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Reverse Mortgage in Texas
Reverse mortage in Texas
A reverse mortgage is a loan that allows older homeowners to borrow against the equity in their home. Their home must be their primary residence with intent to occupy subject property. Home equity is calculated by the current market value after subtracting any liens or mortgages on the property.
The reverse mortgage loan product, often referred to as Home Equity Conversion Mortgage (HECM), is becoming increasingly popular, especially with a growing aging society. Always Accurate Notary is very knowledgeable of the entire process of a reverse mortgage, from start to finish. As the only Certified Reverse Mortgage Signing Professional (CRMSP) in southeast Texas out of 13 for the entire State of Texas, we understand the life situation and mindset of the borrowers at your loan signings. These borrowers are a special demographic, that appreciate respect, manners, and patience.
A Certified Reverse Mortgage Signing Professional is a Notary Public and Loan Signing Agent that takes additional training about the reverse mortgage clientele, mindset, and process as to offer a better service to signers, closing agents, and loan officers.
- Provide excellent communication to Borrowers, Escrow agents and Loan officers.
- 2-hour commitment to reverse mortgage signing appointment to maximize a client paced and focused engagement.
- Complete and correct dates and signatures on all required documents.
- Attaching void check via paperclip and notarization of Account Documentation and on Electronic Funds Transfer Request.
- Quadruple checking documents for completeness.
- Provide expedited and correct loan packaging stacking order to Escrow agents.
Reverse Mortgage Line of Credit has guaranteed growth over time while property market value fluctuates in real life. Financial advisors love this feature in Reverse Mortgage for there is constant access to available money to tap as compared to a HELOC in a down market.
Various ways to tap money available:
- Tenure Plan: Receive equal monthly payments as long as client occupies the Property as a principal residence.
- Term Plan: Receive equal monthly payments for a fixed period of time that is selected.
- Line of Credit Plan: receive advances in unscheduled payments or in installments, at times and in amounts chosen until the Line of Credit is exhausted (financial advisors love this).
- Modified Term or Tenure Plan: combine a Line of Credit with monthly payments. In exchange for reduced monthly payments, can set aside a specific amount of money at closing for a Line of Credit, on which draw down till Line of Credit is exhausted.
Most common reasons why people love reverse mortgages:
- Creating an additional funding stream during retirement to make savings last longer
- Tax free income
- Push out the need to start receiving monthly Social Security checks till age 70
- Can now downsize and use reverse mortgage to purchase a new home
- Can age in place in their current home – a very desirable option
- Utilize reverse mortgage Line of Credit as a savings account for in-home care or special services later in life
- Excellent comprehensive financial planning tool to plan for retirement
- Good for people of ALL walks of life
- Growing in popularity amongst financial advisors
- A reverse mortgage can pay off remaining balance on mortgage and/or home equity line of credit (HELOC) to eliminate monthly debt payments
- Upon sale of home or last person (on title) living there passes, the loan amount borrowed plus accrued interest is to be paid with the remaining equity belongs to you or the heirs
- During a reverse mortgage, you still own the home, retain full rights to the title, and keep remaining equity
- Not required to make a payment and there is NO prepayment penalty
- Your heirs can refinance the home for the amount of what is due or 95% of appraised value in a down market
- Can use a HECM to buy a home to downsize or purchase their dream home to make it more affordable for them. Require a 1-time large down payment and then never make another mortgage payment other than to continue to pay taxes and insurance and HOA. By only required to pay 50% of appraised value, they keep in savings the remaining 50% for future retirement expenses.
The amount of funds the client can get depends on:
- The age of the borrower (the older gets more funds)
- The value of the home (a free & clear mortgage keeps more funds)
- The product they choose (adjustable rate versus fixed rate)
- Number of borrowers is NOT a factor