What is a Reverse Mortgage?

Reverse Mortgage for Texas Homeowners

What is a Texas Reverse Mortgage?

A Reverse Mortgage is a powerful and proven financial tool that lets you access the equity you’ve built into your home and convert it into cash so you can use it now. Reverse mortgages, also know as a HECM’s, are different than a traditional home equity loans because with a reverse mortgage you do not make monthly payments to repay the loan.

Texas homeowners must be 62 years of age and live in their own home with considerable equity. The significant difference between a reverse mortgage and a conventional mortgage is that there are no principal or interest payments required on the home while the borrower occupies the property. In the case of two borrowers being on title, should one permanently leave the property due to a death or hospitalization, the other borrower continues to remain in the home.

You Can Continue to Live in Your Home

One of the most important benefits of a reverse mortgage is that it allows you to continue to live in your own home. You will retain the title to your property and it is not held by a bank or financial company. You will continue to live in your home and make no monthly mortgage payments. You cannot lose your home as long as you live there and keep your taxes repairs current.  Reverse Mortgages are proven to be safe and secure and are regulated and insured through the federal government by the Department of Housing and Urban Development (HUD) and the Federal Housing Authority (FHA).

Reverse mortgage loans do not have to be repaid until one of the following occurs:

★  All borrowers permanently move out of the home

★  The last surviving borrower passes away, sells the home, or fails to live in the home for 12 consecutive months

★  The borrowers fail to pay property taxes or insurance

★  The borrowers let the property deteriorate beyond what is considered reasonable wear and tear, and do not correct the problems

You or your heirs always have the option of paying off the entire balance and keeping the house (this can also be done by refinancing with a standard mortgage) or by selling the house to pay off the balance. In either case, the amount of the loan can never exceed the current market value of the home when the loan is due.

Texas Voters Approve Reverse Mortgage for Purchase

On November 5, 2013 Texas voters approved Proposition 5, The Texas Reverse Mortgage Loan Amendment. The amendment authorized the making of a reverse mortgage loan for the purchase of a home and amended certain requirements regarding a reverse mortgage loan in Texas. The amendment was sponsored in the legislature by John Corona (R-16). The change would allow the individuals to consolidate the process into one streamlined transaction rather than closing on their current home prior to purchasing the new one. Texas Voters approval of Proposition 5, amended the state constitution to allow homeowners age 62 or older to use a reverse mortgage loan to purchase a new home.

Texas has allowed home equity and reverse mortgage lending since 2001 but senior Texans have been limited to using a reverse mortgage to access funds from the equity built up in their home only if they intended to stay in that house. If a homeowner wanted to buy a new home elsewhere Texas law would require them to purchase the new house with a conventional mortgage and then take out a reverse mortgage. The passage of Proposition 5 allows borrowers to combine those steps, including the sale of the former home, into a single, less costly and less complicated real estate transaction. Prior to Texas Voters approving this Amendment, Texas was the only state in the nation to prohibit reverse mortgages for home purchase.

Texas Law Now In Line with All Other States

Now, Texas is like the rest of the country have empowered Senior Texas Homeowners greater financial flexibility and choice regarding how they may use the equity they have accumulated in their home. There are safeguards built into the reverse mortgage transaction, including a requirement that borrowers receive detailed disclosures and financial counseling before the transaction closes. Reverse mortgages are one of the most regulated mortgage loans in the country. The Texas amendment will force clear guidelines for offering reverse mortgages to Texas Senior Homeowners and details the rights and responsibilities for borrowers if they decide a reverse mortgage is right for them. If lenders break those guidelines the Texas Amendment will ensure that those responsible are held accountable for taking advantage of seniors and homeowners.

Texas law now makes it easier for Texas seniors to finance new home purchases while maintaining and enhancing protections for home buyers. Reverse mortgages are regulated and overseen by the federal government through HUD & FHA, financial counseling must be completed before the mortgage is closed, and a notification of all the terms of the mortgage must be given to the borrower 12 days prior to the start of the loan.

Contact Lone Star Reverse Mortgage for More Information

For more information about Proposition 5 and reverse mortgages in Texas please contact Bob Worley with Lone Star Reverse Mortgage, Inc. Bob can be reached at 1-800-307-9113.

 

 About:  Lone Star Reverse Mortgage, Inc. is privately owned by Bob and Debbie Worley. They bring old fashioned personalized service to Texas senior homeowners. Bob and Debbie offer extensive experience in the reverse mortgage industry; reverse mortgages are all they do. They have a proven track record demonstrated by their long list of satisfied customers. Experience matters in the Reverse Mortgage business and with a combined experience of over 20 years helping Texas homeowners with reverse mortgages. “We do reverse mortgage deals others can’t”. Lone Star Reverse Mortgage, Inc. serves the entire state of Texas including Dallas, Fort Worth, Austin, Houston, San Antonio and all regions throughout the state.