The basic FAQs of reverse mortgage

The HECM allows a senior American individual of age 62 or greater to withdraw their property’s equity.  This plan is insured by the federal government and is safe for most of the senior American citizens. Most of the American citizens get their mortgages advantages by paying taxes, interests or investing in medical care. For citizens who have chosen the right reverse mortgage, often make the correct decisions.

What is the idea behind reverse mortgage

This is also a loan like any other but specifically in reverse mortgage you don’t have to pay the money back till the end of the contract. The contract ends when either you die, or you move out from your apartment. The borrowers of HECM do not have to pay back the loan as long as they are living in the apartment. basic FAQs of mortgage

Qualifications that are required for reverse mortgage

There are certain basic requirements for HECM loans. The underlying basic requirements for each state are different but some states tend to modify their laws a little bit. These amount of the loan varies depending upon the age of the senior citizen, but still you get to keep the home ownership. All you have to do is pay your own taxes, interests and bills.

Can I still apply for the loan if my apartment is not purchased from the mortgage insurance of FHA?

Of course yes. You are still eligible to apply for the HECM loans regardless of where you have purchased your house from.

What are the different home types that are eligible for the loan?

  • Single family home
  • 2 or 4 unit apartment with any one unit that has been occupied by the borrower
  • Condominiums that have been approved the HUD
  • Homes manufactured that meet requirements of FHA
All these types of property owners are eligible to apply for reverse mortgage.

The Home equity loan and the reverse mortgage

In the reverse mortgage there is no interest and no monthly payment that needs to be paid by the borrower. He however, himself gets paid with the loan amount from the lender. With the reverse mortgage you need to pay other things like:
  • Estate taxes
  • Flood insurances
  • Hazards
  • Other utilities
  • Medical care

Can the apartment be named after heirs

As you die the loan can be transferred to your heirs who can either repay the loan by selling their assets or the other thing that can happen is that the house is sold to pay for the loan. That’s why if you focus on all the above FAQs and understand that consulting a finance professional is necessary before choosing any reverse mortgage program then you will end up making the right decision. Reverse mortgage is a very serious decision that needs to be tackled with care.  

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