Aloha Mortgage Solutions
Reverse Mortgages with Aloha
700 Bishop Street, Suite 210, Honolulu Hawaii 96813
Hawaii Reverse Mortgage
There are many misconceptions and myths surrounding Reverse Mortgages. The most common of them is that the lender will take ownership of the Senior Homeowner’s property when they pass on, and the children will be left with the burden of repaying the debt. This is not true. As in a conventional (forward mortgage) there is a lien; however, the title remains in the name of the borrower and any remaining equity passes on to the heirs. Or, the heirs have the right to purchase the property by paying off the mortgage balance. In the event the mortgage balance is higher than the appraised value (unlikely) at the time of disposal, the FHA Insurance pays the shortfall.
Let’s start at the beginning in order to better understand what a Reverse Mortgage is. It is a type of mortgage in which a senior homeowner can borrow money against the value of his or her home and NOT have to make a monthly mortgage payment until they either pass on or sell the home, at which time the loan becomes due. Taxes, insurance, and home maintenance remain the responsibility of the homeowner. This type of loan is only available to homeowners who are 62 and above, and who have “adequate” equity in their home.
There are four ways in which the senior homeowner can receive their Reverse Mortgage funds. They are:
- As a cash lump sum at closing deposited directly into their personal bank account.
- As a line of credit that can be drawn on at any time.
- As a monthly payment deposited into their personal bank account for as long as they remain living in their home.
- Or a combination of the above.
As mentioned above, the senior homeowner remains the owner of the home and still holds the title of their property. They can still sell the property or refinance out of the reverse mortgage at any time, and there is never a pre-payment penalty. There is no limit as to how long the homeowner can live on their property.
When the senior homeowner passes on, the designated children or heirs will have 3 options:
- To sell the home and keep the remaining equity
- Refinance the property into their name
- Or in the event the current appraised value is less than the mortgage balance, the FHA Insurance will pay the shortfall and the heirs can simply walk away and allow the lender to take care of the sale.
It is important to note that a reverse mortgage is a non-recourse loan. This simply means that the borrower will never owe the lender more than the current loan balance or the current appraised value – whichever is the lessor.
You’ve invested a lifetime, now reap the rewards.
A reverse mortgage is not for everyone. It is always recommended to consult with your family, a financial advisor, and/or a reverse mortgage specialist before proceeding.
To find out how much you are eligible for, and whether a reverse mortgage is right for you, please feel free to consult the author of this article to discuss the pros and cons.
For more information you please visit: www.AlohaMortgageSolutions.com. There you will find two short videos. The first one is 5 minutes long titled: “Testimonials of Real Hawaii Clients.” The second is 3 minutes long titled: “Reverse Mortgages Explained.”
For more information, or for a FREE, no-obligation quote, contact Daniel Nicolosi in Honolulu at Harbor Financial Group – Your Aloha Mortgage Solution. You can reach him directly at (808) 799-8218 on Oahu; or Toll Free at 888-423-2468 from the Neighbor Islands. Within 10 minutes he can usually tell you whether you are eligible, and how much you may be eligible for.
Call or email to find out how much you may be eligible for:
(Never an obligation)
Hawaii Reverse Mortgage
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