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Reverse Mortgages in Florida

Florida reverse mortgagesFlorida has a vast market for reverse mortgages due to the fact that residents over the age of 60 take up 17% of the population and because it is the retirement capital of the United States. Furthermore, the total amount of reverse mortgage loan originations in Florida exceeds 20,000, with Miami holding the heaviest loan concentration at nearly half that amount.

With the 2009 American Reinvestment and Recovery Act raising the national lending limit to $625,000, senior home owners are reaping the benefits of living in Florida with higher home values. FHA loan limits in Florida typically reflect those of the national average. However, areas like Miami-Dade county, FL have higher limits because of higher home values.

Of the several factors which set Florida reverse mortgages apart from those of other states, is that FL offers a 3% Homestead Tax Exemption on the homeowners property taxes. Key beneficiaries of this legislature are seniors whose home equity is sizeable but whose mobile income cannot cover expensive tax bills.

The FL Reverse Mortgage Process

The process of obtaining a reverse mortgage in the state of Florida is typical to that of most states in the country. After meeting with a FL approved HECM counselor, the first step is the initial application, wherein no costs are incurred and the lender is given legal permission to initiate the loan. In this initial step, extraneous factors are identified, such as interest rates, fees, and the amount to be loaned.

The second step is to participate in HUD required counseling. Once completed, the lender can introduce costs. The third step is the appraisal phase, wherein the legal value of the home is identified via an FHA approved appraiser following specific FHA loan protocol.

The fourth phase is underwriting, which typically takes longer than the other stages. During underwriting, the lender completes a title search, and the borrower acquires insurance for said title. Further duties of Florida lenders during underwriting is to authenticate the borrowers legal right to the property and to clear up issues outside of the reverse mortgage, such as unpaid liens, bankruptcies, etc.

The fifth and final stage is closing, wherein the necessary documents are reviewed and signed. Following closing is the right to rescission period, wherein the borrower has 72 hours to terminate the loan.