Purchase Reverse Mortgage or Post Sale Reverse Mortgage?

Seniors sold sign

I often see clients considering downsizing and selling their existing home to purchase a more modest home.

The decision: “Do I sell my existing home and pay all cash for the replacement home and THEN get a reverse mortgage line of credit or, do a reverse mortgage for purchase on the replacement home?

As well as being a licensed loan officer I am a real estate broker and have known in theory that it is risky to pay all cash on the new home and close escrow ASSUMING the replacement home will qualify for a reverse mortgage post sale, but have not had actual examples until, unfortunately, this year where I had several examples.

I did not meet with the individuals in these examples prior to the purchase of their replacement home; they came in post close of escrow to inquire about taking out a RM credit line. The sale of their prior home did not cover the price of the replacement home, causing them to dip heavily into savings accounts to pay all cash. In doing preliminary research on their properties I had to deliver the bad news: their replacement properties would not qualify for a reverse mortgage and they were shocked.

How could a reverse mortgage for purchase process, rather than paying all cash, have protected these folks? The RM for purchase process protects an individual via the real estate purchase contract contingency clause, giving them several weeks or more to go through the loan qualifying process with a loan officer, appraiser and underwriter working on their behalf to determine if the property and they will qualify for a RM. If the property and they receive loan approval they can confidently close escrow knowing their financing will be in place. However, if going through the process it is determined the subject property or they will NOT qualify for a reverse mortgage, the individual can walk away during the contingency period and not lose their earnest money deposit.

It’s wise to see a loan professional well in advance of selling an existing home and looking for a replacement as there are numerous RM pre-approval steps required.

 

Shawna McDonald, License Loan Officer, has completed hundreds of reverse mortgage loans and is approved with 10 reverse mortgage lenders. She is available by appointment. Sierra Foothills Reverse Mortgage 412 E. Main Street Suite N, Grass Valley, (530) 497-3010. Her website is www.SierraFoothillsReverse.com. NMLS #271335 | CalBRE #00585530 Borba Investments Inc. Company NMLS #76801 |Company BRE # 01446165 These materials are not from, and were not approved by HUD or FHA

 

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Reverse Mortgage Mid-Year Round Up ~ 2015

Seniors at the fair 1 It’s been a great week, the Nevada County Fair rocks !

seniors at the fair 2  Ok, back to business:

If you’d like more information about my local bricks and mortar reverse mortgage loan office serving Nevada County, Grass Valley, Nevada City and Penn Valley, click on this link: http://www.SierraFoothillsReverse.com.

      I’m always available with a same day return phone call: (530) 497-3010.

Here’s my newest blog post which will appear shortly in the local Union newspaper:

Reverse Mortgage Mid-Year Round Up ~ 2015

It’s true, today marks more than “mid-year”, but time flies so fast. I thought it a good time to discuss what the reverse mortgage landscape looks like after the new financial assessment requirement had been in place for a few months and discuss a recurring question I hear from clients:

The new Financial Assessment Requirement: Prior to April of this year a senior’s continuing ability to pay property taxes, insurance and (HOA dues if applicable) post completion of a reverse mortgage was not in question with the lender or HUD. (Housing and Urban Development sets the rules for reverse mortgages, FHA insures the loan). Starting in late April of this year all loan officers beginning a reverse mortgage loan application, be it for purposes of establishing a credit line, paying off an existing loan, or a purchase reverse, are required to document income and on-going household debt obligations to determine if the borrower(s) have sufficient monthly residual funds to budget for payment of property taxes and insurance. If not, we would, as part of the loan, need to set up a lifetime set aside for taxes and insurance, an “escrow” type of account.

I’m happy to report that none of my borrowers coming in to initiate a reverse mortgage and falling under the “new rule” have been required to set up such an account, I was able to document that they had were sufficient retirement income and history of on time payment for taxes and insurance. The new rule requires more work on my part, a bit of financial records digging for borrowers, but all in all, not a big deal.

Living Trusts, Revocable or Non-Revocable: Having just lugged a large trust binder into my office for me to scan, my borrowers were curious as to why a reverse mortgage lender needs to review a complete copy of their trust. The lender needs to determine if the trust is revocable, as in, can a change be made to the trust? If the trust is revocable the borrower(s) will sign a document at loan closing that states their trust recognizes the reverse mortgage obligation to be paid off upon the passing of the borrower(s). If the trust is non-revocable a reverse mortgage cannot be done, most trusts however are revocable.

Shawna McDonald Loan Officer, has successfully completed 100’s of reverse mortgages and is approved with 8 reverse mortgage lenders, ensuring clients receive low fees and great rates. Her full service office, Sierra Foothills Reverse Mortgage, is located at 412 E. Main Street Suite N, Grass Valley, (530) 497-3010. Her website is www.SierraFoothillsReverse.com.

The opinions expressed here are solely those of Shawna McDonald, Loan Officer/Real Estate Broker. Copyright © 2015. NMLS #271335 BRE # 00585530 DBA Sierra Foothills Reverse Mortgage and Borba Investments Inc, DBA MLS Reverse Mortgage Auburn, CA NMLS #76801 BRE #01456165 ~ HUD approved lender.

Who Really Has a Reverse Mortgage Office in Grass Valley, CA? Sierra Foothills Reverse Mortgage Does!

Sierra Foot Hills Reverse Mortgage Grass Valley Office Bricks and Mortar Here, Invested in the Community

The internet is a wonderful place for doing research, connecting with old friends, but it can be deceptive. I am a reverse mortgage specialist who has completed over 400 reverse mortgages earned partially by being licensed for many years in 9 states and working in a call center, tough work, but I gained a wealth of experience in those years of toil.

I came to Grass Valley in 2013 and opened Sierra Foothills Reverse Mortgage in downtown Grass Valley because I could see this was an area whose seniors were not being served by a specialty reverse mortgage loan company who could give them personal, one on one attention and expertise, while at the same time provide great loan pricing. Once I had opened Sierra Foothills Reverse Mortgage I immediately became a part of non-profit groups serving Nevada County seniors and became an ambassador to the Grass Valley Chamber of Commerce. It is important to me to live and work where I meet clients, in short, it is also important to me to invest in my community.

I now notice a few reverse mortgage “specialists” who are advertising on the internet as Grass Valley specialists, but live and have their offices in the Bay Area or Los Angeles. We are the real deal, I live in Grass Valley and have an actual office location in downtown Grass Valley, and offer the public a real deal. We are authorized representatives with 8 of the largest reverse mortgage companies in the nation, yep, even the ones on T.V., but what makes us unique is we shop for YOU for the best rates and fee deals that fit your retirement goals. You don’t have to call 8 distant call centers, or work with someone who only represents one or two lenders and perhaps can only offer you higher fees or rates, you can select between 8 lenders right here in Grass Valley, Ca. and come in and see your lender representative, me, in your home town location. Many of my clients are not only from Grass Valley but from Nevada City and Penn Valley, and yet they feel that comfort level of knowing I’m in a real office office just moments away from them.

Don’t be fooled by out of town “posers”, we at Sierra Foothills Reverse Mortgage of Grass Valley, are here for you, locally, in an office, not an out of town loan officer  insisting to come into your home to do a reverse mortgage, because, well, they don’t really live or have an office here so your home has to become their office.

Shawna McDonald, Loan Officer has completed hundreds of reverse mortgages. She is approved with 8 of the largest reverse mortgage lenders in the nation allowing the consumer 1 stop comparative fee and rate shopping. Her local office, Sierra Foothills Reverse Mortgage, is located at 412 E. Main Street Suite N, Grass Valley, by appointment: (530) 497-3010. The website is www.SierraFoothillsReverse.com.

NMLS#271335 CA-BRE #00585530