Tuesday, February 28, 2012

THE REVERSE MORTGAGE FOR PURCHASE

Yes, I did say Reverse Mortgage for Purchase. I love this product. If you are looking to downsize or just want to own but don't want to use up all the "cash" you have from either the sale of your existing home or cash you have in investments etc., this is a great way to go.What this in effect means for the senior borrower is that they can purchase a home using a reverse mortgage instead of the traditional mortgage. So seniors who wanted to purchase a new home but who do not have good credit, a steady substantial income or just don't want to make those monthly payments at this time in their lives, can now easily do so with the already effective reverse mortgage purchase loan. NO CREDIT CHECKS OR INCOME VERIFICATION.To benefit more from this new program, seniors may choose to downsize by moving into a smaller home or cheaper community closer to family and friends so as to eliminate the need to make any extra down payment and also leaves them with more extra proceeds from the sale of the old home for their personal use. The new program is even made more attractive when one considers that they would not have to make any monthly mortgage payments for as long as they reside in their new home.The new Purchase Reverse Mortgage became effective in January 1, 2009 and since then the FHA began to insure reverse mortgage purchase loans. If you are a senior who qualifies for this program and wishes to change your home now is the best time to begin especially because values are so low right now, you're new home only stands to increase in value

Sunday, September 18, 2011

Top Ten Things to Know if You're Interested in a Reverse Mortgage

1. What is a reverse mortgage?

A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence or fail to meet the obligations of the mortgage. You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.

2. Can I qualify for FHA's HECM reverse mortgage?

To be eligible for a FHA HECM, 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, 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 or by phoning (800) 569-4287 (800) 569-4287

3. Can I apply if I didn't buy my present house with FHA mortgage insurance?

Yes. It doesn't matter if you didn't buy it with an FHA-insured mortgage. Your new FHA HECM will be FHA-insured.

4. What types of homes are eligible?

To be eligible for the FHA HECM, your home must be a single family home or a 1-4 unit home with one unit occupied by the borrower. HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible.

5. What's the difference between a reverse mortgage and a bank home equity loan?

With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments. The reverse mortgage is different in that it pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home, sales price or FHA's mortgage limits, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you may borrow.

With a HECM, you don't make monthly principal and interest payments, the lender pays you according to the payment plan you select. Like all homeowners, you still are required to pay your real estate taxes, insurance and other conventional payments like utilities. With an FHA HECM you cannot be foreclosed or forced to vacate your house because you "missed your mortgage payment."

6. 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 live in the house and keeps the taxes and insurance current and maintains the property.

7. Will I still have an estate that I can leave to my heirs?

When you sell your home, 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.

8. How much money can I get from my home?

The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you may borrow. You can use an online calculator like the one on the AARP website to get an idea of what you may be able to borrow.

9. Should I use an estate planning service to find a reverse mortgage?

FHA does NOT recommend using any service that charges a fee for referring a borrower to an FHA lender. FHA provides this information free, and HECM housing counselors are available for free or at very low cost.

10. 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 period of months selected.

Line of Credit - unscheduled payments or installments, at times and in amounts of your choosing until the line of credit is exhausted.

Modified Tenure - combination of line of credit with monthly payments for as long as you remain in the home.

Modified Term - combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.


Source:
U.S. Department of Housing and Urban Development451 7th Street S.W., Washington, DC 20410Telephone: (202) 708-1112 (202) 708-1112 Content current as of 25 June 2010

Saturday, September 10, 2011

THE REVERSE MORTGAGE FOR PURCHASE

Yes, I did say Reverse Mortgage for Purchase. I love this product. If you are looking to downsize or just want to own but don't want to use up all the "cash" you have from either the sale of your existing home or cash you have in investments etc., this is a great way to go.

What this in effect means for the senior borrower is that they can purchase a home using a reverse mortgage instead of the traditional mortgage. So seniors who wanted to purchase a new home but who do not have good credit, a steady substantial income or just don't want to make those monthly payments at this time in their lives, can now easily do so with the already effective reverse mortgage purchase loan. NO CREDIT CHECKS OR INCOME VERIFICATION.

To benefit more from this new program, seniors may choose to downsize by moving into a smaller home or cheaper community closer to family and friends so as to eliminate the need to make any extra down payment and also leaves them with more extra proceeds from the sale of the old home for their personal use. The new program is even made more attractive when one considers that they would not have to make any monthly mortgage payments for as long as they reside in their new home.

The new Purchase Reverse Mortgage became effective in January 1, 2009 and since then the FHA began to insure reverse mortgage purchase loans. If you are a senior who qualifies for this program and wishes to change your home now is the best time to begin especially because values are so low right now, you're new home only stands to increase in value.