Securing a Wyoming Reverse Mortgage

The Wyoming reverse mortgage is one of the best financial options available to seniors who own homes in the state and wish to cash out their home equity. Reverse mortgages are designed to accomplish this. If youre at least 62 years of age and you own a home with equity, you meet the basic qualifications to take out one of these specialized loans.

What is a reverse mortgage?

When you take out one of these loans, your lender literally buys your home equity from you and pays you for it. Youre giving up the investment value of your home but gaining the money you need to live on.

How can reverse mortgage funds be used?

The funds you receive can be put toward any expenses that arise. Many seniors who take out reverse mortgages use the money to pay for living expenses. Dont feel constrained to this, though. You can use the money however you like. Take a vacation, pay for medical bills, or buy a gift for your family. Anything is acceptable, since the money is all yours.

What types of reverse mortgages exist?

Reverse mortgages have three forms:

• Goverment-insured: FHA HECM (Home Equity Conversion Mortgage).
• Single-purpose: backed by nonprofits or state or local government agencies.
• Proprietary: backed by private entities.

The most common source is the FHA HECM reverse mortgage, which is insured by the Department of Housing and Urban Development (HUD). This article will focus on HECM reverse mortgages.

Who can get a reverse mortgage?

Homeowners aged 62 and older who own their home outright and have most of their mortgage paid off. If the current mortgage is not paid off, the initial reverse funds or some combination with out-of-pocket cash must be used to deplete the remaining balance. Credit score is not a qualifying factor.

What costs are associated with a reverse mortgage?

There are several costs associated with securing an HECM reverse mortgage in Wyoming, including but not limited to:

• Upfront fees: include the lender's fees, and can be paid from the reverse mortgage funds. This means, however, that the money taken cannot be borrowed back. So a $200,000 reverse mortgage with $16,000 in fees paid via the reverse mortgage funds will leave the homeowner with $184,000.
• Closing fees: include all the same fees required of a traditional mortgage closing.
• Reverse mortgage counseling fees: HUD mandates all reverse mortgage homeowners attend reverse mortgage counseling. Fees are in the $100 range but can be waived for lower income seniors.
• Mortgage insurance: an upfront mortgage insurance premium (MIP) must be paid for reverse mortgage borrowers. It can be as low as 0.5% and as high as 2.5% of the appraised home value, unless the home is over $625,500, in which case the upfront mortgage insurance is calculated by the lender.

How will I receive my funds, and for how long?

You can choose the way you want your lender to provide your reverse mortgage money to you. There are several payout options available.

• Lump sum payment.
• Monthly payments.
• Credit line.
• Any combination of the above.

When you start a reverse mortgage, your lender takes over the ownership of your home equity. This can sound concerning to some seniors. Dont be alarmed. Your lender doesnt take ownership of the home itself. The home remains yours until you decide to do something else with it. Your lender will never own it.

Does the equity need to be repaid?

The equity does not need to be repaid unless you sell the home or choose to live in the home until you pass away. In the latter case, your home will transfer to your established heir. This heir will have to pay back the reverse mortgage loan, but again, this is no cause for concern. Your heir can simply sell the home to pay back the loan. The government ensures that lenders cant collect more than what the home sells for. If the home loses value and doesnt sell for the full amount of debt, the lender must suffer the loss, not your family.

Wyoming Reverse Mortgage Lenders

Most mortgage lenders prefer to administer reverse mortgages when they can. With these loans, both borrowers and lenders benefit. But the way lenders benefit is through the fees they charge to originate these loans. You must be careful. Some lenders charge very high fees.

Compare as many lenders in your part of Wyoming as you can to find out what rates are being offered in the marketplace. Once youve found the lowest priced loan available, work with the lender to close your loan. To learn more about the steps involved in this, read ourreverse mortgage checklist.

Wyoming Senior Resources

The Wyoming Department of Health provides aging and disability resources on their website, including contact for centers which facilitate aid for seniors who wish to maintain their independence while living at home. To learn more, visit the official page.

Lenders in: Wyoming.