If your age 62 or older you may have considered looking into a reverse mortgage. Before you take action there are several resources that can be made available to you free of charge. You can get the definition of a reverse mortgage here CLICK HERE
FREE REVERSE MORTGAGE INFORMATION | CALL 1-888-507-6036
1. What is a reverse mortgage?
A reverse mortgage is a special type of loan that lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you. However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage.
2. Can I qualify for FHA's reverse mortgage?
To be eligible for a FHA reverse mortage, the FHA requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, have the financial resources to pay ongoing property charges including taxes and insurance, and you must live in the home. You are also required to receive consumer information free or at very low cost from a HECM counselor prior to obtaining the loan. You can find a HECM counselor online
3. Can I apply for a reverse mortgage even if I did not buy my present house with FHA mortgage insurance?
Yes. You may apply for a HECM regardless of whether or not you purchased your home with an FHA-insured mortgage.
4. What types of homes are eligible?
To be eligible for the FHA HECM, your home must be a single family home or a 2-4 unit home with one unit occupied by the borrower. HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible.
5. What are the differences between a reverse mortgage and a home equity loan?
With a second mortgage, or a home equity line of credit, borrowers must make monthly payments on the principal and interest. A reverse mortgage is different, because it pays you – there are no monthly principal and interest payments. With a reverse mortgage, you are required to pay real estate taxes, utilities, and hazard and flood insurance premiums.
6. Will we have an estate that we can leave to heirs?
When the home is sold or no longer used as a primary residence, the cash, interest, and other HECM finance charges must be repaid. All proceeds beyond the amount owed belong to your spouse or estate. This means any remaining equity can be transferred to heirs. No debt is passed along to the estate or heirs.
7. How much money can I get from my home?
The amount varies by borrower and depends on:
- Age of the youngest borrower or non-borrowing spouse
- Current interest rate
- Lesser of appraised value or the HECM FHA mortgage limit of $625,500 or the sales price; and
- Initial Mortgage Insurance Premium
If there is more than one borrower, the age of the youngest borrower is used to determine the amount you can borrow.
These are just a few of the most frequently asked questions regarding reverse mortgages.
We offer a free reverse mortgage counseling service at no cost to you that can provide you with all of the most accurate and up to date information available by calling 1-888-507-6036
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