Reverse Mortgage
What Is A Reverse Mortgage And Other Frequently Asked Questions
If you are 62 or older, a reverse mortgage is a great way to take advantage of the equity in your home without having to sell your home, and eliminate your monthly mortgage payment.
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What is a reverse mortgage?
A reverse mortgage loan is different than a traditional mortgage. With a traditional mortgage loan you make monthly mortgage payments, but with a reverse mortgage loan the lender pays you money through monthly installments, a one-time lump sum payment, a line of credit or a combination of a line of credit and monthly installments. The money that you receive is dependent on your age, the value of your home and the current interest rate.
You keep the title to your home. Your home is part of your estate. You are simply using the reverse mortgage to pull equity from your home.
What is the advantage of a reverse mortgage?
The biggest advantage of a reverse mortgage are the payments to you! You can receive a lump sum, monthly installments, a line of credit, or a combination of payment types.
Another advantage of a reverse mortgage loan is that you are not required to pay the loan back until the home is no longer your primary residence or you fail to maintain the home, or fail to pay property taxes and/or homeowner's insurance or do not otherwise comply with the terms of the loan.
If you’re aged 62 or older and own your home you might be eligible for a reverse mortgage loan. Contact us to find out more about reverse mortgage loans and ways to make it work for you.
Why would I avoid a reverse mortgage?
You would rather leave the equity for your heirs
Reverse mortgages allow you to pull equity from a home. Once that equity is converted to cash, it is no longer there for your heirs. When they sell they home or if they decide to keep the home, they must repay the balance of the equity owed on the home.
You live with someone who is under 62
If a borrower dies, sells their home, or moves out, the loan immediately becomes due. One solution is to list your boarders on the loan paperwork; however, no one living with you under the age of 62 may be a borrower on the reverse mortgage.
If you are planning or unexpectedly need to move
You must be healthy enough to continue dwelling within the home. If your health declines to the point where you must relocate to assisted living, the loan must be repaid in full, as the home no longer qualifies as a primary residence.
Moving into a nursing home or an assisted living facility for more than 12 consecutive months is considered a permanent move under reverse mortgage regulations. For this reason, borrowers are required to certify in writing each year that they still live in the home they're borrowing against, in order to avoid foreclosure. you’re contemplating moving for health concerns or other reasons, a reverse mortgage is probably unwise because in the short-run, steep up-front costs make such loans economically impractical.
If you would like more information about reverse loan options, contact us today! Or start your loan application.
How does a reverse mortgage work?
The FHA-insured HECM (reverse mortgage) has a formula to determine the amount you are eligible to borrow.
The amount available is dependent on several factors:
- Your age
- The value of your home
- The current interest rates and terms being offered by lenders
These factors determine your limits and the amount you can borrow. The formula represents the maximum amount FHA has determined you may borrow with a Reverse Mortgage. Note, all liens must be paid off, and any fees/costs associated with your loan must be paid off. The remaining funds can be distributed a few different ways.
- Lump Sum
- Line of Credit
- Monthly Payments
- Some combination of the three options above
The loan is due when a repayment event occurs. This may include:
- Death of the last surviving borrower on the loan
- Borrowers permanently moving out of the home
- Borrows failing to live in the home for 12 consecutive months
- Failure to pay property taxes or insurance
- Failure to maintain the property
You still have the right to sell your home at anytime. Proceeds from the sale will first payoff your current balance. The remaining funds are yours. There is no prepayment penalty.
If you would like more information about reverse mortgage loan options, contact us today! Or start your reverse mortgage application.
Buying a new home while keeping your current one can be a smart investment strategy—but it does come with financial challenges, especially when it comes to managing debt. Here are ways you can offset or manage the debt to make this dual-home scenario work: 🔑 1. Rent Out Your Current Home Offset: Use rental income to cover the mortgage on your existing home. Pros: Helps cover the mortgage or even generate cash flow. Note: Lenders often count a portion of projected rental income toward your debt-to-income (DTI) ratio. 💰 2. Use Equity from Your Current Home Offset: Take out a cash-out refinance, HELOC, or home equity loan to fund the down payment or reduce new home debt. Pro: Lower the mortgage balance on the new home or avoid PMI. Con: Increases debt on the existing property and monthly obligations. 📉 3. Refinance to Lower Monthly Payments Offset: Refinance either or both homes to reduce interest rates and monthly payments. Goal: Free up cash to manage both mortgages more easily. 💼 4. Increase Your Income or Reduce Expenses Offset: Boost your DTI ratio eligibility or free up monthly cash. Ways to Increase Income: Side gig, bonuses, rental income, etc. Ways to Cut Costs: Pay down other debts, reduce discretionary spending. 🏘️ 5. House Hack Offset: Live in part of one home (e.g., basement, ADU) and rent the other part out. Useful If: You’re open to creative living arrangements to reduce out-of-pocket costs. 🧾 6. Tax Deductions Offset: If one home is rented, you can deduct expenses like mortgage interest, taxes, repairs, and depreciation. Talk to a CPA to maximize tax benefits. 📊 7. Consider a Bridge Loan (Temporary Fix) Offset: Use a bridge loan to cover the gap between buying a new home and selling (or refinancing) the old one later. Note: Short-term, higher-interest debt—use with a clear exit strategy. Example Scenario: You keep your current home and rent it out for $2,000/month. Your mortgage on that property is $1,500/month. The $500/month profit helps cover your new home's mortgage, easing your debt load and possibly helping with mortgage approval. tune in and learn at https://www.ddamortgage.com/blog Didier Malagies nmls#212566 dda mortgage nmls#324329
A Specific Power of Attorney (POA) for a mortgage closing is a legal document that allows one person (the principal) to authorize another person (the agent or attorney-in-fact) to act on their behalf only for the purpose of completing a mortgage transaction—typically when the principal cannot be physically present at the closing. Key Points of How It Works: ✅ Purpose-Specific Authorization The document limits the agent’s authority strictly to the mortgage transaction, such as signing loan documents, the note, deed of trust, and other closing forms. It does not grant broad financial powers—only what’s specifically listed. ✅ Common Uses When the borrower is: Out of the country or state In the military Hospitalized or otherwise unavailable on closing day ✅ Lender and Title Company Approval Required The lender must approve the POA in advance. Some lenders are strict and may require the POA to be: Dated close to the closing date Notarized and possibly recorded The title company must also approve the document to ensure it's valid and complies with local regulations. ✅ Execution Requirements It must: Clearly describe the property address State the exact powers being granted (e.g., “to execute all documents required to close on the mortgage loan for [property address]”) Be notarized, and in some states, also witnessed Sometimes be recorded with the county clerk if it’s used to sign a deed or deed of trust ✅ Expiration Some are written to expire after a short period (e.g., 30 or 60 days), or immediately after closing. ✅ Revocation The principal can revoke it at any time before the closing by notifying the agent and any third parties relying on it (like the lender or title company) in writing. Example Scenario Suppose Jane is buying a home but will be overseas on the closing date. She signs a Specific POA authorizing her sister to sign all documents necessary to complete the mortgage transaction for the home at 123 Main St. The lender and title company review and approve the POA ahead of time. On the day of closing, Jane's sister signs the documents on her behalf, using the POA. tune in and learn at https://www.ddamortgage.com/blog Didier Malagies nmls#212566 dda mortgage nmls#324329
Buying a condo is different from purchasing a single-family home, and it's important to understand the unique consid Here’s a simple and clear breakdown of how AI is making second mortgages easier for homeowners and lenders alike: 🔍 What Is a Second Mortgage? A second mortgage lets homeowners borrow against their home's equity, without replacing their existing mortgage. Common types: Home Equity Loan (lump sum) HELOC (Home Equity Line of Credit) 🤖 How AI Makes Second Mortgages Easier 1. Faster Approval Times AI streamlines credit, income, and property evaluations. Cuts days or weeks off traditional underwriting. 2. Smarter Risk Assessment Machine learning analyzes borrower profiles more accurately than standard models. Lenders can offer better rates to lower-risk borrowers. 3. Better Property Valuations AI-powered AVMs (automated valuation models) assess home value using up-to-date market data, photos, and even satellite imagery. 4. Chatbots & Virtual Assistants Available 24/7 to answer questions, guide users through the process, and gather documents. Reduces human error and friction for borrowers. 5. Fraud Detection AI systems detect unusual patterns in applications to flag potential fraud before approval. 6. Personalized Loan Offers Based on data from credit, home value, and income, AI can recommend the right loan product—tailored to the borrower’s needs. 🏡 Why It Matters for You Quicker access to cash Less paperwork More competitive offers Lower costs thanks to automation If you want, I can help you compare second mortgage options, estimate your equity, or show AI-powered lenders making waves in 2025. Just let me know! tune in and learn at https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329
Buying a condo is different from purchasing a single-family home, and it's important to understand the unique considerations involved. Here’s a comprehensive list of what you should know before buying a condo: 1. Understand What You're Buying Ownership: With a condo, you own the interior of your unit, but share ownership of common areas (lobby, pool, gym, etc.) with other residents. HOA (Homeowners Association): This governing body manages shared areas and enforces rules. 2. Evaluate the HOA Fees: Ask for the current monthly fees and whether they’re likely to increase. What’s Included: See what the fees cover (e.g., water, insurance, maintenance, amenities). Reserve Fund: Check if the HOA has a healthy reserve fund for unexpected repairs. Rules and Bylaws: Review pet policies, rental restrictions, noise rules, and renovation limitations. Meeting Minutes: Request past meeting minutes to identify ongoing disputes, major projects, or complaints. 3. Financial Health of the Building Special Assessments: Are there upcoming or recent one-time fees for big repairs? Delinquency Rate: A high number of owners not paying dues can be a red flag. Insurance Coverage: Confirm that the building has proper insurance coverage (you’ll need your own unit insurance too). 4. Location and Building Condition Location: Evaluate the neighborhood, proximity to work/public transit, schools (if relevant), and future development. Building Age and Maintenance: Older buildings may need major upgrades; review recent renovations (roof, elevators, HVAC). Noise and Privacy: Check unit positioning and wall/floor sound insulation. 5. Unit-Specific Considerations HOA Restrictions on Renovations: Can you remodel the kitchen? Change flooring? Storage and Parking: Confirm assigned parking, storage lockers, bike racks, etc. Utilities: Understand what utilities are included and how they’re billed. Views and Natural Light: Are there any plans to build next door that could block your view? 6. Legal and Resale Aspects Title and Liens: Ensure there are no legal issues tied to the unit or HOA. Resale Value: Check sales trends in the building; talk to a local agent about demand for similar condos. Occupancy Rate: Higher owner-occupancy rates often mean better-maintained buildings. 7. Financing Lender Requirements: Not all lenders finance condos easily—make sure the condo is on their approved list. Warrantable vs. Non-Warrantable: Some buildings are considered riskier (too many renters, lawsuits, etc.) and may need special financing. 8. Inspections and Disclosures Professional Inspection: Even if the HOA handles exterior maintenance, get an inspection for internal systems (plumbing, electrical, HVAC). Disclosures: Review all seller-provided documents carefully—especially HOA disclosures and financials. tune in and learn at https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329
Locking in your interest rate can be a smart move under the right circumstances—especially when there's economic uncertainty, like tariffs, geopolitical tension, or volatile inflation. Here are a few key considerations to help you decide: ✅ Reasons to Lock in Now: Rising Rate Environment: If inflation is persistent and the Fed continues to signal rate hikes (or holding rates higher for longer), mortgage and loan rates might increase. Market Volatility: Tariffs and global economic uncertainty can lead to unpredictable swings in rates. Locking in now protects you from upward movement. You’re Close to Closing: If you're within 30-60 days of needing the loan (e.g., buying a house), rate locks are usually worth it. Peace of Mind: Locking gives you certainty in an uncertain time, helping you budget better and avoid surprises. ❌ Reasons to Hold Off: You Expect Rates to Drop: If there's strong indication that rates will fall due to recession fears or easing inflation, waiting could save money. You're Not Ready to Act: If your closing is still months away or you're just shopping around, locking too early may be premature (and rate locks often have time limits and fees) tune in and learn more at https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329
I do Residential Mortgages in the State of Florida only, that is where I am licensed. Most of my business is from Pinellas, Hillsborough, and Pasco County. I am doing more loans all over the State as time goes on. I love to go to my closings and will drive up to 1 hour to be there at your closing. I do Fnma/FHMC, FHA, VA, C/p, Nonqm mortgages. On the Commercial side the whole Country is open and if you are having difficulty with your lender and not going anywhere, go to www.ddamortgage.com and complete a form and I will get back with you. Technology has made it so easy to help get your mortgage processed and closed I am always available to help out and I answer your questions and teach you along the way tune in and learn at https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329
When choosing a mortgage lender, it's important to carefully compare several key factors to ensure you get the best deal and the right fit for your financial situation. Here’s who you might consider and how to evaluate them: 1. Types of Lenders to Consider Banks: Traditional option; may offer relationship discounts if you have accounts there. Credit Unions: Often have lower rates and fees; membership may be required. Mortgage Brokers: Shop multiple lenders on your behalf but may charge a broker fee. Online Lenders: Often streamlined and convenient; compare their rates carefully. Non-bank lenders: Can be more flexible for unique financial situations. 2. What to Look For Interest Rates: Fixed or variable—get quotes from multiple sources to compare. Fees: Application, origination, underwriting, appraisal, and closing costs. Loan Types Offered: Conventional, FHA, VA, jumbo, etc., based on your eligibility. Customer Service: Look for responsive, transparent, and helpful communication. Reputation: Read reviews and check ratings from the Better Business Bureau or Trustpilot. Preapproval Process: A good lender should make this easy and informative. 3. Best Practice Get at least 3 quotes from different lenders. Ask for a Loan Estimate from each so you can compare total costs side-by-side. Consider long-term value, not just the lowest monthly payment—compare APRs. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329
A bridge loan is a short-term loan used to "bridge the gap" between buying a new home and selling your current one. It's typically used by homebuyers who need funds for a down paymenme before their existing home sells. Here's how it works: You own a current home and want to buy a new one. You haven't sold your current home yet, so your cash is tied up in its equity. A bridge loan gives you access to that equity—before the sale closes—so you can make a down payment or cover closing costs on the new home. The bridge loan is secured by your current home, and repayment typically comes from the proceeds once it sells. Key Features: Term: Usually 6–12 months. Interest Rates: Higher than a traditional mortgage. Repayment: Often interest-only during the term, with a balloon payment (full payoff) at the end. Loan Amount: Usually up to 80% of the combined value of both homes (existing + new). Example: Your current home is worth $400,000 with a $250,000 mortgage (so $150,000 equity). You want to buy a $500,000 home. A bridge loan lets you borrow against some of that $150,000 equity to cover the new home's down payment while waiting for the current home to sell. Is this conversation helpful so far? tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329
1. Cash-Out Refinance How it works: You replace your current mortgage with a new, larger loan and take the difference out in cash. Pros: Often lower interest rates compared to other methods. Longer repayment terms. Cons: Closing costs (typically 2–5% of the loan amount). Resets your loan term (could be 15, 20, or 30 years). Tougher underwriting for investment properties vs primary residences. 2. Home Equity Line of Credit (HELOC) How it works: You get a revolving line of credit based on your property’s equity. Pros: Flexibility — borrow what you need, when you need it. Pay interest only on what you draw. Cons: HELOCs for investment properties are harder to get and may have higher rates. Variable interest rates (payments can increase). 3. Home Equity Loan ("Second Mortgage") How it works: A lump-sum loan secured by your property's equity, separate from your existing mortgage. Pros: Fixed interest rates and predictable payments. Cons: Higher rates than primary mortgages. Separate loan payment on top of your existing mortgage. 4. Sell the Property How it works: You sell the investment property and realize your equity as cash. Pros: Immediate full access to equity. No debt obligation. Cons: Capital gains taxes may apply. You lose future appreciation and cash flow. 5. Portfolio Loan How it works: A loan based on a group (portfolio) of your properties' combined value and cash flow. Pros: Useful if you have multiple properties. Lenders may be more flexible on qualifications. Cons: Complex underwriting. Higher costs. 6. Private or Hard Money Loan How it works: Short-term, high-interest loan based on property value, not personal credit. Pros: Fast funding (days instead of weeks). Less strict underwriting. Cons: Very high interest rates (often 8%–15%+). Short loan terms (often 6–24 months). 7. Seller Financing (if you're buying another property) How it works: If you own a property free and clear, you could "sell" it and carry financing, creating cash flow and upfront cash through a down payment. Pros: Passive income from note payments. Cons: Risk if the buyer defaults. Key Factors to Think About: How quickly do you need the cash? How much do you want to borrow? How long do you want to be repaying it? How the new debt impacts your overall portfolio. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329
