EquiPoint Financial Network - Reverse Mortgage Specialists

Safeguards and Examples

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Consumer Safeguards

Goverment Loan

Reverse Mortgage loans were designed by the U.S. Department of Housing and Urban Development (HUD) in the late 1980's from the lobbying efforts of AARP. Most of the Reverse Mortgage loans made today are insured by the Federal Housing Administration (FHA); a goverment supported mortgage insurance program.

Counseling Required

To determine if reverse mortgage is appropriate
Borrowers must obtain independent counseling prior to obtaining a Reverse Mortgage. Counseling is only available from approved, independent, third-party sources and the counseling is designed to highlight and discuss:

  • Financial implications of obtaining a Reverse Mortgage.
  • Other options that may exist including housing, social service, health and financial programs.
  • Role and relationship between the homeowner and the lender, financial advisors, estate planning services, etc.
  • Allowable costs and expenses associated with Reverse Mortgages.
  • Typically it takes 1 hour for the counseling & the person receives a counseling certificate upon completion.

Limit on Fees

The U.S. Goverment regulates all fees involved in a reverse mortgage and guarantees borrowers that there are no "excessive fees" in a reverse mortgage.
Consumers have additional sources of nationally recognized providers that can be accessed for addtional information including:

Reverse Mortgage Examples

1. Mike and Wanda

Age:

Mike 71 & Wanda 70

Home value:

$150,000

Existing Mortgage:

$0

Location:

Tampa, FL

Equity:

$150,000

Mike & Wanda would receive a lump sum payment of $88,284 or monthly income of $539.

2. Don

Age:

Don 75

Home value:

$310,000

Existing Mortgage:

$50,000

Location:

Walnut Creek, California

Equity:

$260,000

Don would receive a lump sum payment or a credit line of $138,621 or monthly income of $836.00. Further, Don would not have this existing mortgage payment of $842 from the payoff of the existing mortgage on his house.

Note: The above examples were based on interest rates in the 2nd qtr of 2005

 

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