Welcome to our educational videos page.  This collection of short videos is designed to provide a quick introduction to many Reverse Mortgage topics.  Before or immediately after you watch these videos we strongly recommend you continue down the page to a more comprehensive explanation of Reverse Mortgage details or visit our Reverse Mortgage page. Also, please call us at 1-866-840-0279 or Contact Us to connect with a GoodLife Reverse Mortgage Specialist who can answer any questions for you.  Our goal is to make sure that a reverse mortgage is the right loan, for the right person, at the right time, and for the right reason.   The videos are helpful, but the only way to make sure a reverse mortgage is right for you is to call us so we can see if a reverse mortgage is suitable and appropriate for your situation.

 

What Is A Reverse Mortgage?

This video explains how a reverse mortgage lends you money against the value owned in your home.

 

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Reverse-Eligible Types of Homes

This video shows the types of homes that may qualify for a reverse mortgage

 

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Want to learn how much you might qualify for with a reverse mortgage? Fill out our Reverse Mortgage Calculator today!

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Reverse vs Home Equity Loan

This video compares how reverse mortgages and home equity loans both use equity as collateral.

 

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Reverse, Heirs & Estates

As this video shows, reverse mortgages do NOT encumber heirs or estates with debts.

 

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Education is Key Ask Nelson Mandela

Learn about the importance of education in all stages of the reverse mortgage process.

 

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Reverse Mortgage Amounts

This short video explains the factors on which reverse mortgage loan amounts are based.

 

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Reverse Mortgage Payments

Payment schedules and restrictions for a reverse mortgage are explained in this short video.

 

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Retirement Planning is Key Ask Winston Churchill

This video goes over why it is important to plan ahead for retirement.

 

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Reverse & Existing Mortgages

As this video explains, you may qualify for a reverse mortgage with an existing mortgage on the

 

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Reverse Mortgage, Social Security, Medicare & More

Learn how reverse mortgage payments bear on Social Security, Medicare, SSI and Medicaid.

 

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Suitability is Key - Must Have The Right Stuff

Learn how GoodLife works to determine if a reverse mortgage is right for you.

 

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Reverse Circumstances To Consider

Understand the circumstance in which you might consider alternatives to a reverse mortgage.

 

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Understanding Reverse Mortgage Interest

Get a clear picture of reverse mortgage interest from this short video.

 

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Reverse Mortgage Repayment

Get a clear picture of the events upon which a reverse mortgage is called and payable.

 

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The most common type of reverse mortgage is known as the Home Equity Conversion Mortgage, or HECM. We use the term reverse mortgage and HECM interchangeably on our website. Please understand, these very brief videos do not provide a full explanation of each of the subjects they portray and are intended only as an introduction. You should understand that there are many factors to consider before deciding whether a HECM is right for you and we encourage you to contact our GoodLife Reverse Mortgage Specialists to answer any questions you have.

 

A reverse mortgage is a loan and as is the case of any loan, there are borrower and property eligibility, and financial assessment requirements that must be met.

 

 

Borrower Eligibility

 

As a Borrower you must:

 

  • Be 62 years of age or older;
  • Own your home outright or paid-down a considerable amount of your mortgage*;
  • Occupy the property as your principal residence;
  • Not be delinquent on any federal debt
  • Have financial resources to continue to make timely payment of ongoing property charges such as property taxes, insurance and Homeowner Association fees, etc.; and
  • Participate in a consumer information session given by a HUD- approved HECM counselor.

 

*You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.

 

 

Property Eligibility

 

The following eligible property types must meet all Federal Housing Administration (FHA) property standards and flood requirements:

 

  • Single family home or 2-4 unit home with one unit occupied by the borrower;
  • HUD-approved condominium project;
  • Manufactured home that meets FHA requirements;

 

 

Financial Assessment

 

In addition, a financial assessment of your willingness and ability to pay property taxes and homeowner’s insurance, and any other obligation that could become a lien on the property, will be conducted. As part of the financial assessment:

 

  • Your income, assets, monthly living expenses, and credit history will be verified.
  • Your payment of real estate taxes, hazard and flood insurance premiums will be reviewed and verified.
  • The financial assessment may determine whether a set-aside for taxes and/or insurance will be required.

 

 

Payment Options

 

Depending upon whether you choose an adjustable interest rate or fixed rate reverse mortgage, you may have options on how you receive your reverse mortgage loan proceeds. For adjustable interest rate reverse mortgages, you can select one of the following payment plans:

 

  • Tenure – equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
  • Term – equal monthly payments for a fixed period of months selected.
  • Line of Credit – unscheduled payments or in installments, at times and in an amount of your choosing until the line of credit is exhausted.
  • Modified Tenure – combination of line of credit and scheduled monthly payments for as long as you remain in the home.
  • Modified Term – combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.
  • For fixed interest rate mortgages, you will receive the Single Disbursement Lump Sum payment plan.

 

 

Reverse Mortgage Amount

 

The amount you are able to borrower under the reverse mortgage will depend on:

 

  • The age of the youngest borrower or eligible non-borrowing spouse;
  • The current interest rate; and
  • The lesser of:
    • appraised value;
    • the HECM FHA mortgage limit of $765,600; or
    • the sales price (only applicable to HECM for Purchase)

 

If there is more than one borrower and no eligible non-borrowing spouse, the age of the youngest borrower is used to determine the amount you can borrow.

 

 

Reverse Mortgage Interest

 

As you get money through your reverse mortgage, interest is added onto the balance you owe each month and in turn accrues interest. That means that the amount you owe grows over time.

 

 

HECM Costs

 

You can pay for most of the costs of a HECM by financing them and having them paid from the proceeds of the loan. Financing the costs means that you do not have to pay for them out of your pocket. On the other hand, financing the costs reduces the net loan amount available to you. A HECM loan includes the following common fees and charges:

 

  1. mortgage insurance premiums (initial and annual)
  2. third party charges
  3. origination fee
  4. interest
  5. servicing fees

 

You will be charged an initial mortgage insurance premium (MIP) at closing. The initial MIP will be 2%. Over the life of the loan, you will be charged an annual MIP that equals 0.5% of the outstanding mortgage balance. The mortgage insurance guarantees that you will receive expected loan advances.

 

 

Third Party Charges

 

Closing costs from third parties can include an appraisal, title search and insurance, surveys, inspections, recording fees, mortgage taxes, credit checks and other fees.

 

 

Origination Fee

 

You will pay an origination fee to compensate the lender for processing your HECM loan. A lender can charge the greater of $2,500 or 2% of the first $200,000 of your home’s value plus 1% of the amount over $200,000. HECM origination fees are capped at $6,000.

 

 

Servicing Fee

 

Lenders or their agents provide servicing throughout the life of the HECM. Servicing includes sending you account statements, disbursing loan proceeds and making certain that you keep up with loan requirements such as paying real estate taxes and hazard insurance premium. Lenders may charge a monthly servicing fee of no more than $30 if the loan has an annually adjusting interest rate or has a fixed interest rate. The lender may charge a monthly servicing fee of no more than $35 if the interest rate adjusts monthly. At loan closing, the lender sets aside the servicing fee and deducts the fee from your available funds. Each month the monthly servicing fee is added to your loan balance. Lenders may also choose to include the servicing fee in the mortgage interest rate.

 

 

Due and Payable Events

 

A reverse mortgage becomes due and payable when:

 

  • The borrower sells the home or conveys title to someone else;
  • The last surviving borrower passes away;
  • All borrowers reside outside of the principal residence for a period exceeding 12 consecutive months due to physical or mental illness;
  • The borrower fails to pay property taxes, insurance premiums, condo fees,  and other “mandatory obligations,” and all options to bring the loan current have been exhausted; or
  • The borrower fails to maintain the home and allows it  to fall into disrepair.

 

 

Non-Recourse and Heirs of the Borrower

 

A reverse mortgage is a non-recourse loan, which means the sole recourse for collecting the loan is a legal action against the property itself and neither the borrower, the borrower’s estate or the borrower’s heirs have personal responsibility for payment of any deficiency (or the difference between the value of the home and the full amount of the reverse mortgage debt).

Want to learn more about how a reverse mortgage can help your future? Download our Comprehensive Guide to Reverse Mortgages today!

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