Nevada Reverse Mortgage Guide
Are you contemplating retirement in Nevada and exploring ways to supplement your retirement income? A reverse mortgage is one solution to consider.
Reverse mortgages in Nevada offer senior homeowners a financial tool that can help increase cash flow by capitalizing on their home’s equity. You can even use a reverse mortgage to buy a new home if you plan to move to the Silver State for retirement.
What distinguishes reverse mortgages from regular mortgages is that they remove the necessity for monthly mortgage payments. Instead, repayment is made when the homeowner sells the property, leaves, or passes away.
For Nevada homeowners looking to supplement their income or manage unexpected retirement costs, reverse mortgages can be invaluable.
This guide covers everything you need to know about obtaining a reverse mortgage in Nevada to determine if it’s the right fit for your financial situation, needs, and objectives.
Understanding Reverse Mortgages
A home equity conversion mortgage (HECM), also referred to as a reverse mortgage loan, is a financial tool that allows homeowners aged 62 or older to unlock the equity in their home without the obligation of monthly mortgage payments.
One advantage of a reverse mortgage is the flexibility that it comes with. This federally insured loan will start by paying off the current mortgage if there still is one.
For the remaining funds, reverse mortgage borrowers then choose how to receive their funds. They have the choice of a lump sum, monthly installments, a line of credit, or a combination of these options. The variety of choices makes a reverse mortgage able to meet a variety of needs.
Unlike regular mortgages, a traditional home equity loan, or a home equity line of credit (HELOC), a reverse mortgage does not require monthly mortgage payments, which is another way a reverse mortgage can help free up cash.
Reverse mortgage borrowers are still required to pay property taxes, homeowners’ insurance, and maintain the home.
The reverse mortgage is usually repaid when the home is sold, it no longer serves as the primary residence of the homeowner, or when the homeowner passes away.
Nevada Reverse Mortgage Requirements
To qualify for a reverse mortgage loan in Nevada, homeowners must meet the following requirements:
- Age Requirement. At least one homeowner must be at least 62 years old.
- Primary Residence. The home must be the primary residence of the homeowners.
- Equity. Homeowners need to have equity in the home.
- Condition of the Home. The home must be in good condition.
- Financial Obligations. Homeowners must be current on property taxes, homeowner’s insurance, and HOA fees (if applicable), and maintain the home.
- Eligible Property Types. The property must be eligible for a reverse mortgage, which includes single-family homes, two-to-four-unit properties where homeowners occupy one unit, FHA-approved condominiums, or approved manufactured homes.
- Counseling Session. Prospective borrowers must complete a counseling session with a third-party counseling service approved by HUD.
Types of Reverse Mortgages Available in Nevada
In Nevada, eligible homeowners have access to four types of reverse mortgages:
Home Equity Conversion Mortgage (HECM)
This is the most common type of reverse mortgage offered by lenders in Nevada. These loans are backed by the Federal Housing Administration (FHA) and regulated by the U.S. Department of Housing and Urban Development (HUD). To be eligible, borrowers must be 62 years of age or older. There are no restrictions on how the funds from these reverse mortgages can be used, but there is a lending limit set by the FHA. As of 2024, the FHA lending limit is $1,149,825.
Jumbo Reverse Mortgage
These allow homeowners to borrow more than the FHA lending limit. These proprietary reverse mortgages are offered by individual lenders and are not backed by the FHA. While jumbo reverse mortgages often come with higher interest rates, they do not require mortgage insurance premiums.
Reverse Mortgage for Purchase
This program is a unique financial tool that enables homeowners in Nevada to finance part of their new home with a reverse mortgage. This option allows older homeowners to upsize or downsize in retirement without taking on monthly mortgage payments. It involves combining the reverse mortgage with a substantial down payment from the sale of a previous home. This may also be a great option for those looking to relocate to Nevada for retirement.
Single-Purpose Reverse Mortgage
This less common option is also known as property tax deferral programs and deferred payment loans. Like other reverse mortgages, they are available to homeowners who are at least 62 years old. However, these reverse mortgages can only be used for a specific purpose approved by the lender, which is typically a home improvement project.
Nevada Reverse Mortgage Borrower Rights
Nevada residents have the same protections the FHA and HUD offer to reverse mortgage borrowers. These include the right to live in the following:
- Remain in the home. Reverse mortgage borrowers have the right to remain in the home as long as they meet the loan obligations, including maintaining the home, paying the property taxes, paying the homeowners insurance, and living in the home most of the year.
- No prepayment penalties. Reverse mortgage borrowers do not have to wait until they sell the home to start paying it back. They can start paying back the loan anytime without facing prepayment penalties.
- Counseling. All reverse mortgage borrowers must complete a counseling session with a HUD-approved third-party counselor. While this is a requirement, it’s also a protection because the purpose is to ensure that you fully understand what a reverse mortgage is and how it works to make an informed decision.
- Non-recourse loans. One of the biggest protections for reverse mortgage borrowers is that they are non-recourse loans. This means that if your loan balance exceeds the value of your home, you or your heirs will not be responsible for paying back the difference.
Nevada Reverse Mortgage Calculator
If you’re thinking about getting a reverse mortgage loan and want to know how much you might be able to qualify for, take a look at our reverse mortgage calculator.
This tool can give you an estimate of how much you may be able to borrow based on your age, the value of your home, and any existing mortgages or liens on your property.
Nevada Reverse Mortgage Application Process
Obtaining a reverse mortgage in Nevada involves a detailed process that can sometimes take up to 45 days.
Here is a simplified breakdown of the reverse mortgage application process should you decide to proceed with Mutual of Omaha Mortgage in Nevada:
Step 1: Free Consultation
The reverse mortgage journey starts with a consultation with one of our knowledgeable reverse mortgage loan advisors, who will analyze your individual circumstances, offer a loan estimate, and address any questions or concerns. Our committed loan specialists will be your guide throughout the entire process.
Step 2: Counseling Session
After your consultation, the federal government requires that you attend a counseling session conducted by a HUD-approved third-party counselor. The objective is to educate you about reverse mortgages, their features, appropriateness for your situation, and to discuss alternatives. You’ll receive a certificate upon completion, which must be submitted to your advisor to formally start the reverse mortgage application.
Step 3: Application Submission
With the counseling certificate in hand, your reverse mortgage loan advisor will help you submit the application along with the necessary documentation. This will include information such as a photo ID, your homeowner’s insurance policy, and your most recent property tax bill. Collecting these documents at this stage will help expedite the loan process.
Step 4: Appraisal and Other Documentation
Once your application is submitted, Mutual of Omaha Mortgage will commission a home appraisal to ascertain your property’s condition and market value, which helps determine the eligible loan amount. Moreover, we will also procure a title and credit report to check for any liens and evaluate your financial stability. This step generally takes one to two weeks.
Step 5: Processing and Underwriting
After submitting your application and documentation, our team kickstarts the manual underwriting process. The underwriter checks if all reverse mortgage prerequisites are fulfilled and decides on loan approval. Sometimes, they may seek additional documentation or home repairs before finalizing the loan. Your reverse mortgage loan advisor will keep you updated throughout the entire process.
Step 6: Closing
Once your application is approved, the title company will schedule the closing date. You can sign the closing documents either at home with a mobile notary service or in person at the title company.
Step 7: Funds Disbursement
There is a mandatory three-business-day waiting period following the signing of the closing documents before the funds are disbursed, based on the method(s) chosen during the application process. The options for disbursement include the following:
- Lump Sum. A one-time payment of the full loan amount.
- Tenure Monthly Installments. These are monthly payments made to the borrower as long as they reside in the home.
- Term Monthly Installments. Fixed monthly payments for a specified number of years.
- Line of Credit. Borrowers can draw on funds from a line of credit whenever needed, with the unused portion growing over time.
Find a Nevada Reverse Mortgage Loan Officer in Your Area
Mutual of Omaha Mortgage is a licensed Reverse Mortgage lender in the state of Nevada. You can get started by calling 800-578-0283 or filling out this form here.
You can also find a Nevada Reverse Mortgage loan officer in your area through our loan officer directory or by clicking on one of the links below to find a loan officer near you:
- Las Vegas Reverse Mortgage Lender Near Me
- Henderson Reverse Mortgage Lender Near Me
- North Las Vegas Reverse Mortgage Lender Near Me
- Reno Reverse Mortgage Lender Near Me
- Enterprise Reverse Mortgage Lender Near Me
- Spring Valley Reverse Mortgage Lender Near Me
- Sunrise Manor Reverse Mortgage Lender Near Me
- Paradise Reverse Mortgage Lender Near Me
- Sparks Reverse Mortgage Lender Near Me
- Carson City Reverse Mortgage Lender Near Me
Reverse mortgage borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.
This information is intended to be general and educational in nature and should not be construed as financial advice. Consult your financial advisor before implementing financial strategies for your retirement.