Monday, July 21, 2014

Title Topics: Title Insurance and Reverse Mortgages

What is a reverse mortgage?

The easiest way to understand the reverse mortgage is to immediately eliminate the concept that it is different than a traditional mortgage.
There are a few differences yes, but the same concepts remain true.
The homeowner is getting a loan, but they are only getting a loan on the equity available in the home. If there is equity in the home, the borrower will receive cash payouts. The borrower can pay down that loan if they choose, unlike a traditional mortgage where it’s a requirement. The homeowner must be over 62 years of age and must reside on the property as their primary residence to obtain a reverse mortgage.

Do I need title insurance for a reverse mortgage?

The Title Policy process is the same as with any traditional mortgage. The Owner’s Policy is valid during the entire time that the homeowner owns their property. However, the reverse mortgage lender will require a new Title Mortgage Policy during the loan transaction.

Any Questions or Comments?  Let us know!

1 comment:

  1. Would like to know if the reverse mortgage would be taken by the real estate developer or the individual owner has to involve himself in doing it.