Questions To Ask Before Seeking a Reverse Mortgage in Hawaii

Just like in other states, reverse mortgages in Hawaii are insured by the Federal Housing Administration (FHA). Before doing a reverse mortgage in Hawaii, you need to understand the following:

Are There Hidden Charges?

Very few people understand that a reverse mortgage is similar to a conventional/forward mortgage in that it comes with certain fees. Some closing costs such as the appraisal fee, the credit report, and flood certification have to be paid upfront and out of pocket. All other fees, i.e., the origination fee, title insurance, etc., are included in the loan. The only additional fee incurred for a reverse mortgage is the Counseling. The counseling is required and completed over the phone using an 800 number (there are no FHA Counselors in Hawaii) at a cost of $125 – $150 and is paid directly to the counseling agency at the time of the counseling. It usually takes about an hour. The counseling is for the benefit of the homeowner. They will discuss the terms of the reverse mortgage, fees, and assist you in seeing if there is an alternative to a reverse mortgage. Additionally, the homeowner is responsible for the property taxes, homeowners insurance, and maintenance of the home including repairs. The main difference between a Reverse Mortgage and a Conventional/Forward Mortgage is that on a Conventional Mortgage the homeowner is making a monthly mortgage payment, therefore the balance is going down and the equity is increasing; whereas with a Reverse Mortgage, no monthly mortgage payment is required, therefore the balance is going up and using up some of the equity. This may be a concern if the homeowner is planning to leave the property to their children. Therefore, it is always advisable to seek the help of the people you trust including your children.

Does the Homeowner Have Any Other Source of Income?

A reverse mortgage should be part of the homeowners long term financial plan and not as a last resort. However, there are always extenuating circumstances. For example, if the homeowner has health issues and decides to take an early retirement, they may not be able to afford the current mortgage payment. If selling and downsizing is not an option, then a Reverse Mortgage may be an ideal solution.

Is This Type of Mortgage Ideal for All Senior Homeowners?

No, a reverse mortgage is not for everyone. It depends on the senior homeowners individual circumstances. To find out if a reverse mortgage is right for you, and how much you qualify for, please feel free to consult the author of this article to discuss the pros and cons.

For more information you can also visit: www.AlohaMortgageSolutions.com.  There you will find two short video’s, one 3 minutes long titled: “Reverse Mortgages Explained;” and the other 5 minutes long titled: “Testimonials of Real Hawaii Clients.”
For your FREE, no-obligation quote, contact Daniel Nicolosi, at Harbor Financial Group – Your Aloha Mortgage Solution, in Honolulu. 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.

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