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Reverse Mortgages were created with the purpose of giving retired Senior Citizens, age 62 or older, a steady income. The senior citizen must also live in his/her home. This income is derived from the equity of the home by a lender. The lender is not reimbursed until the time the home is sold. There are three types of reverse mortgages.
The first type of reverse mortgage is Single Purpose reverse mortgage. Single Purpose reverse mortgages are usually granted to those with low to moderate incomes usually by the government. The purpose of this type of mortgage is to help the homeowner pay for things involving the home and property such as taxes, improvements, and/or repairs.
The second type of reverse mortgage is Home Equity Conversion Mortgages (HECM) also known as federally insured reverse mortgages. This loan is backed by HUD (Housing and Urban Development). This type of loan is pricier than the Single Purpose loan but does not require single purpose use. HECM loans require that you meet with a counselor to discuss costs, risks, and possible alternatives including choosing one of the other two types of loans.
The third type of reverse mortgage is proprietary. The companies that have created them insure these loans. They are very similar to the HECM reverse mortgages in that they are pricier than the Single Purpose loans and follow the same guidelines in determining who qualifies for one and how much. Proprietary reverse mortgages differ from HECM loans because they do not require meeting with a counselor before applying for one.
Both reverse mortgages however determine the amount you may borrow from assessing factors such as age, home value, location, and interest rates. To determine which reverse mortgage is right for you, you should contact a loans officer knowledgeable of reverse mortgages or a HECM counselor.
For more resources regarding
reverse mortgage for seniors or even about
reverse mortgage lenders and especially about
Types of Reverse Mortgage please review these pages
Article author: Fabiola Groshan
Some seniors are skeptical of reverse mortgages. They worry that they are tools of dishonest lenders who hope to steal the title of their homes and rob them of years of faithful monthly home payments.
But the reality surrounding reverse mortgages may surprise many seniors. Reverse mortgages have actually been around for over thirty years. In fact, some of the first federally backed reverse mortgages began in the late 70s and by 1980, the Federal Housing Authority began endorsing reverse mortgages. Later, in 1982, the U.S. Senate began hearings on the need for reverse mortgages, which later became a part of the U.S. Department of Housing and Urban Development (HUD).
Today, the Federal Housing Authority (FHA) administers HUD reverse mortgages. The FHA’s latest reverse mortgage is called the Home Equity Conversion Mortgage (HECM) and is becoming very popular with seniors. This program allows seniors to withdraw some of their home’s equity to help with financial security. Seniors can use the monthly payments for healthcare, daily living expenses or other necessities.
The HECM requires that seniors be 62 years or older and that their home be paid off or have a very low balance that can be paid off with the remaining equity in the home. The home must be the senior’s primary residence. The lender will not own the home, and no payments will be made on the home as long as the senior or the other borrower lives in the home.
Seniors can also consult with a reverse mortgage counselor. The FHE provides HECM counselors and can be consulted before applying for a loan at (800) 569-4287. AARP can also help provide information about reverse mortgages and refer seniors to a reverse mortgage counselor. The counselor can help seniors complete the reverse mortgage application and recommend reverse mortgage lenders. The FHA offers a free list of approved reverse mortgage lenders online.
For more resources regarding
Reverse Mortgage or even about
Reverse Mortgage Program and especially about
Reverse Mortgage Quote please review these pages.
Article author: Fabiola Groshan
If you are looking to find out more about reverse mortgages then you should be able to discover some answers to at least some of your questions. An annuity reverse mortgages is a home loan product that is specifically addressed to homeowners that are over 62 years old and in order to qualify you will need to own at least 75 percent interest in your home. The way it works is very simple and it implies that you get a home equity loan that is based on the current market value of your home and the amount that you still owe on the property. Although you receive the cash when you make the reverse mortgages there are some programs that allow you to spend them however you find fit while some programs have strict rules when it comes to the usage of the money.
One of the best features of reverse mortgages is that you do not have to pay monthly mortgage rates but if you decide to sell your home or pass away then the loan will need to be repaired by the proceeds from the sale or from your estate. Keep in mind that not every mortgage lender that offers home loans will also offer a reverse mortgages program. The best approach to find reverse mortgage deals is to talk to mortgage brokers or to non-profit organizations such as HUD. If you find the persons that deal with these types of loans you will be able to find out more information about how the loans work and they will be able to direct you to lenders that offer reverse mortgage.
For more resources regarding
loans for senior or even about
reverse mortgage and especially about
reverse mortgage costs please review these pages.
Article author: Fabiola Groshan
