Here is a list of the top five questions about reverse mortgages asked of a reverse mortgage specialist:
What kinds of homes qualify?
In order to be qualified for the Federal Housing Administration HECM, your house has to be a single family home or 2-to-4-unit house that has a single unit occupied by a borrower. Manufactured homes and HUD-approved condos which meet Federal Housing Administration requirements also are qualified.
What are the differences between a home equity loan and a reverse mortgage?
With second mortgages or home equity lines of credit, a borrower has to make month-to-month payments on the interest and principal. Reverse mortgages are different because they’ll pay you–there aren’t any monthly interest and principal payments. With reverse mortgages, you must pay utilities, real estate taxes, and flood and hazard insurance premiums.
Are we going to have an estate we’re able to leave to heirs?
As the house is sold or no longer utilized as a main residence, the interest, cash, and additional HECM finance fees have to be paid back. All of the proceeds beyond the quantity owed will belong to your estate or spouse. It’ll mean all remaining equity may be transferred to heirs. There isn’t any debt passed along to the heirs or estate.
How much cash am I able to receive from my house?
The quantity will vary by borrower and depend on:
•Age of youngest borrower or qualified non-borrowing spouse
•Present interest rate
•The lesser of appraised value or HECM Federal Housing Administration mortgage limitation of $625,500 or sales price
•If there’s more than a single borrower and no qualified non-borrowing spouse, the youngest borrower’s age is utilized to decide the quantity you’re able to borrow.
Should I utilize an estate planning service to locate reverse mortgage lenders?
The FHA doesn’t advise using any service which charges for referring borrowers to a Federal Housing Administration-approved lender. It’s possible to find a Federal Housing Administration-approved lender by looking on the Internet or by calling an HECM counselor for your listing. Services that are rendered by an HECM counselor are at a low cost or free.
