Thursday, 09 September 2010
Reverse Mortgages Part 8: The Closing
On Tuesday, at a title company selected by my loan broker, I signed all the papers at the closing of my FHA-insured reverse mortgage, a HECM or Home Equity Conversion Mortgage, a program administered by the federal Department of Housing and Urban Development (HUD).
HUD requires that there be a three-day grace period after signing during which the applicant can back out of the mortgage. Because I signed on Tuesday, my period extends until next Monday, but I am happy with the results and will allow it to go through.
If you decide, during the grace period, to cancel the reverse mortgage, you can be required to pay the appraiser's fee, which is normally rolled into the mortgage, although it is often waived in that circumstance. And if you have been charged a fee for the mandatory counseling, you will need to pay that.
If you have ever bought a home or two or three, you know the closing drill – a big stack of paper to sign. Because I had been given copies before the closing and had read them all, it was a breeze – almost like a social visit with the terrific escrow officer. And new to me this time, instead of coming home with a ream of paper to file, I have it all on a disc.
(By the way, it is a good idea to read all the papers, including the boring-looking boilerplate before the closing. Then, if you have questions or concerns, you broker can answer them before the closing and it will save a lot of time.)
There are many reasons to take out a reverse mortgage. Some do it to pay off forward mortgages and eliminate monthly payments. Others do it to pay off other bills or cover expensive medical costs. For me, it is to provide peace of mind.
Like many readers of Time Goes By, I lost a gut-wrenching amount of savings in the 2008 market crash. That was not daily-living money; it was emergency money for whatever disaster might befall me or to pay for a reasonably good nursing home should I need one.
Although a HECM won't pay for a permanent nursing home (you must be living in your home for the reverse mortgage to continue), it frees up what remains of my savings for that and I now have a reasonable-sized cushion for anything else that might surprise me in the coming years.
I want to publicly thank several people who got me through the stages of educating myself and then obtaining the HECM - all highly professional, patient and good humored.
Jerry Gilmour of Director's Mortgage who is my loan broker. He's smart, knowledgeable and he guided me through every step along the way. Nice guy too who put up with me when the bank drove me nuts demanding a paper trail of what I consider unnecessarily intrusive questions.
Barbara Stucki, vice president of Home Equity Initiatives at the National Council on Aging who answered a lot of basic questions and recommended my NCOA HECM counselor.
Buz Zeman, director of Housing Options Provided for the Elderly (HOPE) in St.. Louis, who was my excellent advisor for the mandatory counseling session. He explained all the requirements, financial details and a whole lot of other considerations with knowledge and clarity.
Chris Crenshaw, senior escrow officer at Pacific Northwest Title of Oregon who was thoroughly prepared for the closing and like the three above, made what one might expect to be a long, tedious paper shuffle, an interesting, informative and fun – yes, fun – exercise.
This is the final installment of the TGB reverse mortgage series and I will leave you with a list of links to the best online resources for information about reverse mortgages.
• NCOA Guide to Reverse Mortgagea (pdf)
• Reverse Mortgages: Are They For You? (pdf)
From the U.S. Department of the Treasury
• Saul Friedman's Gray Matters: Reverse Mortgage Column
• Saul Friedman's Gray Matters: Safest Reverse Mortgage column
Aside from details related to your personal circumstances that can be gotten only from a mortgage broker and the mandatory counseling, these links will give you a thorough grounding if you are considering a reverse mortgage.
Links to all eight stories in this series have posted under the TGB Features heading in the right sidebar where they will remain indefinitely.
At The Elder Storytelling Place today, Mary B Summerlin: Polly's Present