Dont be fooled with paying fees for a Reverse Mortgage

Beware of the Reverse Mortgage!!! Don’t get fooled into paying fees!!

Yes, I mean FOOLED, because there ARE many Originators who will try to convince you that high fees are “just part of the program”.

(This almost happened to me as I was getting a Reverse Mortgage on my own house about 4 years ago)

Well, the truth of the matter is that the High fees area part of the HIGH PROFITS that so may of the Originators and Brokers make.

However, there are Brokers who can provide your Reverse Mortgage WITHOUT the high fees associated with the Reverse Mortgage. With the right Broker, the reduction in fees most likely will come from the Broker giving up some of their profits and paying the fees out of the Broker Commissions. North Point Financial is one of those Brokers!!!

BEWARE!!!! Know the difference between NO costs, and NO out of pocket costs. NO COSTS means just that, you don’t pay the costs. NO OUT OF POCKET COSTS, usually means that the costs are added to your loan balance!! This means that you are paying the costs!!!! This means that the loan balance will be much higher than the amount of money you get.

OK, now that you are perking your ears up, I have to say it is not all that simple. Brokers can and do manipulate the interest you pay to increase their commissions, so in some cases, you may well be paying those “no costs” with a higher interest rate.

I can tell you that North Point Financial is one of those Brokers who make big concessions in their commissions to pay the Client’s loan fees. You will discover that NPF will pay your costs and at the same interest rate that others may be offering.

Look at our cost example page on the web site There you can see an actual HUD closing statement and notice that most all the costs and fees were covered with broker commissions. That particular loan had the same interest margin as what others were offering along with their high fees.

You are welcome to email or call to set up a personal consultation, where we will do our best to answer all your questions, as well as answer the ones you should have asked. 🙂

email is This is the best way to contact us.

Or call our message line 530 342 1665

Thanks from the folks at North Point Financial


Your bucket list and the reverse mortgage

How many Seniors had dreams of their retirement days, but are now realizing that many of those dreams will not happen.

Only about 8% of seniors have the money they expected or hoped for in their retirement.  For the 92% remaining, much of their hard work is tied up in their home equity.  With the new banking regulations, it is very difficult to access that equity for your use.

Banks will no longer issue equity loans to those without a substantial income to facilitate repayment.  Even if you are able to get such a loan, what will you do if something happens to your income stream?  You risk foreclosure.

Enter the Reverse Mortgage!  I think this is one of the best things to ever happen for senior citizens. It can be not only your dream maker but one to help you realize that dream.

A reverse mortgage does not require the substantial income to book a conventional loan.  The portion of income needed to repay the loan is NOT needed.  Some income is needed, like enough to pay your basis expenses, the property taxes and upkeep etc. Simply put, it is MUCH easier to qualify for a Reverse Mortgage than a conventional loan.  You must be at least 62 years old though.

There is also the added benefit of the SECURITY a reverse mortgage provides.  You don’t have to worry about making those mortgage principle and interest payments!!  Should something happen to you that cut your income, you can still live in your house with no P&I payments required.

So, what are those bucket list items that you wish you could check off?

Do you want to help your kids buy a home, start a business, or make your life more enjoyable with the extra cash.

For answers to most of  your questions, please visit our web site:  Or call 530-342-1665










Reverse mortgage and Sernor health care

Oftentimes we wonder how we will live in our later years. Will we have to be in a home, or cared for at home?  What if we dont have the money to live in a care facility?  What then??  The costs of senior care homes are very expensive.  Many seniors have to sacrifice on the care they need because they dont have the money to live in a care home, nor do they have the funds to hire someone to provide care in their own home.

Staying in your own home is preferred by a good number of Seniors.  However many have to sell their own home and move to something less expensive, in order to have funds to pay for in home care.

However with a reverse mortgage, Seniors may have the funds they need to pay for care in their own home.  Taking a reverse mortgage on the home provides the funds needed as well as avoids the troublesome costs of selling and moving.

I have often said that the  reverse mortgage is the best thing to happen to Seniors. This is a good example of how it will improrve the lives of everyone around the homeowner.




What about the kids inheritance?

Does a reverse mortgage take away from your family’s inheritance?

It may and it could, but good planning can actually give them more in the end.  Remember, you are in control of how you manage your funds. California Real estate inflation rates over the long haul have averaged higher numbers than loan interest rates or follow closely,  meaning the value of  your equity in the house will not change much.  In this case the family inheritance will not grow, but it will not diminish either.  Of course the future is entirely speculative, but the past has a record.

Another aspect to consider is timing.  By the time kids get an inheritance, many of them don’t need it.  They are well established and on their way.  With a reverse mortgage, some Borrowers choose to use the funds to give the kids a jump start in life -NOW, when they need it!!  Help them buy a  house, start a business etc.  Or, as was my case, pay off their student loans.  In the end, the kid’s investments may be worth much more than the inheritance they would have gotten without a reverse mortgage on Mom and Dad’s house. Many Borrowers also take some of the funds and enjoy a family vacation, or other activities otherwise not possible without the reverse mortgage funds.

Talk to your kids about your plans.  But, be sure you talk with a good knowledge base.  Consult with your Loan Broker about all aspects of the reverse mortgage before you ask for opinions from others.  You can be relatively certain that the “others”  will have little or incorrect knowledge on the subject matter.

And dont forget about yourself.  You earned the money that is tied up in your house.  You deserve to enjoy your retirement to its fullest!!!



The high costs of a reverse mortgage exposed

Man with money

I hear so many negative comments about reverse mortgages. From “the bank will take your  house” to “they are very costly and expensive.” Here is the real scoop about where all of those “high costs” come from.

I’ll start by saying that I got a reverse mortgage from one of the larger companies providing them. I was met by a sweet lady who seemed so trustworthy and nice. She explained all the costs and said that these were just the fees and costs associated with the loan. I believed her. I was paying FHA mortgage insurance, all of the title and closing fees, as well as processing and origination fees to the lender (another $6k or so).  All in all, it was about $20,000 in costs and fees. YES, this is a high cost loan.

About a week before it was supposed to close, I decided to look into all of the fees and costs as well as where the lender was making their money. I have been in the lending and construction business for over 30 years and have to say, I should have been more suspicious right from the beginning.

What I found out was that the lender was going to make nearly $38,000 in profits on my loan! I threatened to cancel if they didn’t pay all of my fees (which they did of course, because they still made good money).

What came of this experience was me bringing North Point Financial back into being so that I could provide reverse mortgages to other seniors and do it at a more reasonable cost. North Point Financial is licensed with the NMLS (985055 and 974889) as well as the Cal Dept. of Real Estate (00662853). We are a wholesale broker for one of the major reverse mortgage lenders in the country. Reverse mortgages are what we do.

I think that reverse mortgages are a great avenue for many seniors.

We at North Point Financial pay nearly all of the fees out of our wholesale commissions -not by adding them to the loan balance! If you go to our website, you can view a HUD closing statement that shows broker credits paying most of the costs. The total closing costs to the borrower on the loan was only $291. That is it!

In this case, the borrower chose a loan scenario which allowed us to credit about $8000 to their closing costs, resulting with only $291 due from the borrower.  We paid the Mortgage insurance, title and escrow costs etc.    These closing costs were NOT added to the loan balance.  The accumulating interest for the chosen loan  scenario is part of the cost of the loan, but occurs after closing.

Although  this scenario may not be typical to the industry, we at North Point Financial strive to provide similar credits to our customers if the loan scenario provides.

Cliff Johnsen

The real and perceived safety net of a reverse mortgage

umbrella green

A reverse mortgage provides a level of security that is not available with a conventional loan.

As we get older, a conventional mortgage becomes a little more risky. What if we lose our ability to pay the mortgage every month? What happens if we get in an accident, become ill, or suffer a debilitating stroke that renders us unable to continue to pay? Most likely, the bank will foreclose.

First, if you have a reverse mortgage, you don’t have to make any mortgage payments.  You still must maintain the property and pay the taxes, but that is a much smaller amount of money to worry about.

A second and important safety net is the lack of a deficiency judgment. If you had a recent conventional loan prior to the 2009 market crash, your home loan was likely upside down, meaning the loan was larger than the value of the house. In that case, you had to do a short sale and trash your credit rating (if the bank was agreeable). Or you had to let the bank foreclose. In the latter scenario, banks may have been able to sue you for the loss. They could do this by getting a deficiency judgment.

If you had a reverse mortgage in the above scenario, the FHA insurance would have paid the deficiency without harming your credit.  And if you wanted to keep the house or sell it, you would not have to go through the short sale negotiations, as the reverse mortgage balance would never be more than the appraised value of the home.  So, you would only owe a market value and never any more than that.  This is a sweet benefit of reverse mortgages that most people don’t consider.

Some scenarios for comparison:

1. Lower payments.
In the case of wishing to lower monthly payments, property owners may look to do a conventional refinance. One stumbling block that many seniors face is the inability to qualify for a conventional loan. While new banking regulations require a substantial income to qualify for a conventional loan, reverse mortgage income requirements are much lower.

2. Getting cash.
If you have little or no loans on your property, a refinance can produce some cash. Many seniors who are retired don’t have the income necessary to qualify for an equity line or conventional mortgage. However, they may meet the much lower income requirements for a reverse mortgage. If you are able to get a conventional refinance, you may have a balloon payment due in the future and risk foreclosure if you can’t make the payments for any reason. A reverse mortgage has a balloon or due date payment but not till you no longer live in the home.   As long as you live in the home, you don’t have to make any principle or interest payments.  However, you must make payments for your property taxes and insurance as well as upkeep on the home.

3. Getting increased monthly income with no mortgage payments.
A reverse mortgage offers several ways to benefit. You can choose to have the bank send you a monthly check, take a line of credit, or combine both. In all cases, you don’t have to worry about foreclosure due to being unable to make the traditional monthly mortgage payments.

4. Purchasing a new home.
Yes, you can use a reverse mortgage to purchase a new home. You will need about 50% equity to do that.  You can upgrade from your present home to a larger one and still have no monthly mortgage payments. If you have about 50% of the required cash, you can use a reverse mortgage to finance the remainder and purchase a nicer or larger home.

5. Moving to be near your family.
If you own your home, but wish to move to another area where homes are more expensive, a reverse mortgage may be the answer.

The safety and peace of mind that I get from my reverse mortgage is wonderful. Knowing that I can stay in my home as long as I wish and not have to worry about monthly payments is very nice.

The extra cash that I was able to take out went to eliminating other payments from credit cards and my kids’ student loans, which were at a higher interest rate. It was a great decision to get a reverse mortgage. I have seen many benefits from it. My lifestyle became much happier and my monthly spendable cash went way UP!!  All with the security of knowing that I will be able to stay in my home.

Cliff Johnsen

Cliff Johnsen explains exactly what a Reverse Mortgage is.

What is a Reverse Mortgage?

Simply put, a reverse mortgage is a home equity loan. However, there are some significant differences between a reverse mortgage and a home equity loan.

The HECM reverse mortgage loan offers the borrower many features not found in a regular home equity loan. This is possible because the FHA insures your loan for the bank.  I’ll list some of the features here:

  1. For those who are 62 and older, the income qualifications are much lower. You need to have sufficient income to pay the property taxes, maintenance, and other living expenses, but you don’t have to show income capable of paying off the principle of the loan.
  2. Depending on the program you choose, you can have monthly payments sent to you, take a lump sum right in the beginning, or combine each to your specific needs.
  3. You don’t have to make any monthly loan payments. (except for property taxes and insurance)  Instead some loan programs provide for the Lender to send you money each month.
  4. There is no pre determined call date or balloon payment due down the road.  The call date or loan due date orrurs  after you are no longer living in the home.   The As long as you live in the house, you can continue to receive payments and not make any payments on the loan.

A home equity loan or a new conventional loan on your house would require substantially more income for qualification.  Usually you must make monthly payments, and there may be a big balloon payment due down the road. If for some reason you can no longer make payments, the bank may foreclose on the property.

The reverse mortgage was designed in part to improve the quality of living for seniors who have equity in their home but are not able to borrow against it due to limited income.

I have a reverse mortgage on my own home. It was one of my best financial decisions ever. In my case, I paid off higher interest loans with the proceeds from the reverse mortgage. My credit scores went up and my debt-to-income ratios improved dramatically, allowing me to refinance other rental properties. It gave me the freedom to enjoy my retirement without any worry about making regular bank payments should I not be able to work. It is a big security blanket. I am now able to do things with my family that would not have been possible without the reverse mortgage.

I have been in the construction and lending business over 40 years. I am now exclusively providing reverse mortgages for other seniors through my company, North Point Financial. Our web site is There you will find many useful pages for your inquiry.

Cliff Johnsen