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Have Questions?
For Qualifying or Questions on Reverse Mortgages, please contact:
Janie
Hannah
Mortgage Loan Specialist
205.823.1727
jhannah@aliantbank.com
Alabama Reverse Mortgage Loan
Information
Aliant
Bank and Aliant Mortgage are happy to offer Reverse Mortgage Loans!
Aliant was established in 1900, and by being locally owned and operated
here in Alabama, Aliant Bank can provide you with the proper "hands on"
service that is required with the intricacies of this mortgage product.
Janie Hannah is our Reverse Mortgage loan expert and can be reached at
205.823.1727 or
jhannah@aliantbank.com for more information.
The Reverse Mortgage Loan programs (HECM, or Home Equity Conversion Mortgage, as offered by HUD/FHA) can help seniors with a variety of situations. For example, if the drop in the markets has reduced your retirement assets to the point that you would prefer to draw less from them, or if you actually need additional cash flow, a reverse mortgage may be right for you. Or if you are in need of home repairs or would like to take that long-planned vacation, you might consider a reverse mortgage. And, keep in mind that there is no credit or income qualifying and no monthly payment associated with reverse mortgages!
Below, please find the Basics you need to know and Frequently Asked Questions and Answers, and of course, feel free to call or email Janie for additional reverse mortgage (HECM) loan information at any time!
- All borrowers must be at least 62 years old (anyone on Title to property)
- Must be primary residence, occupied at least 6 months of the year
- Credit & Income are NOT factors
- Money received is not income, so is not taxable, but may affect SSI or Medicaid
- Your taxes and Social Security benefits are typically not affected but you should consult a tax advisor for your own personal tax situation
- No restrictions on how money received is used
- No payments or payoff due until last borrower permanently vacates property; property taxes & homeowner's insurance must be paid and property maintained
REVERSE MORTGAGE Q & A
What is a HECM?
What are the Basic Requirements for a Reverse
Mortgage?
How is a Reverse Mortgage
different from a Home Equity Loan?
How much money can I get?
How can I receive the cash from a Reverse
Mortgage?
How can I use the proceeds?
What if I still owe money on a first or
second mortgage?
Will my current income affect
my eligibility?
How will a Reverse Mortgage
affect my government benefits?
Are interest rates fixed or variable?
Are there fees associated with a Reverse Mortgage?
What has to be repaid when the loan becomes due?
Will a Reverse Mortgage affect
the estate I leave to my heirs?
When will the principal and interest charges
become due?
What if one of the Co-Borrowers
passes away?
A HECM is a Home Equity Conversion Mortgage, and is the formal name for the standard reverse mortgage. The HECM may also be referred to as a "HUD reverse mortgage" or a "FHA reverse mortgage."
What are the Basic Requirements for a Reverse Mortgage?
- 62 years old or older
- Own & occupy your home as your Primary Residence
- Home must meet HUD minimum property standards
- Financial counseling by approved provider is required
How is a Reverse Mortgage different from a Home Equity Loan?
- With a Home Equity Loan, you need to make monthly payments
- With a Reverse Mortgage, you don't need to make monthly mortgage payments as long as you maintain the home as your primary residence
This depends on several factors:
- Your age (age of youngest owner on Deed or Title)
- Type of Reverse Mortgage product selected
- Appraised value of your home
- Mortgage balance(s) outstanding, if any
- FHA lending limits for your area
How can I receive the cash from a Reverse Mortgage?
- Lump sum
- Monthly payments
- Line of credit (take funds when you need them)
- A combination of the above
The things you want and need:
- Monthly Bills
- Home Repairs and/or Improvements
- Health Care & Prescriptions
- Travel
- Major Purchases
- Grandkids
What if I still owe money on a first or second mortgage?
You may still be eligible for a Reverse Mortgage depending on the amount of your remaining mortgage versus the value of your home. The funds from the Reverse Mortgage would first be used to pay off whatever existing mortgages you have on the property.
Will my current income affect my eligibility?
No, you don't make monthly repayments with a Reverse Mortgage, so there are no income qualifications.
How will a Reverse Mortgage affect my government benefits?
The funds from a Reverse Mortgage do not affect regular Social Security or Medicare benefits. However, needs-based benefits, such as Medicaid and Supplemental Security Income (SSI) may be impacted. You should contact a tax professional about your particular situation.
Are interest rates fixed or variable?
Most Reverse Mortgages have variable rates that are tied to a financial index and will vary according to market conditions and product. We offer through our investor both variable and fixed rate Reverse Mortgages. Note: in a rising interest rates market, the balance on a variable rate Reverse Mortgage will grow quicker than on a fixed rate Reverse Mortgage.
Are there fees associated with a Reverse Mortgage?
Most Reverse Mortgage have:
- Origination Fee - Mortgage Insurance Premium
- Closing Costs - Monthly Service Fee
These can be paid from the proceeds of the Reverse Mortgage itself, so there is no immediate burden to you. The costs are added to the principal and paid along with the interest accrued on the total principal balance when the loan becomes due.
What has to be repaid when the loan becomes due?
The reverse mortgage loan balance – including any fees that have been added to the principal and the accrued interest on the total principal balance – needs to be repaid. This is usually done through the sale of the house or other assets. Repaying the Reverse Mortgage through a conventional mortgage refinance is also an option.
Will a Reverse Mortgage affect the estate I leave to my heirs?
When the loan becomes due, you or your estate must repay the lender for the cash received from the Reverse Mortgage plus interest and service fees. You or your estate can choose how to repay the loan – by selling the property, by refinancing, or by using other assets. Any sales proceeds in excess of the loan balance belong to you or your heirs. If you sell your home for a fair market price that is less than the loan balance, then there would be no proceeds to keep, but the bank cannot claim from you or your estate more than the sale amount received.
When will the principal and interest charges become due?
The Reverse Mortgage loan must be paid in full when one of the following occurs:
- All Borrowers permanently move out of the house
- The last surviving Borrower passes away, sells the home, or fails to live in the home for 12 consecutive months
- You fail to pay property taxes or insurance
- You let the property deteriorate beyond what is considered reasonable wear and tear, and do not correct the problems
What if one of the Co-Borrowers passes away?
The surviving borrower can continue to own and live in the home and enjoy the benefits of a Reverse Mortgage.
