Monthly Archives: June 2017

10 Questions to Ask When Considering a Reverse Mortgage

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You may have heard of a reverse mortgage, but you’re not sure if it’s the right choice for you. You may have even put off looking into it because you’re not sure if you qualify. Fortunately, if you have some equity in your home and want to increase your income in your Golden Years, a reverse mortgage could be an excellent choice for you and your family.

Here are 10 questions you should ask when considering a reverse mortgage.

1. What is a reverse mortgage?

A reverse mortgage lets you convert the equity in your home to income or a line of credit.

2. Is there an age requirement for a reverse mortgage?

Yes. You must be at least 62 years old to qualify for a reverse mortgage.

3. Does my home qualify for a reverse mortgage?

To be eligible, your home must be a single-family home used as your primary residence, or a 2-4 unit multifamily home where you live in one of the units. HUD-approved condos and manufactured homes can also qualify.

4. Do I still own my home with a reverse mortgage?

Yes, you still retain ownership of your property with a reverse mortgage. This means you can sell the home and move at any time, and the money you make from the sale (after you pay your mortgage balance) is yours to keep.

5. Do I have to live in my home to have a reverse mortgage?

Yes, it must be your primary residence.

6. What happens if the mortgage balance exceeds the value of my home?

Nothing. The balance of your FHA-insured reverse mortgage doesn’t need to be paid until you move, sell your home, or die. When the loan is due, you or your family members will owe no more than the value of your home.

7. Where can I get a reverse mortgage?

Any lender authorized to make HUD-insured loans can offer reverse mortgages.

8. How would I receive payments from my reverse mortgage?

There are five ways to receive payments from your reverse mortgage:

  1. Tenure – you receive monthly payments from the lender for as long as you live and continue to occupy your home as your primary residence
  2. Term – you receive monthly payments for a fixed period of time
  3. Line of credit – you make withdrawals up to a maximum amount as needed
  4. Modified tenure – you can combine tenure with a line of credit
  5. Modified term – you can combine term with a line of credit

9. I still have questions, where can I get help with a reverse mortgage?

 HOMEteam provides reverse mortgage counseling, which is required prior to applying for a reverse mortgage through the Federal Housing Administration (FHA).

10. Are HOMEteam’s services right for me?

Our counseling services for reverse mortgage are designed for individuals who are 62 or older who would like to remain in their home and access the equity they have accrued without selling or making additional monthly payments.

For more information about our reverse mortgage counseling, please contact our certified reverse mortgage counselor Debbie Wheeler at (603) 626-4663 x1400.

A Four-Point Strategy to Revive Homeownership

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It’s not looking good for homeownership these days. According to the U.S. Census Bureau, 63.7 percent of households owned their homes at the end of 2016, down from a peak of 69.2 percent in 2004. While there have been small increases in recent quarters, the homeownership trend since the financial crisis continues to trend downward. We need to reverse this pattern, and these four strategies will help.

First, we have to demystify the process. More than two-thirds of adults in an Oct. 2016 national household opinion survey from NeighborWorks America described the homebuying process as complicated. Our network’s counselors report that a common refrain from customers they help to achieve homeownership is, “I never thought I could do this.” Because the purchase process is so complex, many potential homeowners don’t even try, essentially self-selecting out of their piece of the “American Dream.”
Increasing the homeownership rate in New Hampshire will energize the local economy and create jobs from construction to retail.

Second, we have to return to rational credit standards. We return to the loose underwriting of the early 2000s. However, right now, credit standards are too tight and thus reduce the prospects for homeownership for many. A recent article by the Urban Institute noted that innovations in credit scoring practices could help up to 3 million first-time homebuyers across the country. Some of them certainly live here in New Hampshire. The lending industry must seriously pursue such modifications.

Third, we need to do a better job in reaching out to low- and moderate-income consumers. These are the first-time buyers of the future and they are unsure about the path to homeownership. Nonprofits housing organizations have had a “field of dreams” mindset: if we’re here, homebuyers will find us. That’s not working. The NeighborWorks survey mentioned above also found that less than 10 percent of consumers think of nonprofit’s like HOMEteam first when considering how to achieve homeownership. Our organization and others working to increase homeownership, especially among first-time buyers, need to behave more like businesses and seek out these types of customers. Word of mouth isn’t enough.

Fourth, we must overcome financial obstacles. Home prices are increasing in nearly all markets. Here in Southern New Hampshire, the median price for a three bedroom home is approximately $235,000.00 and the stereotypical 20 percent down payment is out of reach for most first-time buyers. However, the truth is, consumers don’t need a 20 percent down payment to purchase a home these days. In some cases, just a 3 percent down payment is required. However, not every lender offers flexible mortgages.
By working with HOMEteam and other housing nonprofits, consumers will learn about the programs that offer 3 percent down-payment mortgages. In addition, they also will be made aware of the down-payment assistance funds available in this community and others. The NeighborWorks survey showed that only one-third of consumers are aware of down- payment programs for middle-income buyers.

While there isn’t an unlimited supply of down-payment assistance, if more consumers knew to seek it and sought information from nonprofit organizations, the homeownership rate would increase. That’s good for individuals, families and New Hampshire.