What is a Reverse Mortgage in Franklin, WI?

Types of Reverse Mortgages

There are many types of reverse mortgage loans. Here are some examples:

1. Home Equity Conversion Mortgages (HECMs)
2. Proprietary Reverse Mortgages
3. Single-Purpose Reverse Mortgages

Home Equity Conversion Mortgages (HECMs)

The home equity conversion mortgage (HECM) is the most common type of reverse mortgage and is insured by the Federal Housing Administration (FHA). HECMs are available through FHA approved lenders and offer more payment options than other types. HECMs can have either fixed or variable interest rates, which can influence borrowing limits and payment options.

Proprietary Reverse Mortgages

These are private loans backed by private lenders. Good for those with high value homes and need more equity than HECMs allow.



Single-Purpose Reverse Mortgages

As the name implies, single-purpose reverse mortgages are for a specific purpose such as home repairs or property taxes. They have lower costs but may not be available in all areas.

How Reverse Mortgages Work

Reverse mortgages work by allowing homeowners to borrow against the equity in their home. With most reverse mortgages, borrowers have the right to cancel the loan within a specified period after closing. The loan balance grows over time as payments are made to the homeowner and interest and servicing fees accrue. Borrowers don’t have to make monthly payments on the loan but must continue to pay property taxes, insurance and maintain the home.

Reverse Mortgage vs. Home Equity Loan

A reverse mortgage loan and a home equity loan both allow homeowners to tap into their home equity but work differently. A home equity loan requires monthly payments and has a fixed term. A reverse mortgage has no monthly payments and the loan is repaid when the homeowner sells the home or dies.

Eligibility for a Reverse Mortgage in Franklin, WI

To qualify for a reverse mortgage in Franklin:

• Age: 62 or older
• Ownership: The home must be owned outright or have a small mortgage balance that can be paid off with the reverse mortgage.
• Primary Residence: The home must be the borrower’s primary residence.
• Property Types: Single family homes, 2–4-unit homes with one unit occupied by the borrower, FHA approved condos, and certain manufactured homes.

Payment Options and Payout Methods

Reverse mortgage borrowers can choose from:

1. Lump Sum: Get a one-time lump sum payment at the closing of the loan.
2. Monthly Payments: Get a fixed monthly cash advance for a set period or for as long as the homeowner lives in the home.
3. Line of Credit: Draw funds as needed, good for unexpected expenses.

The Costs

While reverse mortgages have many benefits, they also have costs:

• Interest Rates: Reverse mortgages have either fixed rates or variable rates and are generally higher than regular mortgages.
• Closing Costs: Origination fees, mortgage insurance premiums and third party fees.
• Servicing Fees: Lenders may charge monthly fees to service the loan.

Reverse Mortgages for Franklin Homeowners

1. No Monthly Mortgage Payments: Get financial relief by eliminating monthly mortgage payments.
2. Tax-Free Cash: Funds received are usually tax-free.
3. Keep Your Home: Borrowers keep ownership of their home and can stay in it.
4. Flexible Payment Options: Customize how and when you receive funds.

Reverse Mortgage Borrower Responsibilities

Even though reverse mortgage borrowers don’t have to make monthly mortgage payments they still have to:

• Property Taxes: Pay property taxes.
• Homeowners Insurance: Keep a valid insurance policy on the home.
• Home Maintenance: Keep the home in good condition as outlined in the loan agreement.

Special Notes for Franklin, WI

Franklin is in an area that gets hit with severe weather. Homeowners should consider the impact of a natural disaster on their property and make sure they have adequate insurance. Franklin is also in Milwaukee County which has local regulations and resources for homeowners.

Private Lenders

While the FHA insures HECMs, proprietary reverse mortgages are offered by private lenders. Homeowners should shop around and compare offers from multiple lenders to get the best deal. Private lenders may offer larger payouts for higher value homes.

Apply for a Reverse Mortgage in Franklin, WI

To apply for a reverse mortgage in Franklin:

1. Counseling: Get counseled by an approved counselor to understand the costs, risks and benefits of a reverse mortgage.
2. Application: Fill out a reverse mortgage application with a lender.
3. Home Inspection: Have the home inspected to make sure it meets the eligibility requirements.
4. Loan Approval: Once approved, choose your payment option.
5. Closing: Sign the final documents and choose how you want to receive your funds.

Reverse Mortgage FAQs

What If the Loan Balance Exceeds the Home’s Value?

HECM reverse mortgages are non-recourse loans, so the borrower or heirs are not responsible for paying more than the home’s value when the loan becomes due.

Will a Reverse Mortgage Affect Social Security or Medicare?

Generally, a reverse mortgage does not affect Social Security or Medicare, but it can affect eligibility for needs-based programs like Medicaid.

What is a Co-Borrower?

A co-borrower is another individual who is also responsible for the reverse mortgage loan. Having a co-borrower, especially a spouse, ensures they can stay in the home if the primary borrower passes away or moves out.

Why Dennis Kahn for Your Reverse Mortgage in Franklin, WI?

When looking for a reverse mortgage provider working with an experienced and knowledgeable expert makes all the difference. Dennis Kahn, a mortgage professional with Homestead Mortgage is the way to go for Franklin, WI homeowners.

Experience

With 20+ years in the mortgage industry Dennis Kahn has been specializing in reverse mortgages and has helped hundreds of older homeowners tap into their home equity. He has a deep understanding of the reverse mortgage rules and regulations, so you get expert guidance specific to your situation.

Personal Service

Dennis Kahn believes in a client-first approach and offers one on one consultations to help you explore your options for your financial goals. He takes the time to understand your needs and provides customized solutions whether you are looking at a HECM reverse mortgage, a proprietary reverse mortgage or any other type of reverse mortgage product.

Contact Dennis Kahn

By choosing Dennis Kahn for your reverse mortgage, you are partnering with a professional who puts your financial interests first. Whether you need to tap into your home equity for home repairs, supplement retirement income or secure your financial future Dennis Kahn has the knowledge and experience to make the process easy and rewarding.

Contact Dennis Kahn today to see how a reverse mortgage can secure your financial future and give you peace of mind. With him you can feel confident in the reverse mortgage process and unlock your home equity.