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Leigh Thomas Brown explains how reverse mortgages and home-equity lending work. You need to own your home as your primary residence, typically have at least 50% equity, and lenders won't advance all of it. The process is complex.
Leigh Thomas Brown explains how reverse mortgages and home-equity lending work. You need to own your home as your primary residence, typically have at least 50% equity, and lenders won't advance all of it. The process is complex.
Can you tell our audience a little bit about— obviously everybody's scenario can be different because loan qualifications are all over the place, but in general, how does it work? Somebody has a house, can it have an existing mortgage? Does it have to be paid off? Do they make application? How do they get the money? Give them a couple of the mechanics of it.
Absolutely. You need to own your property. It needs to be your primary home. You can't put it on a rental.
But thank you for clarifying that because people will try to take a loan on literally anything they own. So thank you for clarifying.
So that's the first start. Now you should probably have at least 50% equity in your property to be able to actually successfully use a reverse mortgage. I think the biggest aha moment that most clients come to me and say is, what do you mean I don't get 100% of my equity? And there's no lender out there that I know that's going to give you 100% of your equity. Reverse mortgages are right up there in that category. You get a portion of it. It is a complicated system. I can't pull out my trusty HP-12, which we all have in this business, and say, that's the down payment, that's the mortgage, here we are. No, that's not how it works.
