Your Home Town Reverse Mortgage Team
Jack and Tana Tenold
Jack and his wife Tana met at Lewis & Clark High School in Spokane. He is the licensed mortgage originator who can answer all of your questions. Tana is the office manager who keeps everything running smoothly! Tana says “Jack will always give you an honest answer”!
Reverse Mortgage Questions Others Have Asked:
Reverse mortgages provide a safe option for many people age 62+. Most reverse mortgages done today are insured by the FHA so there is the full backing of that agency in the event a lender goes bankrupt or cannot perform as it has promised. Here are answers to some common questions.
Q: Will the bank own my home?
A: No, the bank does not own your home. You are the owner and will always be the owner and you decide how long you wish to remain in your home. Of course, you still pay home insurance, property taxes and HOA dues (if any), and must continue to maintain your home. When you or your heirs sell the home, the loan balance including any accrued interest is paid and any remaining equity goes to you or your heirs just like with any other loan.
Q: How much can be borrowed?
A: The amount available is based on the following:
1. Age of the youngest borrower
2. Current appraised value of your home
3. Current interest rates for a reverse mortgage
The amount you tell us is what we will use to make a preliminary calculation of “how much you can get”. But an independent appraiser comes to your home to determine the current value in today’s market. The underwriter will review the appraisal, and we will use the underwriter’s value to re-calculate the actual loan amount. Jack will take care of all of this and answer any questions you may have.
Q: Do I get all cash or do I receive monthly payments to me?
A: It’s your choice! You choose from the following options:
1. One lump sum of cash
2. A monthly payment
3. A line of credit
4. Or a combination of the above options
Jack can show you the various options available in your situation.
Q: Can I do a Reverse Mortgage if I have a current mortgage or other liens on my home?
A: Yes you can, assuming you have sufficient equity. The first dollars from the reverse mortgage will go to pay off mortgages, lines of credit secured by your home and any other liens of record. The balance remaining then goes to you. Many people that we work with take out a reverse mortgage to eliminate monthly payments on their current mortgages or even pay off car loans and credit cards. However, only items that are secured by your home absolutely must be paid off.
Q: I can’t qualify for a regular mortgage. Will that be a problem?
A: There are no credit score or income requirements. You don’t have to qualify like you would with a regular mortgage. You make no monthly mortgage payments so proof of your income and credit score are NOT required. A credit report is used to check if there are any liens against your property like an IRS tax lien that might affect title to the property.
Q: Will my children lose out if I do a Reverse Mortgage?
A: If two of you are on the Reverse Mortgage the loan is repaid once the last person permanently moves out of the home. Usually the home is sold and the balance plus accrued interest and any fees are paid out of the proceeds. The balance or remaining equity will go to your children and/or other heirs. Of course your children could choose to keep the home and then they would pay whatever was owed against the mortgage at that time. They could pay that amount in cash or possibly refinance the home if they qualified at that time.
Q: What will my monthly payment be on a Reverse Mortgage?
A: There NO monthly mortgage payments, EVER. You are responsible to pay taxes, homeowners insurance, HOA dues if any, and maintain your home just like you do now. The loan is repaid when the last person on the loan (borrower) leaves.
Like the name implies a reverse mortgages grows larger over time. Since you are making no monthly payment your balance increases. The amount owed when the last person on the reverse mortgage vacates the home (doesn’t live there permanently) is paid off at that time.
Q: What is the actual process for getting a Reverse Mortgage?
1. Talk with Jack! He will help you determine if a reverse mortgage is a good option for you and see if you qualify.
2. Jack will help you fill out the paperwork. He will show you all of your options and answer all of the questions you, your spouse, family and financial advisor may have. There are many options for you to choose from.
3. Counseling is required by HUD. (Department of Housing and Urban Development). FHA runs the program under HUD and they regulate the requirements. They have a list of approved counselors which we will provide to you and you choose one. The counselors set their own fee schedule but currently the typical amount is $125. However, the counseling agencies are the ones that set that fee, not us.
4. Appraisal and Inspection. After your counseling is completed and Jack provides you with all the required disclosures and takes your application, an appraisal of your home will be done. This is required in order to determine the amount available on a reverse mortgage and to make sure that your home meets FHA guidelines. The appraiser sets their own fees but typically it runs around $480. This amount can and does vary. If the appraiser uncovers questions about your home there may be other inspections that will require additional fees. Every home is unique and there is no way to determine this in advance.
5. Underwriting. You may have heard this term before. It is just a process where all of the requirements of the loan are reviewed to make sure everything is in the file and that all guidelines are met.
6. Closing. This is when you sign all of the final documents. We will coordinate everything to make it easy for you.
7. Receiving the money. You will have your money approximately three days after you sign the final documents. Any liens against your home and other debts you would like included are paid. There will be no mortgage payments for as long as any of the borrowers live in the home.
8. Repayment. There will never be a monthly mortgage payment to your lender. A reverse mortgages becomes due when the person on the loan no longer occupies the home. When death of the last person on the reverse mortgage occurs, the heirs (children) or the estate may repay the loan from the sale of the home or refinance the home just like with any other home loan.
9. What if there is a shortfall at that time? Reverse mortgage loans are non-recourse loans. Neither you nor your estate have to pay the bank for a shortfall. The bank will file a claim with the FHA if there is one.
Call Jack – 509-623-1623 or Toll Free 1-800-617-3105