Jane Veccia, 68 of Johnston had credit card bills spinning out of control. Because her Social Security was not enough for her to pay her housing expenses along with increased health care costs, etc. She began to use her credit cards to buy groceries. Now incurring another debt — her credit card bills — made getting by impossible.

Jane was fortunate to find out about a Homestar Reverse Mortgage and we were able to pay off her home equity loan, credit cards and give her a line of credit that she can use for emergencies and some home repairs. We freed up money she was paying on her home equity loan so that she could use it to cover her grocery expenses instead of charging it.

I saw Jane recently and she said, “I can sleep at night- Thank God for a Reverse Mortgage, I can stay in my home and afford it now.”

Program Types (top of page)

A Homestar Reverse Mortgage allows Seniors 62+ to access the equity in their home and turn it into TAX-FREE Cash - There are no restrictions on how you can use the money.

	HECM: The Home Equity Conversion Mortgage is a Reverse Mortgage designed by the U.S. Department of Housing and Urban Development (HUD) and insured by the Federal Housing Administration (FHA). This is the oldest and most popular program for Reverse Mortgages.
	HOMEKEEPER: The home Keeper Mortgage is Fannie Mae’s proprietary reverse mortgage product. It is a conventional market alternative to the HECM product. It was developed to address needs that could not be met by the HECM program, such as higher property values. Fannie Mae is the nation’s largest investor of home mortgages and a major investor of Reverse Mortgages.

Costs (top of page)

Many of the same costs that you would pay with a traditional mortgage apply to a Reverse Mortgage. Some of these costs include: Mortgage Insurance Premium (MIP) under the HECM program, FHA charges a one-time 2% MIP; origination fee, attorney and title fees, recording fees, appraisal and credit report fees. These costs get added into the Reverse Mortgage, you do not have to pay these costs out-of-pocket. Note: Lenders are given limits on interest rate and origination fees they can charge.

Steps in Getting a Reverse Mortgage (top of page)

	Initial information gathering
	Formal Application
	Reverse Mortgage Counseling Session (via telephone or in-person)
	Loan Processing
	Closing
	Disbursement of your money

Misconceptions (top of page)

The Bank owns my home or can throw me out
This is the farthest from the truth. You retain ownership of your home. When you permanently move out of your home or pass it onto your estate, the loan must be repaid.

Reverse Mortgages are only for desperate seniors
A Reverse Mortgage can also be an excellent financial planning tool to enhance your retirement years. Some need to supplement their income for help with rising health costs, property taxes or home repairs, to name a few. While others may want to enjoy more frequent vacations or buy a second home. Others who may not have planned for retirement can use a Reverse Mortgage and be creative with their financial planning.

My home must be debt-free to qualify for a Reverse Mortgage

Whether you have a traditional mortgage or home equity loan, you may still qualify. Based on your property value, age and interest rate, the amount you are eligible for must first pay off such debts.