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Reverse Mortgages

Are you a mature homeowner who wants more financial security and flexibility?  If so, a HomeStreet Bank Reverse Mortgage may make it possible to increase your cash flow, remodel your home or even take a much needed vacation – all without making monthly mortgage payments.

HomeStreet Bank is a leading home lender with outstanding expertise.  We’ve been making great things happen for our customers for over 90 years.  Our Reverse Mortgage loan officers are dedicated to guiding you to find the best solution for your retirement needs. Each client has specific needs, and we’ll take the time to learn your individual goals and make appropriate recommendations.  So take a deep breath – we’ll be right beside you every step of the way!  

To find out if a Reverse Mortgage can help give you financial peace of mind, contact us at

855-201-9831

What is a Reverse Mortgage?

A reverse mortgage is a government-backed loan available to homeowners 62 years and older that enables a borrower to convert part of the equity in your home into cash.

 

A reverse mortgage may also be used by eligible borrowers to purchase a home and finance a substantial portion of the purchase price.


Many of our customers view the reverse mortgage as another financial planning tool, enabling them to maximize their assets into retirement. More and more often, financially savvy homeowners are seeing reverse mortgages as a means of putting their home equity to work to fund everything from home upgrades to helping fund their retirement.

 

The loan is called a reverse mortgage because the traditional mortgage payback stream is reversed. Instead of the homeowner making monthly payments to a lender (as with a traditional mortgage), the lender makes the payments to the borrower. A unique characteristic of this loan is that unlike traditional home loans, this is a true non-recourse loan. What does that mean to you? As long as you remain current on taxes, insurance, and home repairs, none of your assets (other than your home) will be used to pay off this loan, even if your loan balance becomes greater than the value of your home!

 

The borrower is not required to pay back the loan until the home is sold or otherwise vacated. As long as you live in your home as your primary residence, you are not required to make any monthly payments towards the loan balance. As with any loan, there are certain requirements for the homeowner, and those include remaining current on your tax and insurance payments, as well as keeping up with home maintenance.

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Benefits of a Reverse Mortgage

Homeowners, 62 years and older, are discovering the many benefits of a Reverse Mortgage.

 

Reverse mortgage proceeds may be used for virtually anything you choose. You may use the funds to:

  • Supplement your retirement Income
  • Help fund healthcare costs
  • Retire existing debt, including your current mortgage
  • Pay for home repairs or modifications
  • Help prevent foreclosure
  • Help pay property taxes
  • Establish a reserve for emergencies

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The 4-Step Reverse Mortgage Process

At HomeStreet Bank, our goal is to make the process of getting your Reverse Mortgage as easy as possible. We have been an FHA approved lender for 75 years and our experienced loan officers will be right beside you every step of the way to guide you through the process.

 

1. Meet with a loan officer, make application and complete counseling

Once you discuss your options with a Loan Officer, we’ll ask you to complete an application to get the official process started. We’ll guide you through filling out the paperwork and deciding how you want to receive the proceeds from your reverse mortgage. Your options include:

 

  • Receive disbursement upfront in a lump sum, and the balance as a line of credit Receive equal sums of money for a fixed period of time (months, or years), in term payments
  • Choose to receive equal sums over a period of time (like term payments), until you are no longer occupying the home, with tenure payments
  • Use the proceeds as a line of credit, withdrawing funds as you need them.
  • Or you can even combine more than one of these options. For instance, take some of the funds up front in a lump sum or set them aside in a line of credit, and spread the remainder out over time with either term or tenure payments.

Early in the process it’s understandable that you may not know which option is best for you. That’s where our experienced Reverse Mortgage Loan Officers come in. They’ll discuss your retirement goals and dreams with you to help determine which option suits your lifestyle and financial needs best.

 

Also, as part of the application process, the U.S. Department of Housing and Urban Development (HUD) will require you to attend a third-party counseling session. In this session (approximately an hour long, although times may vary), you’ll learn about all the available options and details of a Reverse Mortgage. Your Loan Officer will provide you with a list of counselors for you to choose from.

 

2. Home Appraisal

After you’ve made application and completed your counseling session, the next step is to get your home appraised. The appraised value of your home, the amount of your home equity, current interest rates, and the age of the youngest borrower will be used to determine the size of reverse mortgage that you are eligible for.

 

3. Loan Closing and Funds Disbursement

Once your loan paperwork has been reviewed and approved by an underwriter, it will be time for the loan to close. We’ll arrange a time and place for the closing– we can even come to your home with the documents for you to sign.

 

Federal law requires a waiting period before we disburse your funds, giving you an opportunity to cancel the transaction. Once the waiting period is over and your funds are disbursed! It’s that easy!!

 

4. Repayment

For the life of the loan, you do not have to make payments. However, as discussed previously, you remain responsible for expenses associated with the upkeep of the home, including the payment of taxes, insurance, and home maintenance. A Reverse Mortgage only becomes due when the borrower(s) no longer occupies the home as their primary residence. In the event of death, your heirs may repay the loan from the sale of the home or refinance the home and keep it in the family.

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Important Details of Reverse Mortgages

While reverse mortgages are more complex than traditional mortgages, we’re here to make sure you have all the information necessary to make a well-informed decision. Listed below are some additional facts regarding reverse mortgages.

 

If you have additional questions not answered here, don’t hesitate to give us a call.

 

  • It is a government requirement that ALL FHA-insured reverse mortgage lenders operate under the same guidelines. This offers peace of mind to borrowers, who can be assured that as long as they are working with an approved lender to get their FHA insured reverse mortgage, the loan will include the required consumer protections.
  • It’s extremely important that borrowers understand the details of the program, since there are important decisions to make during the process. A HomeStreet Reverse Mortgage Loan Officer will explain the details to you, spending as much time with you as necessary to make sure you understand the program, and ensuring your questions have been answered.
  • We won’t rush you. This is an important decision, and we want you to take as much time as you need. Once you’ve made your decision, there are certain tasks you’ll need to complete during the process. With HomeStreet Bank, rest assured you won’t be pressured or rushed during this time.
  • While considering whether a reverse mortgage is right for you, we encourage you to contact your HomeStreet Loan Officer to discuss any questions or concerns you have about the program. We are well versed in the program, and you can be assured that we will provide you with accurate answers and proper guidance. You may find that well-meaning friends or family member may offer advice, but unless they work with this program on a deaily basis, it is likely they do not know all the details, especially those concerning recent changes that have been made to the program. There is a lot of mis-information about this program. All too often, even in the media, we come across someone describing a reverse mortgage and providing erroneous information. Our loan officers have over 50 years combined reverse mortgage lending experience, and you can be confident we welcome and prepared to answer your questions and concerns. In fact, if we don’t think a reverse mortgage is the right product for you, we’ll let you know!
  • A reverse mortgage provides access to a portion of the equity you have in your home. You decide the amount of available funds to draw with the interest assessed only against what you draw. Any available funds that you do not draw remain as equity in your home. You’re not required to make a monthly repayment of the equity or interest on the funds that you draw. When you or your heirs sell the home, the funds you received from the loan and any interest that accrued will be deducted from the sale proceeds with the remaining profit from the sale going to you or your heirs. As long as you live in the home, keep current on tax and insurance payments, and maintain the home, rest assured you can live in the home for as long as your choose.
  • All costs associated with reverse mortgage must be disclosed in detail. All fees, including upfront fees and any recurring fees over the life of the reverse mortgage will be added to the final loan payoff (due only when you vacate the home). You may make a partial or full repayment of this loan at any time without penalty.
  • Since you aren’t required to make monthly mortgage payments on a reverse mortgage, you don’t have to worry about the possibility of foreclosure. Your requirements for keeping your reverse mortgage in good standing are very similar to the requirements of a traditional home mortgage. They include: o At least one of the borrowers must occupy the home as their primary residence o You must stay current on your property taxes and homeowner’s insurance (and if applicable, any HOA dues) o Perform routine maintenance on the home in order to keep it in good repair and insurable.
  • The appraisal may show that there are home repairs necessary as a condition of the loan. In most instances, funds from the reverse mortgage can be earmarked for those repairs, which can be made in the months following closing.
  • Your credit rating will not be used to determine eligibility for the loan. However, if you have any outstanding judgments or liens against you or your property, they will need to be paid at closing. Payment may come out of the reverse mortgage proceeds.
  • If your property is held in a trust, you will need to provide a copy of your trust documents for evaluation. If the terms of the trust are in accordance with HUD guidelines, the loan may close in the name of the trust. If not, you may need to make amendments to the trust in order to proceed with the reverse mortgage.
  • The home must be the borrower’s primary residence, which means you must live there more than 183 days a year. Also, the borrower is only permitted to live away from the home for a total of twelve months. This means that if they find themselves in an extended care situation or an extended out-of-town work situation, the lender must be notified to discuss next steps.
  • Everyone listed on the deed of a home owned by someone seeking a reverse mortgage must be over 62 years old. If one of the owners is under 62, their name cannot be on the title in order to qualify for a reverse mortgage.

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Reverse Mortgage Options

The amount of the funds received from your reverse mortgage is based on a number of factors, including the appraised value of your home, your home equity, the youngest borrower’s age and the interest rate. These will be determined during the loan process and your loan officer will explain the details to you at time of application.

 

Once the loan amount has been determined, you decide how you want to receive money from your Reverse Mortgage:

 

  • An upfront payment
  • Fixed payments for a term you choose
  • A line of credit
  • A combination of the above

Best of all, you can change the way you receive your money in the future. This may be the most flexible loan ever offered!

No two loans are alike. The amount you can receive is based on your age, the value of your home, the county in which you live, and the current interest rate. Our Loan Advisors will meet with you individually in order to determine the amount you qualify for.

 

What costs are associated with a Reverse Mortgage?

Just like a conventional mortgage, the fees associated with a Reverse Mortgage include title insurance, an appraisal fee, a loan origination fee, recording fees and escrow costs. Unique to FHA loans, there is also a Mortgage Insurance Premium. We encourage you to discuss with one of our loan officers how this may provide you benefit (note: this is the item that enables this to be a true non-recourse loan). Most people include these fees in the loan itself, and therefore are not out of pocket any money at time of closing.

 

How is the loan repaid?

Most commonly, your estate repays a Reverse Mortgage at the time of passing. If your heirs choose to keep the home, they may refinance to a conventional mortgage. If they prefer to sell the home, they are entitled to all the proceeds after the loan has been repaid (remember, this is a non-recourse loan, so at no time will you owe more than the value of the house). If you choose to move, the loan is repaid upon sale of the house, and you keep the remaining equity. If there is no remaining equity, and as long as you are in compliance with the loan requirements, none of your other assets will be used to pay off this loan.

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Retirement Planning

At HomeStreet, we take a very personal approach to identifying and helping you to meet your retirement needs. We use the following process to make sure you explore all of the options available to you:

 

Discovery

We take time to talk with you and gain an understanding of your needs and goals. If a Reverse Mortgage is not a good fit, we will be the first to tell you!

 

Solutions

If we know of another product or service that may benefit you instead of, or in addition to, a Reverse Mortgage, we will let you know. And since HomeStreet Bank is a full service financial institution, we may even be able to refer you to one of our trusted colleagues to help you with other products that may provide a better financial solution for you.

 

Implementation

Through your consultation, if it is determined that a Reverse Mortgage is a good fit for you, and you decide you want to move forward, we will work with you throughout the entire loan process. We will keep you so well-informed along the way that you may actually get tired of hearing from us!

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Purchase a home with a Reverse Mortgage

Although reverse mortgages are typically used to eliminate debt, pay for healthcare and/or cover daily living expenses, a growing number of borrowers are using them to purchase a home that better suits their needs.

 

The advantage of a reverse mortgage for purchase is that the new home is purchased outright. Talk to a HomeStreet Bank Reverse Mortgage loan officer to find out how!

 

While many people want to continue living in their current home for as long as possible, there are times where this may not be the best option (i.e.: far away from family, too much maintenance required, too large, too many stairs). HECM (Home Equity Conversion Mortgage) for Purchase allows qualifying senior borrower to downsize into a place better suited to their needs and closer to friends and family. If it’s a goal of the homeowner to “age in place,” downsizing or moving into a more suitable home may be necessary in order to achieve that goal.

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You want your parents to enjoy retirement, don’t you

Of course you do! A comfortable, secure retirement – isn’t that what we all want for our loved ones?

 

If you have family members who are spending more time worrying about finances than they are enjoying their retirement, a Reverse Mortgage may offer a solution.

 

A Reverse Mortgage provides a way for homeowners age 62 and older to access a portion of the equity in their home, without the responsibility of paying monthly mortgage payments (note: the homeowner must remain current on taxes, insurance and maintenance. Plus, to qualify for a reverse mortgage, there are no income or credit score requirements other than those necessary to pay outstanding property obligations. Even those who have gone through a bankruptcy may qualify for a reverse mortgage.

 

Do your parents need extra income to

  • Consolidate debt or eliminate monthly mortgage payments?*
  • Cover unplanned medical expenses and pay for in-home care?
  • Remain in their home to “age in place?”
  • Remodel or modify their home to fit their current needs?
  • Avoid foreclosure?
  • Or simply supplement their retirement income?

If so, make the first move to help your parents enjoy their retirement to its fullest and live in comfort during the coming years. Contact a HomeStreet Bank Reverse Mortgage loan officer to learn how a Reverse Mortgage might help them achieve these goals. As one of the largest and most experienced mortgage lenders in the Northwest, HomeStreet Bank is ready to help you give your parents the retirement they deserve. Contact a Reverse Mortgage Loan Officer today to learn more about Reverse Mortgages.

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Did you know

  • Almost 90 percent of people over 65 say they want to live in their home and community as long as possible.
  • Your parents can use a Reverse mortgage to purchase a home without making monthly mortgage payments*.

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A Solution for your Senior Clients

As a financial or legal advisor, you’ll likely find that that your senior clients’ needs are vastly different than those of your younger clientele, presenting different challenges when it comes making financial recommendations. A reverse mortgage may be the right solution for the unique needs of your clients aged 62 and over.

 

It’s no secret that many retirees and people nearing retirement have seen drastic reductions to their nest eggs the past several years, even when using the best investment advisors. While a younger investor has the benefit of time to see their investments fully recover, this may not be true for retirees. It could take years for their investments to return to their previous levels – years they simply don’t have!

 

Also, when a senior faces significant unexpected expenses, a reverse mortgage can provide them a means for obtaining money without dipping into their retirement funds. The loan can generate liquidity to cover these unexpected expenses, without forcing them from their home or into financial difficulty. A reverse mortgage can also be used as a tool for avoiding foreclosure, paying off non-secured high-interest debt or to satisfy judgments and tax liens.

 

To learn more about how a reverse mortgage can be a valuable financial tool for your senior clients, and their estate planning needs, contact one of our Reverse Mortgage Loan Officers.

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