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Reverse Mortgage
“A loan program for elders, 62 years and over”
 This
is Michael W. Perry,
spokesperson for Charter Reverse Mortgage. I believe
that a reverse mortgage will be beneficial for a lot of
Hawaii's seniors.
Please
review the following information and contact Charter
Reverse Mortgage for additional information.
What is a reverse mortgage?
A reverse mortgage is a
special type of
residential mortgage program that enables elders, 62
years and over, to convert the equity available in their
home into ready cash. Best of all, there is no
repayment requirement until the elder person no longer occupies
the home as their primary residence.
Why do you need a reverse mortgage?
Some of the benefits of getting a reverse mortgage
are:
- Supplementing retirement income
to cover daily living expenses
- Repairing or modifying your home
- Covering your health-care
expenses
- Paying off existing debts
-
 Taking a vacation
- Paying property taxes and
- Preventing foreclosure
What are the requirements for a
reverse mortgage?
- Homeowner(s) must be 62 years and
over
- Homeowner(s) must occupy the home
as their primary residence
- The property is a fee simple
home, an apartment up to four units, or a FHA approved
condominium
How do I receive the loan funds?
- As a lump sum wherein the entire
loan amount is provided to you in one payment at
loan closing
- As fixed monthly payments (for up
to life) wherein the payment is provided to you as
monthly advance as long as you continue to own and
occupy the property
- As a line of credit wherein
advances can be drawn as needed. This is the most
popular option and is chosen by more than 60% of the
borrowers and
- As a combination of the
above-listed options
How much can I qualify for?
The amount of money you qualify for from a reverse
mortgage depends upon your age (or age of youngest
borrower in the case of couples), appraised home value,
current interest rates, and the lending limit in your
area. In general, the older you are and the more
valuable your home (and the less you owe on your home),
the more money you can get.
As an example, estimated amounts that you can qualify
for a property valued at $ 470,000 at an interest rate
of 6% would be as summarized in this table.
|
Age |
Lump Sum
Amount |
Amount per
month |
|
65 |
$ 250,117 |
$ 1,503 |
|
70 |
$ 272,866 |
$
1,715 |
|
75 |
$ 296,638
|
$ 1,992 |
|
80 |
$ 321,405 |
$ 2,383 |
|
85 |
$ 345,985
|
$ 2,997 |
How much will it cost to obtain a
reverse mortgage?
 Many of the same costs that are incurred to obtain a
home purchase loan, or to refinance their existing
mortgage, apply to reverse mortgages too. You can expect
to be charged an origination fee, up-front mortgage
insurance premium (for the FHA Home Equity Conversion
Mortgage or HECM), an appraisal fee, and certain other
standard closing costs. In most cases, these fees and
costs are capped and may be financed as part of the
reverse mortgage.
How and when do I have to repay the
loan?
You DO NOT have to make any monthly mortgage
payments to lender during the life of the loan. The loan
is repaid when you cease to occupy the home as a
principal residence. The loan may be repaid by you or
your heirs/estate, with or without a sale of the home.
The repayment obligation cannot exceed the home’s value
or sales price.
Need more information? Or want to apply for a reverse
mortgage? Please contact us @ (808) 942-1101.
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