For more information, please call David Cohn, Vice President at (312) 491-7124 or Wayne Landon at (312) 491-7206.
Things to look out for when getting a Reverse Mortgage
When given the option, it is better to deal directly with a bank because they are fully regulated by the Federal Government.
It is probably best to find a local bank in your area because they are familiar with property values and the local lending laws.
You should ask if the lender has done reverse mortgages in your area.
Beware of overly aggressive loan officers trying to get specific information like your Social Security Number before you have done the required counseling.
The lender is not allowed to charge you any costs until you have spoken with a HUD approved counselor.
Use a check payable to the lending institution when paying deposits towards loan costs.
Never make a check payable to a loan officer or give them cash.
Common Misperceptions of Reverse Mortgages
The bank will take my home.
No, the bank will not take your home. Throughout the life of the reverse mortgage, you will continue to own your home and retain title. The loan is due when your home is sold. The amount of money owed to the bank is any money borrowed added to whatever interest has accumulated plus the other costs financed through the loan amount. The remainder is given to either you or your heirs.
A Reverse Mortgage will use all the equity in my home.
While using a reverse mortgage, your home may appreciate in value. This could mean that some equity would be left at the end of the loan.
I can’t get a reverse mortgage because I am in the middle of a bankruptcy or foreclosure.
With permission from the courts and all parties involved, you may be able to get a reverse mortgage.
I will not qualify for a reverse mortgage because I have bad credit or little income.
There are no credit or income qualifications. The only requirement is the ability to obtain a clear title on the property.
If I move into a nursing home, the loan becomes due.
This is true when the last borrower leaves the home, not just one of them.
I have to tell or ask the bank’s permission to spend the money from a reverse mortgage.
Absolutely not! The money is yours to spend any way you like.
The bank gets to participate in the appreciation of my home.
None of South Central Bank’s reverse mortgage programs contain sharing in equity appreciation. Some bank’s reverse mortgage loans were structured that way in the early 1990s. These were the loans people could have ended up owing more money than the value of their homes. This is why all reverse mortgages are non-recourse and you and your heirs can never owe more than the value of your home.
