If you’re a veteran, you may have heard that you can get a VA reverse mortgage. Unfortunately, this is not true. There is no such thing as a VA reverse mortgage. However, you may be able to get a regular reverse mortgage if you’re a veteran. A reverse mortgage will allow qualified veterans to access a portion of their home equity to supplement their retirement income. They can use the money for any purpose, such as paying off debts, making home improvements, or covering medical expenses.
What is a reverse mortgage?
A reverse mortgage is a type of loan that allows homeowners to borrow against their home equity. The loan does not have to be repaid until the borrower dies, sells the home, or permanently moves out of the home. The biggest benefit of a reverse mortgage is that the borrower does not have to make monthly loan payments and the money received is tax-free.
To be eligible for a HECM reverse mortgage, you must:
- Be at least 62 years old
- Own your home outright or have a low mortgage balance that can be paid off with the proceeds from the reverse mortgage
- Be able to pay property taxes
- Live in the home as your primary residence
Does the VA offer a reverse mortgage?
No, the Department of Veterans Affairs does not offer a reverse mortgage program. However, you may be eligible for a regular reverse mortgage if you’re a veteran.
If you’re interested in getting a reverse mortgage, you can contact a HUD-approved lender to learn more about your options. You can also contact the respective government agency or visit the HUD’s opens in a new windowwebsite for more information on reverse mortgages.
Is there a special offer for veterans who want a reverse mortgage?
We currently have a special discount program for veterans who get a reverse mortgage with us. For a limited time get a $500 credit toward closing costs for getting a reverse mortgage!
For more information opens in a new windowget in touch with me before the offer expires!
What disqualifies you from getting a reverse mortgage?
Some of the main reasons that disqualify you from getting a Reverse Mortgage are: if you have a government loan such as a VA Loan or an FHA Loan; if you have been delinquent on any federal debt in the past 12 months; if you recently had a bankruptcy or foreclosure; if you currently have any judgments or liens against your property. Additionally, if your home needs significant repairs or if you have a very low home value, you may not qualify for a Reverse Mortgage.
What type of mortgage is for eligible veterans?
Besides being eligible for VA Loans, veterans are also eligible for a regular reverse mortgage, as mentioned earlier. It is possible for veterans to take out a VA Loan to finance their home purchase and when he/she reaches retirement age, take out a reverse mortgage loan to supplement their retirement income or pay off an existing loan. Veterans take certainly take advantage of both types of mortgage in order to have a comfortable retirement.
Is it possible to refinance a VA loan into a reverse mortgage?
Yes. A reverse mortgage loan may be used to pay off any outstanding mortgage on the home if there is enough money available. To find out exactly how much you can borrow and whether or not you will be able to pay off your existing mortgage, you’ll need to speak with a lender.
What are the fees associated with a reverse mortgage?
The fees for a HECM (Home equity conversion mortgage) can vary depending on the type of loan, the lender, and the location of the property. However, there are some common fees that are typically charged, such as:
- Origination fee: This is a fee charged by the lender for processing the loan. It can range from 1% to 2% of the loan amount.
- Mortgage insurance premium: This is a fee charged by the government to ensure the loan. The amount will depend on the value of the home and the loan amount.
- Appraisal fee: This is a fee charged by the lender to have the property appraised. The cost will depend on the location of the property and the size of the home.
- Title insurance: This is a fee charged by the lender to ensure the title of the property. The cost will depend on the value of the home and the loan proceeds.
- Closing costs: These are fees charged by the lender to cover the cost of closing the loan. They can include appraisal fees, title insurance, and other miscellaneous costs. The total amount will depend on the type of loan and the lender.
Is it possible to sell my house if I have a reverse mortgage?
There is no pre-payment penalty with a reverse mortgage HECM (home equity conversion mortgage). Therefore, you can opens in a new windowsell your house at any time. If the sale price is more than the loan balance, you will keep the difference. If the sale price is less than the loan balance, you will still be responsible for paying off the remainder of the loan.
What if I want to leave my house to my children?
With HECMs (Home equity conversion mortgages), the loan must be paid off when the last surviving borrower dies or sells the property. If you would like to leave your home to your children, you will need to make arrangements to have the loan paid off at that time. This can be done by selling the property, obtaining a new mortgage, or using other personal assets.
Can you refinance into a VA loan with a reverse mortgage?
A reverse mortgage can be refinanced into a new VA loan. If you have enough equity in your home, you may be able to refinance your reverse mortgage loan into a new VA loan. For instance, if you’re looking to get into a new home, you can use the loan proceeds to as a down payment on the new home.
The Truth About VA Reverse Mortgages
Some companies are misleading people by telling them that they offer VA reverse mortgages. The truth is, there is no such thing as a VA reverse mortgage program. The Department of Veterans Affairs does not offer this type of loan. VA loan program can only be used to finance the purchase of a home. If you are a veteran and are interested in a reverse mortgage, you will need to apply for a reverse mortgage separately. With a VA loan, you still have to meet your monthly payments obligations in order to keep your home.
The Bottom Line
Besides getting a VA mortgage loan, veterans can also apply for a regular reverse mortgage. There is no such thing as VA reverse mortgage loans. If you are considering a reverse mortgage, be sure to speak with a lender to learn more about the fees and requirements associated with this type of loan. You can also opens in a new windowspeak with a consultant who can help you determine if a reverse mortgage is right for you. The specialist can also help with specific requests you may have.