divider

Reverse Mortgage Colorado

Background

A home equity conversion mortgage is a government insured "reverse mortgage", which enables homeowner's 62 years of age and older to convert the equity in their home into a monthly stream of income, a lump sum of money, or line of credit, while allowing the homeowner to stay in the home.

Nelson Haynes created the first reverse mortgage product in 1961 while employed at Deering Savings & Loan in Portland, Maine.  Nellie Young, a customer of the bank had just been widowed and was faced with the possiblity of losing her home when Haynes created the innovative loan product; rescuing Mrs. Young from an unfortunate situation.

In the decades that followed, reverse mortgages have moved to the forefront of the lending industry as a means of keeping aging homeowners in their homes, while giving them access to much needed funds to maintain their independence and lifestyle.

 

Reverse Mortgage Features

  • Homeowner stays in the home
  • Social Security and Medicare benefits are not adversely affected
  • Borrower can never "outlive" the reverse mortgage and be forced to move
  • Existing mortgages are paid off in full (Refinance)
  • Reverse mortgage may be used for a home purchase
  • No minimum credit score
  • No income restrictions
  • No employment requirements
  • No mortgage payments
  • Repayment not required while homeowner occupies property
  • May receive funds in lump sum, monthly stream, or line of credit
  • Homeowner can never be upside-down
  • Reverse mortgages are "non-recourse" mortgage loans
  • If mortgage balance exceeds homes' value, overage is never owed
  • Heirs may inherit the property and keep any remaining equity
  • Loan proceeds received from the reverse mortgage are not taxable
  • Closing costs can be financed into the loan amount

 

Borrower Eligibility Requirements

  • 62 years of age or older
  • Have a small mortgage balance, or own the property free and clear
  • Occupy the property as a principal residence
  • May not be delinquent on any federal debt past or present
  • Attend a mandatory counseling session about reverse mortgages

 

Property Eligibility Requirements

  • Single-family homes
  • Townhomes
  • HUD approved condominiums
  • 1-4 unit properties, provided borrower lives in one unit
  • HUD approved manufactured homes

 

Determination of Reverse Mortgage Loan Amount; How Much Can Be Borrowed?

The amount of the reverse mortgage loan the borrower may receive is derived through a formula based on the age of the youngest borrower on the loan, the current interest rate available, the appraised value of the property, and the choice of mortgage insurance option.  It is not a simple percentage of the value of the property, so each borrower will have a customized answer.

 

Process Overview for Obtaining a Reverse Mortgage

  1. Initial Consultation
    The entire process typically takes 45-60 days from beginning to end, and starts with a free, no obligation, initial consultation. 

    We realize you probably have questions before you can even begin to make a decision, so we'll spend whatever time necessary with you and your loved ones, in order to answer everyone's questions and make you feel 100% comfortable before you do anything else.  Call us at 303-743-9498; we're local.
     
  2. Counseling. 
    The process begins with the homeowner attending a mandatory counseling session with a HUD-certified reverse mortgage housing counselor.  Once completed the homeowner will receive a "Counseling Certificate" enabling them to proceed to the next step. 

    Enter your information on the right side of this page to receive a list of certified reverse mortgage housing counselors.

     
  3. Document Preparation 
    The homeowner should locate and compile documents the lender will need to complete and verify the loan application information.
     
  4. Loan Application
    The next step is to complete a formal loan application.  The lender will ask for a copy of the Counseling Certificate at that time.
     
  5. Appraisal
    Following the loan application, the lender will order an appraisal on the property.  The appraisal is conducted by a HUD approved appraiser in accordance with guidelines that focus on the condition of the property as they relate to health and safety issues.
     
  6. Underwriting
    Once the appraisal is returned, the loan file will be submitted to underwriting for final approval.
     
  7. Closing
    Upon underwriting approval of the file, the closing will be set up with a title company.
     
  8. Three Day Rescission Period.
     Homeowner will be entitled to a three day right of rescission beginning the day after closing in order to assure they completely understand and concur with everything they have signed. 
     
  9. Funding
    Once the three day rescission period has passed, the homeowner will be given the loan proceeds in accordance with their chosen method of receipt of the money.

 


What To Do Next

Hopefully we've answered many of your initial questions about reverse mortgages.  Enter your information on the right to receive more information.  Call us at 303-743-9498 if you have any questions.