A Home Equity Conversion Mortgage or HECM, also called Reverse Mortgage, is a sophisticated financial instrument for borrowers age 62 and older that requires no monthly mortgage payments. However, it leaves the borrower with the choice of treating their HECM like a regular mortgage and allows them to make monthly payments.
Three conditions allow loan repayment. Once the owner of the mortgage passes away, the owner leaves the home permanently, or the property is sold.
What is a Reverse Mortgage?
- A loan or line of credit against the equity of your home
- No monthly mortgage payments required by choice of the borrower
- Designed to help or meet the needs of retirees on fixed incomes
- Give the borrower tax-free cash for virtually anything
This is a safe choice for older homeowners who are not selling their house to the Lender or relinquishing their ownership rights. A reverse mortgage does not affect your social security and or available Medicare funds, line of credit, or structured monthly mortgage payments. Furthermore, this allows the inheritance of subsequent generations to remain after the homeowner passes away. This loan is an excellent option for many homebuyers. However, you must meet several requirements to qualify:
We evaluate your eligibility for a Reverse Mortgage by considering 3 basic factors:
The Homeowners Age: You must be at least 62 years old or older on the day of the closing. The older you are, the more funds are available to you.
The Value of your Home: This is referring to the value of your home. HUD will perform Your current home’s value by an appraisal, and approved by an appraiser.
The Mortgage Balance: This is the amount left to repay if you have a mortgage lien on your property.
With a Financial Assessment, HUD underwrites the application and considers the credit and income-worthiness of the buyer. It ensures you (the buyer) have the ability and willingness to pay Taxes and Insurance of your property. As a result of this process, HUD will calculate a residual income that represents the amount of money you must have remaining every month after paying debts and expenses.
The Federal Housing Administration HUD wants to make sure that you, the buyer, fully understand the features, benefits, rights, and legal obligations you have before taking on a Reverse Mortgage. Applicants must undergo an official, third-party therapy session by phone or in-person to ensure you have been completely updated. This session will explain the terms of your Reverse Mortgage in detail. After your session is completed, you will be issued a Certificate of Completion that is signed and delivered to the Lender.
With an FHA Insured Reverse Mortgage, you can turn part of the equity you build within your home’s value into tax-free funds that may be used today with flexible repayment options.
To see if you qualify for a Reverse Mortgage for Monthly Mortgage Payments
Give us a call or book a free video consultation! We have an expert group of loan officers that will guide you every step of the way.
We believe in helping you use the equity in your home for a stable future and help you grow financially with peace of mind. Let us guide you in your wealth-building process, call us for a free consultation today. Remember between the Lender and you now you a have friend Mutual Mortgage we are here for You.