Reverse Mortgage My House - Find A Broker
Has your curiosity been piqued by those recent television infomercials about Reverse Mortgages? Can a Reverse Mortgage help you if you need financial relief from making current home mortgage payments?
There are age restrictions for obtaining a Reverse Mortgage. It's only available to homeowners 62 years of age or older under certain conditions. The first Reverse Mortgage was created by the Federal Housing Administration (FHA) with a product called the Home Equity Conversion Mortgage (HECM). A reverse mortgage is a special category of home loan that allows the homeowner to convert a certain percentage of the home's equity into cash which may be needed for a variety of reasons, including emergencies, healthcare expenses or day to day living expenses.No repayment of the cash received is demanded until the homeowner no longer makes the home his or her primary residence.
Not everyone can qualify for an HECM offered by the FHA. You must be a homeowner 62 years of age or older, own your home outright, you must live in your home as your primary residence and have a remaining mortgage balance that is low enough to be paid off with the cash proceeds of the reverse loan. It does not matter that your home's current mortgage was FHA financed or not in order to qualify for a HECM.
Only single family homes, buildings with no more than 4 units, one of which is occupied by the owner applying for the HECM, and certain FHA-approved condominiums and mobile homes can qualify for this type of loan restructuring.
One of the most attractive features of the HECM is that, unlike a traditional home equity loan, the cash you receive from a Reverse Mortgage does not have to be repaid, and does not depend on you having a current income or a sufficient income to debt ratio in order to qualify. Instead of you sending a monthly mortgage payment to the bank, a Reverse Mortgage pays you. And that amount depends upon the current interest rate, the current value of your home and your age when you apply for the HECM. If you want to qualify for the largest amount of cash, you must be in a situation where you don't have a great amount of debt remaining on your current home loan, your home has strong market value and you are even older than the 62 year minimum age requirement.
With a Reverse Mortgage you cannot be foreclosed upon and are only responsible for keeping the real estate taxes, utility bills and insurance policies on the property paid in full and current. Only upon the sale of your home are you or your estate responsible for repaying the Reverse Mortgage cash-out received plus predetermined interest and fees.
Homeowners qualifying for a FHA HECM have a choice of five different ways to receive their cash payment. These include Tenure payments, equal monthly payments as long as you live in the house; Term payments, equal monthly payments for a fixed amount of time; Line of Credit, unscheduled payments at your discretion until the line of credit is exhausted; Modified Tenure Payments, combining monthly payments with a line of credit as long as you live in the house; and Modified Term Payments, offering a line of credit with monthly payments for a set number of months you determine.
