Reverse Senior Mortgage

• Single-Purpose Reverse Mortgage
• Home Equity Conversion Mortgage
• Proprietary 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 ca 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 get to stay in your home while receiving payments, instead of downsizing
• Often it’s tax-free
• Eliminate or lower your mortgage payments, allowing more financial freedom
• Make home improvements
• Consolidate your debts
• Pay for in-home care
• Purchase a new home with a Home Equity Conversion Mortgage for Purchase
• Start saving money

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

When you sell your home, you or your estate will repay the cash you received from the Reverse Mortgage to the lender. The remaining equity in your home, if any, belongs  to you or our heirs.

The borrower will pay back the cash advances they have received plus the accumulated interest and any upfront costs that were financed initially they will also be added to the loan balance.

With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ration 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 FHS HECM you cannot be foreclosed or forced to vacate your house because you “,issued your mortgage payments.”

The amount you can borrow depends on:

The age of the youngest borrower

Current interest rate

Lesser of the appraised value of your home, the HECM FHA mortgage limit for your area or sales price.

Also, the more valuable your home is, the older you are, the lower the interest rate, the more you can borrow. If there is more than one borrower, the age of the young borrower is used to determine the amount you can borrow.

No. You own your home and retain title through the life of a Reverse Mortgage. Even if the money runs out, you can stay in your home as long as you wish. As the homeowner, you are responsible for keeping up payments on your homeowner’s insurance and property taxes, and for maintaining the condition of your home.

The age of the youngest borrower

Current interest rate

Lesser of the appraised value of your home, the HECM FHA mortgage limit for your area or sales price.

Also, the more valuable your home is, the older you are, the lower the interest rate, the more you can borrow. If there is more than one borrower, the age of the young borrower is used to determine the amount you can borrow.

Appraised Value of Home: $450,000

70% is granted to borrowers ($315,000)

$315,000 is released to do as you please

If there is an outstanding balance you get the difference ($315,000 – balance) = Net Proceeds. If zero balance, you keep the whole disbursement and never have to pay it  back or make a payment while still in your home or passing pf both borrowers.

Once you permanently move out of your home or pass it on to your estate, the loan must be repaid. You or your heirs can either pay the balance due and keep the home, or sell the home and sue the proceeds to pau off the Reverse Mortgage.

The amount owed includes the amount borrowed, the accrued interest, service fees, and any other costs or fees financed as part of the loan. In no case will the repayment amount exceed the value of the home at the time the loan is due.

Many of the costs associated with regular mortgages also apply to Reverse Mortgages. You’ll be charged an origination fee, appraisal fee, and other standard closing costs. For most Reverse Mortgages, these fees are capped at a defined amount and may be financed by the loan, so there’s usually little out-of-pocket expense.

A Reverse Mortgage doesn’t affect your regular Social Security or Medicare benefits, but it may affect the benefits your achieved from the federal Supplemental Security Income program or from state-run programs such as Medicaid. Consult a Reverse Mortgage lender or Medicaid expert for more details.

Reverse Mortgages are designed for homeowners at least 62 years of age with moderate to significant equity in their homes who want to eliminate their mortgage payment and/or receive additional cash.

Definitely! Any existing  mortgages will be paid off at closing. The you’re free to enjoy the financial freedom that comes along with eliminating your mortgage payment.

Vacation homes or other secondary residences, and rental properties of more than four units do not qualify. But if you are looking to get cash out of a property you don’t use  primary residence, get in touch with Tailored Home Loans for your mortgage options.

A home owner who has put the home in a living trust can usually take out a Reverse Mortgage subject to review of the trust documents.