It doesn't really go with the territory but quite a few seniors get in touch with me and ask if they can pay the mortgage company monthly.
There is no doubt they intend to make payments. Whether they will is a different story.
The reason for my skepticism is people want reverse mortgages for a very specific reason. They need the money because there isn't enough. That being the case why would that change for them to have enough later to make extra payments?
Regardless, a goodly portion of my potential customers ask if the reverse mortgage company will ding them if they make payments on the loan.
The truth be known reverse mortgage lenders, and more particularly FHA, have no qualms with borrowers making payments of any kind prior to the end of the mortgage.
You may be asking why someone would want to make payments. Well, people have reasons from hating debt of any sort to using the mortgage as a tax shelter. This latter reason is one of the biggies.
What is different about the reverse mortgage in comparison to the forward mortgage is you don't make periodic interest payments, so most reverse mortgage customers don't get that particular write-off until the very end of the mortgage.
In order to get the write-off the borrower must make payments. It's at least a good reason to ask about repercussions.
Of course, when prepaying the mortgage one must consider the tax laws. They always cramp the average person's style and this is no different. Since most people finance closing costs in a reverse mortgage these costs must be paid prior to getting any interest write-off.
Just keep in mind the order in which early payments are applied.
One big expense when paying closing costs is the origination fee. That can easily be up to two percent of your appraised value when you first obtained your loan.
The origination fee is a big write-off. Make sure you run this stuff by your CPA. They are more abreast than I and things change. - 15224
There is no doubt they intend to make payments. Whether they will is a different story.
The reason for my skepticism is people want reverse mortgages for a very specific reason. They need the money because there isn't enough. That being the case why would that change for them to have enough later to make extra payments?
Regardless, a goodly portion of my potential customers ask if the reverse mortgage company will ding them if they make payments on the loan.
The truth be known reverse mortgage lenders, and more particularly FHA, have no qualms with borrowers making payments of any kind prior to the end of the mortgage.
You may be asking why someone would want to make payments. Well, people have reasons from hating debt of any sort to using the mortgage as a tax shelter. This latter reason is one of the biggies.
What is different about the reverse mortgage in comparison to the forward mortgage is you don't make periodic interest payments, so most reverse mortgage customers don't get that particular write-off until the very end of the mortgage.
In order to get the write-off the borrower must make payments. It's at least a good reason to ask about repercussions.
Of course, when prepaying the mortgage one must consider the tax laws. They always cramp the average person's style and this is no different. Since most people finance closing costs in a reverse mortgage these costs must be paid prior to getting any interest write-off.
Just keep in mind the order in which early payments are applied.
One big expense when paying closing costs is the origination fee. That can easily be up to two percent of your appraised value when you first obtained your loan.
The origination fee is a big write-off. Make sure you run this stuff by your CPA. They are more abreast than I and things change. - 15224
