What is a reverse mortgage? A reverse mortgage is a special type of loan for seniors 62 or older that requires no monthly payments. The loan is paid off when you pass away or sell the house.
What types of homes are eligible?
Your home must be a single family dwelling or a two- to four-unit property that you own and occupy. Townhouses, detached homes, units in condominiums and some manufactured homes are eligible. Condominiums must be FHA-approved.
What's the difference between a reverse mortgage and a bank home equity loan?
With a traditional home equity loan, you are required to prove income and show credit. With a reverse mortgage, because there is no payment, there is no income or credit requirement. You can even be in bankruptcy.
Can the lender take my home away if I outlive the loan?
No! You do not need to repay the loan as long as you or one of the borrowers continues to occupy the property as the primary residence, keep the taxes and insurance current and perform the other obligations of the mortgage.
Will I still have an estate that I can leave to my heirs?
When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs. None of your other assets will be affected by an FHA-insured reverse mortgage loan. This debt will never be passed along to the estate or heirs.
How much money can I get from my home?
This depends on your age, current interest rates and your property value. Contact your loan officer for details on the exact amount you qulaify for.
Should I use the services of a firm that will give me the name of a lender for a small percentage of the loan?
No. With the new FHA regulations, these services are now illegal.
How do I receive my payments?
You have five options:
Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
Term - equal monthly payments for a fixed number of months selected.
Line of Credit - unscheduled payments or in installments, at times and amounts of your choosing until the line of credit is exhausted.
Modified Tenure - combination of line of credit and monthly payments for as long as the borrower remains in the home.
Modified Term - combination of line of credit and monthly payments for a fixed period of months which you choose.
Reverse mortgages are becoming extremely popular in America, and FHA created one of the first. Because FHA-insured reverse mortgages are federally-insured private loans, they offer a safe plan that can give older Americans greater financial security. Many seniors use one to supplement social security, meet unexpected medical expenses, make home improvements, and more. You can receive additional free information about reverse mortgages by calling AARP at (800) 209-8085, toll-free, or by going to the website at www.aarp.org. Since your home is probably your largest single investment, it's smart to know more about reverse mortgages and if one is right for you!
Are reverse mortgages safe?
Yes, they are very safe. The HECM program has been around for years and is one of the most regulated mortgage programs. You will be required to complete counseling from an FHA approved counselor which reduces fraud considerably.
What types of homes are eligible?
Your home must be a single family dwelling or a two- to four-unit property that you own and occupy. Townhouses, detached homes, units in condominiums and some manufactured homes are eligible. Condominiums must be FHA-approved.
What's the difference between a reverse mortgage and a bank home equity loan?
With a traditional home equity loan, you are required to prove income and show credit. With a reverse mortgage, because there is no payment, there is no income or credit requirement. You can even be in bankruptcy.
Can the lender take my home away if I outlive the loan?
No! You do not need to repay the loan as long as you or one of the borrowers continues to occupy the property as the primary residence, keep the taxes and insurance current and perform the other obligations of the mortgage.
Will I still have an estate that I can leave to my heirs?
When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in your home, if any, belongs to you or to your heirs. None of your other assets will be affected by an FHA-insured reverse mortgage loan. This debt will never be passed along to the estate or heirs.
How much money can I get from my home?
This depends on your age, current interest rates and your property value. Contact your loan officer for details on the exact amount you qulaify for.
Should I use the services of a firm that will give me the name of a lender for a small percentage of the loan?
No. With the new FHA regulations, these services are now illegal.
How do I receive my payments?
You have five options:
Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
Term - equal monthly payments for a fixed number of months selected.
Line of Credit - unscheduled payments or in installments, at times and amounts of your choosing until the line of credit is exhausted.
Modified Tenure - combination of line of credit and monthly payments for as long as the borrower remains in the home.
Modified Term - combination of line of credit and monthly payments for a fixed period of months which you choose.
Reverse mortgages are becoming extremely popular in America, and FHA created one of the first. Because FHA-insured reverse mortgages are federally-insured private loans, they offer a safe plan that can give older Americans greater financial security. Many seniors use one to supplement social security, meet unexpected medical expenses, make home improvements, and more. You can receive additional free information about reverse mortgages by calling AARP at (800) 209-8085, toll-free, or by going to the website at www.aarp.org. Since your home is probably your largest single investment, it's smart to know more about reverse mortgages and if one is right for you!
Are reverse mortgages safe?
Yes, they are very safe. The HECM program has been around for years and is one of the most regulated mortgage programs. You will be required to complete counseling from an FHA approved counselor which reduces fraud considerably.