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 mortgageThis 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.
Qualifications that are required for reverse mortgageThere 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
The Home equity loan and the reverse mortgageIn 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
- Other utilities
- Medical care