Oregon Reverse Mortgage Guide
If you’re an Oregon homeowner aged 62 or older, a reverse mortgage might be the solution you’ve been seeking to improve your financial health in retirement.
A reverse mortgage is a financial tool that allows older homeowners a way to access their home equity while remaining in their homes. And with a reverse mortgage loan, this is done without adding monthly mortgage payments to your budget.
At Mutual of Omaha Mortgage, we’re dedicated to helping homeowners in Oregon and across the nation understand how reverse mortgages work and how they can help supplement retirement income.
This guide will provide an overview of reverse mortgages in Oregon, including what they are, the requirements, how to use them, and where to find a loan officer through Mutual of Omaha Mortgage.
Key Takeaways
- Reverse mortgages in Oregon are available to senior homeowners aged 62+ who are looking to access equity from their primary residence.
- Homeowners can opt for a lump sum payment, monthly installments, and/or a line of credit to access their funds.
- Mutual of Omaha Mortgage offers free consultations with seasoned reverse mortgage loan officers. Use the links below to find one in your area.
Understanding Oregon Reverse Mortgages
A Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage loan, is a distinctive financial product designed for homeowners aged 62 or older. It provides a unique opportunity to unlock equity in your home without the burden of monthly mortgage payments.
If there’s an existing mortgage on the home, the reverse mortgage will pay it off. The remaining equity of the reverse mortgage proceeds can then be accessed by the borrowers in a variety of formats.
The reverse mortgage program’s flexibility is one of its key benefits. You can choose how to receive your funds — through a lump sum payment, monthly installments, a line of credit, or a mixture of these options. This way, you can customize the reverse mortgage to meet your specific financial needs.
Unlike traditional mortgages, home equity loans, or a home equity line of credit (HELOC), a reverse mortgage doesn’t require monthly repayments. This feature can help increase cash flow, which is a common concern for retirees.
There are no restrictions on how reverse mortgage borrowers use the funds they receive.
The repayment of the reverse mortgage happens when the property is sold, ceases to be your principal residence, or upon the borrower’s passing.
Reverse mortgages are insured by the Federal Housing Administration (FHA) and regulated by the U.S. Department of Housing and Urban Development (HUD).
Eligibility Criteria for Oregon Reverse Mortgages
To qualify for a reverse mortgage in Oregon, homeowners must meet certain criteria. The following are the key reverse mortgage requirements:
- Homeowner(s) must be 62 years of age or older. If there is more than one owner, at least one homeowner should meet this age requirement.
- The property must be the homeowner’s primary residence. This rule excludes secondary homes, investment properties, and vacation homes.
- The home needs to have equity built up. This plays a role in determining the maximum loan amount that can be accessed through the reverse mortgage.
- The home needs to be in good, maintained condition. If the property does not meet the lender’s standards, improvements or repairs may be required.
- Homeowners are obliged to continue to meet certain property-related responsibilities. These include timely payment of property taxes, maintaining adequate homeowners’ insurance, keeping the home in good condition, and paying any other relevant fees, such as HOA fees.
- The property must be an eligible property type. Eligible property types for reverse mortgages include single-family homes, two-to-four-unit properties (provided the homeowner occupies one of the units), FHA-approved condominiums, and manufactured homes that comply with specific FHA guidelines.
- Attend a counseling session. Before applying for a reverse mortgage, homeowners are required to attend a counseling session with a HUD-approved counselor. This session is designed to ensure that borrowers fully understand the terms, benefits, and potential risks associated with a reverse mortgage.
Benefits of Reverse Mortgages
Reverse mortgages come with several benefits and advantages, including the following:
Boosting Retirement Funds
A reverse mortgage’s key benefit is its potential to bolster your retirement income. This is particularly important if you find that your Social Security and retirement accounts aren’t enough. By unlocking equity in your home, you can secure funds to manage monthly bills, medical expenses, travel, or any other financial needs you might encounter during your retirement years.
Absence of Monthly Mortgage Payments
A unique feature of a reverse mortgage is that it doesn’t require a monthly mortgage payment for repayment. The repayment is postponed until you decide to sell the home or stop using the home as your principal residence. While there are no monthly mortgage payments, borrowers are still required to pay property taxes, homeowners’ insurance, and home maintenance costs.
Versatile Fund Accessibility
Reverse mortgage recipients have a range of choices for how they access their funds. You can opt for a one-time lump sum payment, steady monthly installments, establish a line of credit for as-needed withdrawals, or combine these options to align with your financial objectives.
Retention of Home Ownership
A reverse mortgage allows you to stay in your home as long as it continues to be your principal residence. This can be especially attractive for individuals wishing to age in place.
Tax-Free Loan Proceeds
The proceeds from a reverse mortgage are not subjected to federal income tax as they’re considered a loan, not income. However, we strongly suggest consulting with a tax advisor to understand your situation’s specific tax implications.
Oregon Reverse Mortgage Types
There are several Oregon reverse mortgages available to homeowners. These include Home Equity Conversion Mortgages (HECM), Single-Purpose Reverse Mortgages, and Jumbo Reverse Mortgage Loans, all specifically tailored to suit your individual needs.
HECM Reverse Mortgage Loans
The Home Equity Conversion Mortgage (HECM), commonly known as a HECM reverse mortgage, is the predominant type of reverse mortgage available from most lenders, including Mutual of Omaha Mortgage. HECM reverse mortgages are unique due to their robust backing from the federal government and are specifically designed for borrowers aged 62 and above, addressing the unique financial needs of retirees. One of the key features of HECM loans is their flexibility, allowing borrowers to use the loan proceeds for a variety of purposes, from supplementing retirement income to home renovations. However, the FHA sets a lending limit for HECM reverse mortgages, which is $1,149,825as of 2024.
Jumbo Reverse Mortgages
For homeowners whose properties are valued above the FHA lending limit, most major lenders offer jumbo reverse mortgage loans. These are proprietary reverse mortgages, each typically given a unique name by the lender. For instance, Mutual of Omaha Mortgage offers the HomeSafe Reverse Mortgage as our jumbo loan, allowing homeowners to borrow up to $4 million.
Reverse Mortgage for Purchase
The Home Equity Conversion Mortgage for Purchase (H4P) is a specific type of reverse mortgage that enables homeowners to purchase a new home using the equity from their existing property. This option is particularly beneficial for retirees looking to downsize or relocate to be closer to family members. Mutual of Omaha Mortgage offers H4P loans, providing retirees with a flexible and affordable way to purchase their dream home.
Single-Purpose Reverse Mortgages
While not as common, single-purpose reverse mortgages provide a tailored solution for homeowners who are 62 years or older. Also recognized as property tax deferral programs or deferred payment loans, these niche financial instruments serve a particular objective sanctioned by the lender. Generally, they are used to fund home improvement projects.
Protections for Reverse Mortgage Borrowers in Oregon
Oregon has specific laws in place to protect borrowers who choose a reverse mortgage. These include:
- Right to Rescission. Reverse mortgage borrowers may cancel the loan without penalty at any time during the application process, including within three business days after signing the loan documents.
- Non-Recourse Loan Protections. Reverse mortgages are categorized as non-recourse loans. This means that neither you nor your heirs will ever owe more than the home’s current value when settling the loan.
- HUD Required Counseling. All prospective reverse mortgage applicants must attend a counseling session led by an independent counselor authorized by HUD. The counseling session aims to educate potential reverse mortgage borrowers about HECM loans, go over possible alternatives, and ensure that the borrower’s decision is autonomous and not influenced by those who might financially benefit from the loan.
How to Apply for a Reverse Mortgage in Oregon
Step 1: Consultation with a Reverse Mortgage Loan Officer
Kickstart the process by scheduling a no-cost, no-obligation consultation with a reverse mortgage specialist in Oregon. This consultation serves as a platform to learn about the nuances of reverse mortgages, make sure that it’s the right choice for your situation, and address any questions you may have.
Step 2: Attend a Mandatory Counseling Session
Counseling is a compulsory step in the reverse mortgage application process. Third-party counselors, approved by HUD, conduct these one-hour sessions either over the phone or in person. These sessions seek to educate individuals about reverse mortgages, enabling potential applicants to make informed decisions.
Step 3: Submit Application
Once the counseling certificate is submitted, your dedicated Mutual of Omaha Mortgage reverse mortgage loan officer will guide you through the application submission process. Along with the application, you must submit several documents, such as a photo I.D., your current homeowner’s insurance policy, and the most recent property tax bill.
Step 4: Property Inspection and Appraisal
Obtaining a reverse mortgage in Oregon includes an inspection and appraisal of the property by a Federal Housing Administration (FHA)-sanctioned appraiser. The purpose of the appraisal is to determine the property’s condition and market value, which plays a role in determining your ultimate loan amount.
Step 5: Processing and Underwriting
During the processing and underwriting stage, the underwriter reviews all submitted information. If additional information is required, your loan officer will relay this request to you. The underwriter will then approve the loan.
Step 6: Finalizing the Loan
Upon receiving approval from the underwriter, a date will be set to sign the final loan documents. This can be done at the title company’s office or your home, courtesy of a mobile notary service.
Step 7: Disbursement of Funds
After a mandatory three-business-day waiting period, you’ll start receiving your funds. The disbursement method is chosen during the application process: lump sum, monthly payments, a line of credit, or a combination thereof.
Oregon Reverse Mortgage Calculator
If you are considering a reverse mortgage loan and you want to find out how much you might be able to borrow, use our Reverse Mortgage Calculator.
However, it’s important to note that the numbers obtained from any reverse mortgage calculator are merely estimates. To get a more accurate picture of how much equity you may be able to access in your home, it’s always best to talk directly to one of our experienced reverse mortgage specialists.
Where to Find a Loan Officer in Oregon
Mutual of Omaha Mortgage is a licensed Reverse Mortgage lender in the state of Oregon. You can get started by calling 800-578-0283 or filling out this form here.
You can also find an Oregon 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:
- Portland Reverse Mortgage Lenders Near Me
- Eugene Reverse Mortgage Lenders Near Me
- Salem Reverse Mortgage Lenders Near Me
- Gresham Reverse Mortgage Lenders Near Me
- Hillsboro Reverse Mortgage Lenders Near Me
- Bend Reverse Mortgage Lenders Near Me
- Beaverton Reverse Mortgage Lenders Near Me
- Medford Reverse Mortgage Lenders Near Me
- Springfield Reverse Mortgage Lenders Near Me
- Corvallis Reverse Mortgage Lenders 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.