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Reverse mortgages are an excellent solution to financial concerns
for many seniors across Florida. Home Equity Conversion Mortgage
(HECMs) are the most popular reverse mortgage available.
However, they are not for everyone, and applicants should be
confident that they understand the negatives as well as the
positives prior to signing for a reverse mortgage.
Reverse Mortgage Highlights
What is a “Reverse Mortgage”? Well in simple layman’s term and not an exact legal definition, the Reverse Mortgage loan is a contract between lender and borrower and can be broken down into basically three main parts.
Part 1 is a 1st mortgage loan similar to a standard FHA forward mortgage with standard amortization of a 30-year loan. The interest rate on the loan can be a fixed or an adjustable rate, but the choice is that of the borrower(s).
Part 2 is a 2nd mortgage loan similar to a HELOC, Home Equity line of Credit. This part of the contract uses the homes remaining equity to pay the first mortgage loan (part 1).
Part 3 is a credit line which is available with loans that have an adjustable interest rate. This feature allows the borrower to take out more cash at any given time of their choosing after the first year. All they have to do is call the lender and request the available funds to be sent to them.Reverse Mortgage Loans Available in Florida
To be eligible for a Reverse Mortgage the borrowers must:
The Reverse Mortgage Loan is based on:
*** Can we do a “Jumbo Reverse Mortgage Loan”? Yes, but the rules around the available loan-to-value change dramatically but is still mainly driven by age.
**** Can we refinance our current Reverse Mortgage? Yes, a reverse mortgage can be refinanced after the original closing date is greater than 18 months ago. Often this is only a benefit if someone has the ability to capture capital appreciation. The borrower(s) should always be aware of any solicitation of a reverse mortgage refinance, and make sure that it’s a true benefit to themselves and not a greater benefit to the loan originator, who maybe, just looking for compensation.
Reverse mortgages can be used to:
Unlike traditional loans, there are no monthly payments to be made during the lifetime of the loan. The debt from the reverse mortgage becomes payable in full immediately when:
Upon the death of the borrower(s), the heirs can simply walk away from the home without liability or obligation to repay the loan or they may sell the home and the outstanding loan balance will be repaid from the sale of the home. Alternatively, if the existing reverse mortgage could be refinanced or a purchase transaction completed, all of the remaining equity belongs to the heirs or to the estate. Upon the death of the last spouse/borrower the family/children may purchase or refinance the home at the lessor of the outstanding loan amount or 95% of the appraised value.
Counseling information for reverse mortgage applicants typically takes 1-4 hours.
The counselor must be employed by a third-party non-profit or public agency that is approved by the HUD (US Department of Housing and Urban Development). The counselor is required to use loan analysis and comparison software which follows the HUD’s counseling policies and procedures.
What is Included in the class?
Reverse mortgages in the Education Center
If you have any questions or would like further assistance, please contact us directly and we will try our very best to help wherever possible.
We are a Florida mortgage brokerage and our services have been designed to remove the stress and misunderstandings commonly associated with a mortgage loan.
For further information about getting the right mortgage for you
and to arrange your ‘NO-FEE ASSESSMENT’
Call us on 941-444-9240