Reverse Mortgage Myths

Contrary to popular belief, you and your estate continue to retain ownership of your home. The lender’s interest is limited to the outstanding loan balance as a lien on the property. Upon the last remaining borrower permanently leaving the home, the lender gets paid off a sum totaling the amount borrowed plus interest accrued over the life of the loan.

Reverse mortgages are non-recourse loans, so when the property is sold and if the sale of the home doesn’t cover the balance of the loan, the borrower or the heirs are not responsible for the difference of the loan. The FHA actually covers the difference. 

How much home equity is left when you leave the home depends on how much you borrow, how much interest has accrued over the life of the loan and the value of the home at the time of sale. 

It’s important to remember that home equity is only one piece of the pie. While you may leave less home equity to your heirs, it doesn’t necessarily mean that you will leave less of an overall inheritance. Utilizing your home equity tax efficiently, by way of a reverse mortgage, may allow you to better manage retirements risks such as 

  • Market Risk
  • Sequence of Return Risk
  • Long–Term Care Risk
  • Taxation Risk
  • Regulatory Risk
  • Longevity risk

How you navigate these risks will determine the success of your legacy.

Proceeds can be used however you see fit.  There are no restrictions on what you can do with your money. We recommend careful consideration of all options. Consult with a tax specialist or financial adviser before making any investments.

Many borrowers actually use the reverse mortgage loan to pay off an existing mortgage and eliminate monthly mortgage payments. Paying off the existing mortgage and any other liens is required as part of the loan. It is the borrower’s responsibility to continue to pay for property taxes, homeowner’s insurance and home maintenance.

The perception that reverse mortgage loans are only for ‘financially strapped’ borrowers is changing. Affluent borrowers with multi-million-dollar homes and healthy retirement assets are using reverse mortgage loans as part of their financial and estate planning, and are working closely with their financial advisers and estate attorneys to secure a better retirement.

In fact, reverse mortgage rates are on par with traditional mortgage rates. Borrowers may choose from fixed or variable rate options. Interest only accrues on the actual amount borrowed, NOT on the unused portion of funds available.

Closing costs, which include title, recordation, loan origination and state or county fees, are the same as with traditional mortgages. Reverse mortgages are more expensive than traditional loans because they also include reverse mortgage insurance, which provides important protections for borrowers.

There is an up-front mortgage insurance premium (MIP) required on all HECM reverse mortgages. This “MIP” is a flat 2 percent premium based on the maximum lending amount of $765,600 or your home’s appraised value, whichever is less.

Ongoing MIP rates are currently 0.5 percent of the outstanding loan balance, accrued annually and paid when the loan is due.

While a traditional mortgage requires monthly payments, a reverse mortgage pays you.

Reverse mortgages are based on residual income, which is calculated by adding monthly income and deducting debt payments, utilities and maintenance costs estimated by the home’s geographic region and square footage. Qualified borrowers, especially those on a fixed or limited income, will have a far easier time qualifying for reverse mortgages than traditional mortgage loans.

It’s tougher now to get a reverse mortgage than in years past due to FHA’s tightening of qualifying standards. Even if you meet today’s qualifications, you might not qualify at a later date. Other factors to consider are as follows:

  • Higher interest rates – Current interest rates now are at historic lows. It’s likely that rates will go up over time.
  • Lower property values – Property values across the country have remained strong during recent years. In the event of a market correction, your home value may decrease; as a result, you may not qualify for as much money or you may not qualify at all.
  • Line of credit that grows with you – For borrowers who don’t necessarily need funds now, establishing a standby line of credit which offers a guaranteed rate of growth will enable you to maximize the amount of home equity you can borrow. Starting the line of credit sooner than later will yield a large bucket of money for later in life.

Fact: Reverse mortgage payouts generally do not affect regular Social Security or Medicare benefits. However, needs-based benefits, such as Supplemental Security Income or Medicaid, may be affected. Consult with a financial professional about your individual situation.

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Joseph Susserman

With 10+ years of experience, Joe Susserman is a top-level producer with a proven track record of success in the reverse mortgage space.

At The Steven J. Sless Group of PRMI, Joe educates homeowners to determine if a reverse mortgage will meet their financial goals. He then helps clients to navigate through all steps of the loan process.

“I enjoy assisting seniors to help them live a better retirement,” said Susserman, who has three sons and two grandchildren. Joe says, “I aim to provide the highest level of customer service and be responsive to all of my clients’ needs.”

JOSEPH SUSSERMAN: NMLS 986529. Maryland Department of Labor, Licensing & Regulation Commissioner of Financial Regulation #5511.

Steven J. Sless, CLTC®

Steven J. Sless has become regarded as the “go-to housing wealth source” by various media outlets. Bringing nearly 20 years of mortgage industry experience, he founded The Steven J. Sless Group of PRMI, the lender’s national division dealing exclusively with reverse mortgages.

A powerful speaker and communicator, Steven regularly gives seminars and learning workshops for homeowners 60+, their family and trusted advisors. Exploring the nuts and bolts of reverse mortgages, Steven presents the facts, dispels common myths and misperceptions, and answers questions so his audiences can make informed decisions and take control of their retirement.

In 2019, Steven earned the CLTC®: Certified Long-Term Care professional designation, demonstrating that he also has acquired the critical tools necessary to discuss the subject of longevity and its acute consequences on a client’s family – financially, physically and emotionally – years down the road.

“Possessing knowledge of long-term care and what decisions must be made before care is needed will allow me to better serve the needs of my clients,” Steven says. “Having a deeper understanding of my clients’ needs will allow me to have a more advanced conversation with them, their family and trusted advisors.”

In addition to helping clients and educating colleagues and audiences, Steven loves spending time with his wife and two young daughters. He also is an avid fan of the Baltimore Ravens and Orioles, and he enjoys playing golf and cooking.

Steven J. Sless NMLS# 298581 . Licensed by the Delaware State Bank Commissioner to engage in business in Delaware 5644 expires on 12/31/2021. Georgia Residential Mortgage Licensee. Georgia Department of Banking and Finance 6521. Indiana-Department of Financial Institutions Consumer Credit Division, First Lien License 11069 Secretary of State Securities Commission Second Lien License 103936. C.P.D. Reg. No.-19-07981

Brandy Nickoles

Brandy Nickoles has over 17 years of experience in the mortgage industry, dedicating the last 8 years solely to reverse mortgages. With great knowledge of the reverse mortgage product, she is committed to making sure our borrowers have a seamless experience.

Instrumental in creating infrastructure from file setup through loan funding, Brandy manages the loan pipeline. This includes everything from analyzing documentation and loan scenarios, to creating and implementing process/procedures, and coordinating with lenders.

Brandy also trains and oversees team members to ensure tasks are completed timely and efficiently. Having worked with Brandy for nearly a decade, Steven and Andrew can attest that her attention to detail and organization is top notch.

Covid-19

The Steven. J. Sless Group is fully operational and committed to expediting loans for our clients during these unprecedented times.

We have implemented the following measures to ensure the safety of our team members, strategic partners and valued customers:

  • Virtual meetings
  • Electronic applications and signatures
  • Contactless home appraisals
  • In-person meetings with social distancing and other necessary precautions

 

Call us at 410-814-7575 or schedule an appointment. (link )

Andrew S. Parker

Andrew Parker began his career in the mortgage industry in 1999 and transitioned to focusing solely on reverse mortgages in 2008. Through the years, Andrew has built a stellar reputation in scaling mortgage teams and overseeing products and systems training.

He has worked in tandem with Steven for the past 18 years and now oversees day-to-day production operations at the Steven J. Sless Group. In addition to managing loan originators and coordinators, providing product training and helping them to structure loan scenarios, Andrew works with credit desks to get clients approved.  He also navigates underwriting approvals.

Andrew is a big reason why The Steven J. Sless Group get clients approved for loans that other lenders don’t, and why the team closes loans much quicker than the industry average.  He has consistently forged strong bonds with and earned the trust of clients and strategic partners.

Robert Sklar

With 10+ years of mortgage industry experience, Robert Sklar educates clients about reverse mortgage loans and the strategy of incorporating housing wealth in retirement planning.

In doing so, he structures loan scenarios based on clients’ specific goals and needs. He also reworks loans to new terms and identifies additional conditions as needed to insure a viable credit decision. And he analyzes credit reports, property appraisals, titles and associated documentation.

Passionate about making a profound impact in the lives of his clients and others, the Hofstra University graduate has become a trusted resource of information and education in and around Baltimore.

ROBERT SKLAR: NMLS 1161107. Maryland Department of Labor, Licensing and Regulation Commissioner of Financial Regulation #5511.

Sharon Birdow

Bringing 30 years mortgage industry experience, Sharon Birdow is adored by her clients and colleagues alike.

The West Chester University graduate, wife and mother of four has served as branch partner and originating loan officer, branch manager and senior mortgage loan officer. She was named Loan Originator of the Year in Volume in 2016, 2017 and 2018.

At The Steven J. Sless Group of PRMI, Sharon helps clients 60+, their families and trusted advisors to obtain reverse mortgage loans. She regularly consults with financial professionals on the benefits an HECM provides and how to utilize this tool in individual retirement planning.

“It’s my privilege to educate and empower older Americans about the versatility of reverse mortgages,” Sharon says. “I love helping our clients achieve financial independence and peace of mind in their golden years.”

SHARON BIRDOW. NMLS#176375 // GA MLO # 47859. California – Licensed by the Department of Financial Protection and Innovation (DFPI) under the California Residential Mortgage Lending Act 4130403. A copy of our Privacy Policy and Notice is accessible by going to Primary Residential Mortgage’s website and clicking on the “Privacy Policy” link located at the bottom of the page. https://www.primeres.com/privacy-policy – District of Columbia-Department of Insurance, Securities and Banking Department MLB3094. Distrito de Columbia-Florida Office of Financial Regulation MLD646. Oficina de Regulación Financiera de Florida MLD646. Georgia Residential Mortgage Licensee. Georgia Department of Banking and Finance 6521. Indiana-Department of Financial Institutions Consumer Credit Division, First Lien License 11069 Secretary of State Securities Commission Second Lien License 103936. C.P.D. Reg. No.-19-07981 Indiana-Departamento de Instituciones Financieras, División de Crédito al Consumidor, Licencia de primer grado 11069, Secretaría de Estado, Comisión de Valores, Licencia de segundo grado 103936. C.P.D. Reg. No.-19-07981

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Justin Zornman

Fifteen-year customer relations and hospitality management veteran, Justin Zornman is the group’s first remote hire.

Based out of Kalamazoo, MI, he is responsible for helping clients to navigate the loan process. He also assists loan originators and aids the processing team to expedite loan closings.

A University of New Orleans graduate, Justin is currently completing his studies to pass the mortgage originators exam, get licensed and, one day, open a Michigan branch for the group.

“I am honored to ease the way for homeowners, 60+ to secure a better retirement,” Justin says. “I look forward to ultimately establishing The Steven J. Sless Group of PRMI as the market leader in Michigan.”

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