Page 62 - FOP JUNE Newsletter

REVERSE MORTGAGE CONTINUED FROM PAGE 59
any credit trouble – i.e. late payments – will have to be ex- plained. The lender will determine whether the explana- tion qualifies as an “extenuating circumstance” in getting the reverse mortgage approved. If the borrower has been delinquent on the payment of property taxes, the lender will need to set aside a certain amount of money to pay for property taxes and other expenses over the course of the loan. This set-aside will reduce the amount of loan pro- ceeds available to the borrower. A large shortfall requires a full set-aside that covers all property taxes and insurance over the borrower’s life. The lender will pay the expenses from the set-aside.
The above covers the details of these types of loans; be- low are some basic rules for taking out a reverse mortgage:
• Everyone listed on the deed of a home owned by someone seeking a reverse mortgage must be 62 years of age or older.
• If one spouse is 61 years of age or younger, that per- son’s name must be removed from the title. It may be possible for the underage spouse to continue living in the home after the older spouse passes away, provid- ed he or she meets certain conditions. It’s important to discuss these issues with the reverse mortgage loan officer.
• A reverse mortgage must be the only lien on a property.
62 CHICAGO LODGE 7 ■ JUNE 2016
This means, in order to obtain a reverse mortgage the borrower must pay off any existing traditional mort- gage. Borrowers can use reverse mortgage proceeds to pay off their traditional mortgage.
• Reverse mortgage holders are responsible for staying current on their real estate taxes and homeowner’s in- surance. If they go into arrears, they risk being forced into default.
• A reverse mortgage holder is responsible for mainte- nance of the home.
• The home must be the holder’s primary residence, which means he or she must live there more than 183 days per year.
We appreciate the opportunity to provide information on the basics of reverse mortgages, and look forward to hearing from you soon! d
John Aretos is the CEO of First Chicago Mortgage Ser- vices, a wholly owned subsidiary company of Chicago Pa- trolmen’s Federal Credit Union. He can be reached at 312- 499-8878.
QUESTIONS CONTINUED FROM PAGE 61
What steps can I take to avoid being railroaded by last-minute financing changes?
Financing is among the easiest places for dealers to make money, because it’s almost always the last stop in the car-buying process, and they expect you to be both committed to purchasing a car and exhausted from mak- ing a series of decisions. High-pressure salespeople use this fact to their advantage. When it comes time to talk financing, frequently, the license plates are off your old car, and you’re sitting down with a sales manager. While it may seem counter-intuitive, this is the best time to walk away and get a second opinion on financing. If you have not already sought pre-approval from them, see if a fi- nancial institution you trust can offer you a better rate, lower fees or a more flexible term. Ask them to commit as much as possible to a price on an offer sheet. Then, tell them you’d like to take some time to think about it. If you come back with a cashier’s check in hand, the sales manager may hem and haw a bit. But, at the end of the day, they’d rather make the sale than make a little extra on financing. d
Matt Wiseman is the Director of Marketing at ISPFCU – Your Law Enforcement Credit Union. Membership at ISP- FCU is open to all Illinois law enforcement employees and their families. Join ISPFCU today at www.ispfcu.org. Matt can be reached by email at mwiseman@ispfcu.org or by phone at 800-255-0886.