Don’t be Scared: Reverse Mortgages Bring Great Value
By Carl Benefield, Northshore LIVING WELL Magazine
Underwriting. Oh, boy! Does that mean I have to give up my first born? If you have refinanced or purchased a piece of residential property in the last five years and obtained a conventional mortgage, you know what I’m talking about. The credit market has tightened up so much that every loan is full documentation. Last two years tax returns, two months bank statements, paystubs, credit explanations, have become the standard requirement. Credit score requirements are higher now than they were five years ago. As a running joke in the conventional mortgage business, consumers always ask if they will have to provide blood or a DNA sample. Of course, our reply is we have not gone that far, yet.
Underwriters ask a lot of questions. It’s their responsibility to review each file, determine if it meets product guidelines and request any support documentation that is needed to meet those guidelines. They are basically assessing the risk of the file and making a decision if the borrower qualifies. Their job has become a lot tougher in the last few years.
Are you scared about doing a reverse mortgage? Please, don’t be. The underwriting of reverse mortgages is vastly different than conventional underwriting. Most of the information required for conventional underwriting is not required for reverse mortgages.
- NO Credit Score Requirement – We do pull credit, but it’s not for the purpose of reviewing credit scores
- NO Employment Qualification – No need to have a job to qualify
- NO Income Requirements – Income documentation will not be required. There are no specific income requirements for reverse mortgages. However, we do have to list the monthly income on the application. Underwriting will want to know that the monthly income is sufficient to maintain homeowners insurance and payment of property taxes.
- NO Asset Verification – bank statements or proof of assets not required
The main requirements for reverse mortgages include: senior must be 62 years of age, have lawful residency in the U.S., own the home outright or have a low mortgage balance that can be paid off at closing and maintain property as a primary residence. An appraisal is done on the property to determine its value. It’s a very simple process that from start to finish can be completed in 45 days.
The benefits of doing a reverse mortgage are numerous. Local experts, like Pinnacle Mortgage Group, will guide you through the process and help determine if a reverse mortgage is right for you.
Carl Benefield may be reached directly at Pinnacle Mortgage at 985-727-0755 (extension 5).