Processing Time: On average, it may require 4-8 weeks to process and close a Reverse Mortgage. This may even require more time in cases where the home is in need of repairs required to be acceptable for the program. Closing Costs: Most closing costs are financed into the loan. We can tell you how charges for your appraisal, title insurance, origination fee and recording fees are handled. We will be happy to provide you with a Fee Worksheet of Closing Costs from information provided by filling out the "Contact Us" form, via telephone or face-to-face meeting. Note: if closing costs are financed it will reduce the amount of available loan proceeds. Interest Rate: The interest rate charged varies depending on the Reverse Mortgage program selected by you. All programs offer adjustable or fixed rates. The adjustable rate loans have lifetime caps on the maximum allowable rate. The rates and costs are regulated by FHA and the Private Investor in the case of higher valued properties. We will be happy to provide you with a quote using the current rates. Impact on Income Taxes and Social Security: Proceeds from a Reverse Mortgage are considered to be proceeds from a mortgage loan and not considered income. Therefore, the funds received are not subject to income tax and do not affect Social Security Benefits. Borrowers receiving Medicaid or SSI may not be affected if the funds from the Reverse Mortgage are spent in the month received. As always, we recommend that you consult with your tax advisor for further details and advice. Repayment: The Reverse Mortgage does not have to be repaid as long as the homeowner owns and maintains the home as their primary residence and does not permanently leave the home (it is important to note that the homeowner must pay the taxes and insurance). The Reverse Mortgage can be repaid either from the proceeds of the sale of the property or other liquid assets, or in the event of death the heirs can obtain a conventional mortgage to pay off the reverse mortgage. The loan balance consists of the financed closing costs, the cash that was advanced to the borrower and any interest and mortgage insurance servicing fees that accrued. Remaining equity belongs to you or your heirs. The Reverse Mortgage is subject to a non-recourse limit, which states that you or your heirs are only required to repay the loan balance or the fair market value of the home, whichever is less. Should you outlive the lender's estimate and have the principal go to zero, the home is yours until you choose to leave it.
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