Houston's Top Reverse Mortgage Lender
An Option for Those 62 Years and Over
The Ultimate Houston Reverse Mortgage Guide
Reverse mortgages come in three primary types, each with its own characteristics and considerations:
Single-Purpose Reverse Mortgage: State and local government agencies often provide single-purpose reverse mortgages. These loans come with specific limitations on how you can use the borrowed funds. Generally, they are intended for essential expenses such as home repairs or property tax payments. While these loans can be a lifeline for seniors facing financial constraints, they do not allow for expenditures on travel, entertainment, or personal items.
HECM Reverse Mortgage (Home Equity Conversion Mortgage): HECM reverse mortgages are the most prevalent type and are exclusively available through Federal Housing Administration (FHA) approved lenders. Initiated in 1988, these mortgages were designed to assist seniors in meeting their financial obligations.
HECM loans offer flexibility in how you can access your funds. You can opt for fixed monthly disbursements, establish a line of credit, or combine both methods. Additionally, HECMs can be used to purchase a primary residence, provided you can cover the difference between the HECM proceeds and the property's purchase price, along with closing costs.
It's worth noting that HECMs often entail high origination fees, mortgage insurance premiums, and maintenance expenses, which should be considered when evaluating this option.
Proprietary Reverse Mortgage: These loans typically provide the opportunity for a higher loan amount than what's available through federal programs. However, they come with potentially steep interest rates.
In some cases, proprietary reverse mortgages may allow you to borrow more than the equity in your home or exceed the federal limits. While this can seem advantageous, it carries a greater risk of accumulating substantial debt that may prove challenging to escape.
Before committing to any reverse mortgage, it's essential to carefully assess your financial needs, consider your long-term goals, and consult with a qualified financial advisor or counselor. This will help ensure that you make an informed decision that aligns with your unique circumstances and priorities.
Reverse Mortgages in Houston
Get Paid and Own Your Home
If you are aged 62 or older and need extra cash, a Reverse Mortgage or Home Equity Conversion Mortgage (HECM) can be a great option. At Flagstone Mortgage, we offer HECM products that allow you to convert a portion of your home equity into cash payments and/or a line of credit.
Our HECM products provide many benefits for seniors, including the continued ownership of their home without having to make a monthly mortgage payment*. Our Houston Reverse Mortgage options allow you to use the proceeds in any way you choose, from purchasing a new home to supplementing retirement income, paying medical bills, traveling, or moving closer to family members.
Our team of experienced reverse mortgage specialists can help you navigate the process, answer your questions, and guide you through every step. We understand that a reverse mortgage can be a complex decision, but we will provide you with all the information you need to make an informed decision.
Contact us today to learn more about our Houston Reverse Mortgage options and how they can benefit you. We'll provide you with a free, no-obligation consultation and help you determine if a reverse mortgage is right for you.
What Are The Benefits of a Reverse Mortgage?
Here are some benefits of a reverse mortgage:
Provides additional income: A reverse mortgage can provide seniors with additional income during their retirement years, which can help them maintain their lifestyle or cover unexpected expenses.
No monthly mortgage payments: With a reverse mortgage, borrowers do not have to make monthly mortgage payments. Instead, the loan is paid back when the borrower sells the home or passes away.
Continued home ownership: Reverse mortgage borrowers are able to continue living in their homes and retaining ownership, as long as they comply with the loan terms.
Flexible payment options: Borrowers can choose to receive their funds as a lump sum payment, a line of credit, or monthly payments.
Tax-free: The funds received from a reverse mortgage are typically not considered taxable income, which means borrowers can use the funds without worrying about a tax burden.
Government-insured: Most reverse mortgages are insured by the Federal Housing Administration (FHA), which provides an extra layer of protection for borrowers.
What Are the Requirements for a Houston, TX, Reverse Mortgage?
Conforming Home Mortgage
Our Conforming Home Mortgage option is designed to fit the needs of those looking for a mortgage that conforms to the guidelines set by Fannie Mae and Freddie Mac.
Jumbo Home Mortgage
A jumbo loan is a mortgage for high-value properties that exceed the conforming loan limits set by government-sponsored enterprises, with stricter qualification requirements and higher interest rates due to the larger loan amount.
If you're 62 years or older and live in your home as your primary residence, you may qualify for a reverse mortgage. However, you must also meet several other requirements, such as:
Complete a HUD-approved counseling session: Before you can apply for a reverse mortgage, you must attend a counseling session with a HUD-approved counselor. The counselor will explain how the reverse mortgage works, its costs, and its benefits.
Must be able to pay homeowners taxes, insurance, and any applicable HOA fees: You'll still be responsible for paying property taxes, homeowners insurance, and any applicable homeowners association fees.
Must live in home as primary residence: Vacation homes and investment properties do not qualify for a reverse mortgage. You must live in the home you're seeking a reverse mortgage on as your primary residence.
Non-QM Mortgage
This type of loan may be suitable for those who can demonstrate their creditworthiness through bank statements or Debt Service Coverage Ratio (DSCR).
FAQ's About Reverse Mortgages in Houston, TX
How does a reverse mortgage work?
A reverse mortgage works by allowing homeowners age 62 or older to convert a portion of their home equity into tax-free cash without selling their home or making monthly mortgage payments, with the loan balance (plus accrued interest) repaid only when the borrower moves out, sells the property, or passes away.
Is a reverse mortgage a good idea?
Whether a reverse mortgage is a good idea depends on your specific financial situation, age, health, long-term plans, and goals, it can be an excellent solution for seniors who want to age in place with more financial flexibility, have significant home equity but limited retirement income or savings, and plan to stay in their home for at least 5-7 years. Still, it may not be ideal if you plan to move soon, want to leave the full value of your home to heirs, or have alternative ways to access funds at a lower cost. A reverse mortgage is a good idea when you need to supplement retirement income without taking on monthly payments (perfect for seniors living on fixed Social Security or pension income), want to delay claiming Social Security to maximize benefits while using reverse mortgage proceeds as a bridge, need funds for healthcare expenses or home modifications to age in place safely, or want to eliminate an existing mortgage payment to improve monthly cash flow.
How do reverse mortgages work in Houston, TX?
Reverse mortgages in Texas operate similarly to those in other states, following federal HECM (Home Equity Conversion Mortgage) guidelines. This allows homeowners aged 62 and above to convert their home equity into cash without making monthly payments. Still, Texas has specific protections, including a 12-day right of rescission (longer than the federal 3-day requirement), strong homestead protections that shield your home from most creditors even with a reverse mortgage, and property tax advantages where seniors 65+ can defer property taxes if needed, complementing the reverse mortgage as a retirement strategy.
What disqualifies you from getting a reverse mortgage?
What disqualifies you from getting a reverse mortgage includes being under age 62, not occupying the property as your primary residence, having insufficient home equity (generally need at least 50% equity), being delinquent on federal debt like taxes or student loans, failing to pay property taxes or homeowners insurance, letting the property fall into disrepair, having an existing mortgage balance that exceeds your reverse mortgage eligibility (meaning you'd need cash to pay down the difference), or having a home that doesn't meet FHA property standards for safety and soundness.
What's the difference between a reverse mortgage and a HELOC?
The difference between a reverse mortgage and a HELOC (Home Equity Line of Credit) comes down to payments, age requirements, and how you access funds. A reverse mortgage requires no monthly payments, is only available to homeowners aged 62 and above, and allows you to access equity without income qualification. In contrast, a HELOC requires monthly payments, is available at any age, and requires sufficient income and credit to qualify for the line of credit.