- What is a Reverse Mortgage? A Reverse Mortgage allows you to convert your home equity into cash. Unlike a traditional mortgage that requires a loan payment, no prepayment is required with a Reverse Mortgage. You can also use a Reverse Mortgage to purchase a primary residence if you have the ability to pay the difference between the purchase price and what one qualifies for with a Reverse Mortgage.
- Will I qualify for a Reverse Mortgage? To qualify for a Reverse Mortgage you must be at least 62 or older, must own your home as a primary residence and have enough equity to fit the age/equity formula. You are required to receive consumer counseling from an approved HECM office prior to applying.
- Can I apply if I did not buy my home with a FHA mortgage? I t does not matter if you purchased your home with a FHA mortgage, the Reverse Mortgage will be FHA-insured.
- What type of home is eligible? Your home must be a single home or a 1-4 family with one unit owner occupied. HUD approved condominiums and manufactured home that meet FHA requirements are slo eligible.
- What are the differences between a Reverse Mortgage and a bank home equity loan? For a typical home loan you need income to qualify and good credit scores and has no age requirements and you would have to make monthly payments to repay the loan. A Reverse Mortgage does not have any income or minimum credit score but you need to be at least 62 years old and no monthly payments are required.
- Can I lose my home if I outlive a Reverse Mortgage? You have options, a Reverse Mortgage can be repaid either through the repayment of the outstanding loans or sale of home if there is sufficient equity to cover the loan balance. You can never owe money if the home is valued less upon a death of that homeowner, the estate would not owe the difference.
- Will I still have an estate that I can leave to my heirs? If the equity in the home is greater than the outstanding loan balance than the estate would get that upon sale of the home or repayment of the loan.
- Do I need an estate planner to do a Reverse Mortgage? FHA does not require using a estate service, just that one takes the counseling course.
- How much money can I get from my home? The amount that you qualify for depends on your age, the value of your home minus any outstanding mortgages. The older you are and greater equity gets you a larger credit lien.
- How do I receive my payments? You have the option of a lump sum at closing, a monthly tenure amount, a line of credit to draw on, or a combination of both.
Sun, Apr 26, 2009
Mortgages, Reverse Mortgages