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Cincinnati, Ohio

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Cincinnati Reverse Mortgage Basics

A reverse mortgage is for people 62 and older who own their home and want to remain there. There are not any income or asset requirements. In most cases credit history is not an issue and you can get money tax-free. We will pay off everything you owe on your home and you won’t have to make a monthly payment. You can live in your home as long as you like and no repayment is due until you no longer occupy the home as your primary residence. Whether you are in Hamilton, Butler, Clermont, or Warren Counties, we can help structure the proper reverse mortgage to fulfill your needs.

You don’t have to have your home paid in full. The less you owe the more money you have access to. Any mortgages or other lien on the home must be paid in full at the closing. Sometimes we can only pay off the mortgage. In other cases people are able to get tens or hundreds of thousands of dollars.

In most cases you are responsible for the taxes, insurance, and maintenance just like a forward mortgage. We can set up to escrow taxes and insurance. The money must be available and set aside to pay future bills.

The reverse mortgage can be a great tool to maintain or improve your standard of living. We have helped local Cincinnati home owners who wanted to buy a recreational vehicle to travel, paid off high interest rate mortgage loans, set up a line of credit to ensure the surviving spouse is able to continue if something were happen to one of the couple.

How does a reverse mortgage work?
The loan amount will be based on several factors. The first of which is your age. Anyone on the reverse mortgage must be at least 62 years old. The older you are the more money you will have access to. If there are two people on the loan, it will be based on the younger of the two.

The next factor will be the type of reverse mortgage loan you want. Some of the different types of reverses are as follows:

• HECM - Home Equity Conversion Mortgage
• FHA HUD Fixed Rate Reverse Mortgage
• FHA HUD Monthly Adjustable
• HECM Annual Adjustable

Adjustable Rate HECM
The adjustable rate reverse mortgage will have an interest rate the will change either monthly or annually. As with forward mortgages, the interest rate will consist of index plus the margin. The index is usually the one year U.S. treasury rate or the LIBOR which is the cost of money in London. The margin is the amount added to the index to determine the new rate.

The monthly adjustable is just how it sounds. The rate will go up or down every month. The annual only changes once a year. The difference will be the margin. An annual HECM has a larger margin than the monthly. In most cases the monthly will give you the most money.

Fixed Rate HECM
We now are able to offer the fixed rate reverse mortgage for all of our clients. The FHA fixed rate reverse has about the same fixed rate as a forward mortgage. One difference between the fixed and variable is with the fixed you must take all of the funds available at the closing. There is not an option to leave the money on a line of credit. The fixed works best for people who owe or have a use for all of the available funds.

Can I keep my existing mortgage?
The reverse mortgage lender will demand to be in first lien position. That means all mortgages and liens must be paid in full. With the home equity reverse mortgage FHA and HUD will also have a lien on the property along side the lender. The federal government will step in and complete the terms of your reverse mortgage. That ensures you will be protected in the event the bank goes out of business.

When is a reverse not a good idea?
I usually tell people a reverse is not the right kind of loan if you plan on moving in the next year or so. The closing costs on a reverse are higher than on a traditional forward mortgage. If you knew you were going to move soon we would look at the other options.

With all FHA HUD HECM and Fannie Mae reverses counseling is going to be required. That will give you a neutral third party who will ask you series of questions and go over the terms of your reverse mortgage.

When is a reverse a good idea?
It is a good option for the right situation. Like everything else in life you need get educated on reverses. You will want to speak with people you trust to see if a reverse is right for you. You might want to do a second mortgage or try to get different terms on your present mortgage loan. The bottom line is to ask a lot of questions and ask for help in making such a big decision.

Reverse Mortgage Calculator >