOA on your side to contact BOA for an update on the file transfer.

 

Our Best Advice

Be Proactive!  That is something our team stresses all the time. There is only so much that is within your control in these types of situations, but it is very important to have people helping you that know the short sale process.  If you have any questions we would be happy to help! 508-258-9010 or [email protected] .