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More information about reverse mortgages: |
You’ve worked hard to pay the mortgage on your home. With a reverse mortgage you can receive the equity that you earned. A federally insured reverse mortgage program will help you unlock that equity by increasing your monthly income. Rest easy knowing you’re protected because with a reverse mortgage you can:
Speak with one of our professionals today and learn how you can make the most of a reverse mortgage.
If you're ready to get started on your reverse mortgage apply now.
The Reverse Mortgage How This Retirement Tool May Be Right For You:
The reverse mortgage is a very popular financial product today, however, the reverse mortgage is not for everyone. Essentially, if you are over 62 years of age and you have some considerable equity in a property that you currently own then a reverse mortgage might just be the right product for you. To put it simply, the reverse mortgage tool will allow you to take out a home equity loan against the equity you currently have in your home, however you do not have to repay the loan as long as you are living in the property (you are getting the reverse mortgage against). As long as you live there, and along as you own the property you will not have to pay back the loan.
If you would like to realize the built up equity in your home as expendable without having to make loan payments as you use the equity as cash then you may want to fund your retirement (in part) with a reverse mortgage
Here Is How They Work
A reverse mortgage is odd in that you do not make payments to the lender as you borrow the money. The lender will actually make payments to you based on the amount of equity that you have built up in your home. When you no longer live in the home, your lender will then simply sell you property to recover the money that was paid out to you during the time that you were using the reverse mortgage.
Although there are many different types of reverse mortgage products available they generally all share the following common denominators:
- The older you are, the more that a lender is willing to lend you. The more valuable your home is, the larger that loan that you will be given.
- You cannot get a reverse mortgage as a secondary mortgage. Your reverse mortgage must be your primary mortgage.
- You will be hit with some type of financing fees.
- You will want to meet with a lawyer before you sign up for a reverse mortgage because the lender can and will request for you to repay the loan if you don't pay your property taxes, if you sublet our the property, if you committ fraud, if you declare bankruptcy, and if you do various other exciting things while you are realizing a reverse mortgage (see your lawyer).The Following Information was obtained from http://www.investopedia.com/articles/04/120204.asp?viewed=1
HECM Loans
Reverse mortgages have been around since the 1960s, but the most common reverse mortgage is a federally-insured home equity conversion mortgage (HECM). These mortgages were first offered in 1989 and are provided by the U.S. Department of Housing and Urban Development (HUD). HECMs are the only reverse mortgages issued by the federal government, which limits the costs to borrowers and guarantees that lenders will meet the obligations. The primary drawback to HECMs is that the maximum loan amount is limited.
Non-HECM
Non-HECM reverse mortgages are available from a variety of lending institutions. The primary advantage of these reverse mortgages is that they offer loans in amounts that are higher than the HEMC limit. One of the drawbacks of non-HECM loans is that they are not federally insured and can be significantly more expensive than HECM loans.
Total Annual Loan Cost (TALC)
Although the interest rate on an HECM mortgage is set by the government, and the origination cost of an HECM loan is limited to 2% of the value of your home, the total cost of the loan can still vary by lender. Furthermore, in looking for a lender, borrowers must consider third-party closing costs, mortgage insurance, and the servicing fee. To assist borrowers in comparing mortgage costs, the federal 'truth-in-lending law' requires mortgage providers to present borrowers with a cost disclosure in the form of the total annual loan cost (TALC). Do be sure to use this number when comparing loans from different vendors; just keep in mind that the actual costs of a reverse mortgage will depend largely on the income options selected.