Your Reverse Mortgage column — Thanks from an RM consultant!

Hi Terry, I've enjoyed your column very much over the years. I was pleasantly surprised this week when I read your column about your personal experience with your dad's reverse mortgage. I'm so glad it helped your dad live in his home until 95! I am a reverse mortgage consultant, and have a few comments on your May 26th article. 1)Your dad had a condo.Just note that not all condos qualify; they must be FHA approved. 2) RMs can work just as well if there is a mortgage. Many of my boomer clients find themselves saddled with a large mortgage at the same time they want to retire. They opt for a RM so they *can* retire. And, "beating the odds" when you start with a large loan balance at 62....is definitely within reach! In other words, why pay $300,000 mortgage when you can eliminate it and start enjoying retirement today? Of course, it all depends on individual circumstances and financial goals. 3)There is currently a cap of $636,150 that lenders can look at in home value. So if you have a million dollar house, your benefit would be the same as if you had a $636,150 home value. 4)You or your heirs can pay off the RM at any time (not just at your death). Some people may think that doing a RM is the end of the line and there is no going back. Not true! You can refi, pay off, or make payments towards the loan balance if you choose. 5)The note about making sure you have adequate income to remain in your home and the ability to pay your property taxes and insurance, HOA fees, etc. Homeowners don't need to worry about this as there is now a financial assessment as part of the RM application process that crunches the numbers for them. Since July 2015, a new financial assessment has been put in to place. Underwriters look at the borrowers income and debt to make sure they have enough to pay their required taxes and insurance. If they don't, the lender may require a set aside that would pay those for the borrower for the rest of their life. The set aside will likely reduce the borrower's benefit amount. So not everyone qualifies for a RM. They need to be current on their property taxes, homeowners insurance, (and any other fees required like HOA) and have sufficient income. Many seniors start using credit cards when they come up short to pay bills, and if they apply for a RM with a large credit card debt and just social security income, they may or may not qualify for a RM. It's better for folks to look in to a RM before they reach the point where they are relying on credit cards. I hope my comments are helpful. The rules surrounding the RM program can change weekly! Thank you for sharing your story! Best Regards, Marina Watts Reverse Mortgage Consultant HighTech Lending Santa Cruz, CA (831) 535-9760 mwatts@hightechlending.com