A Brief Guide to Reverse Home Loans
Senior citizens have become steadily interested in the reverse mortgage business because it gives many of them living on little or no income, the opportunity to get cash out of their home equity, for as long as they’d like, no payments and no credit check. But how and where do you find reputable lenders for borrowers in Massachusetts?
The type of lender a borrower chooses has a bit to do with what type of financial need is pending. Both government and private lenders offer reverse mortgages.
FHA and HUD Loan Limits
Even though the U.S. Department of Housing and Urban Development administers the government backed Home Equity Conversion Mortgage, the agency is not a lender. HUD does approve lenders based on their experience and reputation in the mortgage industry.
FHA mortgage limits are key qualifiers for the HECM. This reverse mortgage is limited to local FHA limits: your home may be worth well over the limit, but you will only be approved for the limit and no more. For homeowners with high value homes the local FHA limit may really reduce what a homeowner may receive.
Massachusetts FHA limits by county vary widely, from a couple that are near the national average to those significantly higher and those yet still that really soar.
If you are considering a HECM make sure any lender you use is included on the HUD-approved lender list.
State Government Single Purpose Reverse Mortgages
Single purpose reverse mortgages are low-cost alternatives usually offered through state or local governments. Common uses are payment of property taxes or finance necessary home renovations or repairs. Loans like these function in a few very similar ways to a traditional reverse mortgage: loan against home value, does not come due until the home is sold or the borrower dies. Those specifically designed for seniors typically require borrowers to be at least 65.
- The State of Massachusetts Board of Assessors offers a statewide Senior Citizen Property Tax Deferral. This program is essentially a lien on a borrower’s home and based on the home’s value. Seniors must be 65 or over, have a limited income and remain in the home.
- The state’s Home Modification Loan Program is not limited to seniors, but to any homeowner with a disability, including seniors. Loans provide cash up to $25,000 and are not due until the resident dies or moves permanent address.
Reverse Mortgage Providers in Massachusetts
This list represents only a few of the types of lenders available.
Benjamin Franklin Bank
The Benjamin Franklin Bank is a HUD-approved lender and a regional favorite. This is a full-service retailer and financial institution. Borrowers interested in a reverse mortgage with BFB will find a few products designed to fit the client’s financial goals, all dependent upon a comprehensive initial consultation.
East Boston Savings Bank
Another regional favorite with a laundry list of products and services, including reverse mortgages. EBSB provides quite a bit of information specific to reverse mortgages all in an effort to debunk the confusing business. Borrowers may also use online mortgage calculators to figure estimated costs and rates.
Radius Financial Group
This Massachusetts-based company is designed to offer residential as well as corporate investing. Borrowers are fitted to a reverse mortgage that is best suited to their financial goals, both short-term and long-term.