Texas Reverse Mortgage Line of Credit

The ballot would read, “The constitutional amendment authorizing line-of-credit advances under a reverse mortgage.”

If passed by those voting Nov. 8. SJR 7 would amend the Texas Constitution to authorize new options for reverse mortgage agreements for senior citizen homeowners allowing them to draw advances at unscheduled intervals, if and when requested, and only in the amounts requested, during the loan term, according to the Secretary of State's office.

These are in addition to options that would allow a lump sum payment after settlement or regular periodic, predetermined equal amounts over a term of years or the lifetime of the homeowner.

Additionally, SJR 7 would, according to the Secretary of State's office: Prohibit the agreement from requiring the use of a credit card, debit card or similar device to obtain an advance; prohibit the charge or collection of a transaction fee solely in connection with any debit or advance, after the time the extension of credit is established; and prohibit the lender or holder from unilaterally amending the extension of credit.

Linda Roller, a mortgage agent with American Bank of Texas in Gainesville, said seniors could use the additional options offered by Proposition 7, but families should be cautious.

“Reverse mortgages are something that we have to be very careful with. Our seniors sometimes don't understand exactly what they're getting into,” Roller said. “We need to make sure they have good counsel before they enter into that.”

Reverse mortgages were approved by the voters in a September 2003 constitutional amendment election (Propositions 6 and 16).

“I don't know of any that have been taken out in Gainesville, yet,” said Ben Hatcher of First State Bank, adding that not many people are utilizing reverse mortgages in Texas.

RTG Consultants serves the entire state of Texas, call 1-888-973-8377 or fill out our online Free Reverse Mortgage Analysis Form.