Finding straight answers to your many questions can be daunting. In fact, you are probably here because you would like to know how does reverse mortgage works and how a reverse mortgage is repaid.
Because you are searching for answers to make an informed financial decision, it is very important that you get the facts that can make your life easier. Why don’t you take the time to read the information in this weblog entry?
What is a reverse mortgage?
A reverse mortgage is a special type of loan which enable an individual aged 62 or over to convert some of his or her home’s equity into tax-free funds. Most importantly, no income, employment or credit requirements are required.
Unlike traditional equity loans, you receive payments instead of making them.
Who is eligible?
If a home owner meets the following requirements, he or she is eligible to receive payments:
A home owner must be at least 62 years of age and occupy the property as their principal residence.
He or she must own an eligible property: a single-family home, a condominium, a townhouse, or a 2- to 4-unit dwelling.
The home must be owned free and clear or have an existing balance that can be paid off with the reverse mortgage proceeds.
How much can a home owner borrow?
The amount that can be borrowed is based on a HUD formula that factors in the age of the youngest homeowner, the interest rate, the lesser of the appraised home value, the FHA lending limit, and the amount of any existing liens on the home.
What are some of the benefits of a reverse mortgage
- The reverse mortgage customer retains ownership and live in their home, as long as all program requirements are met.
- Loan proceeds can be used for any purpose including eliminating an existing mortgage, meeting daily and monthly expenses, or covering health care expenses.
- Loans proceeds are not considered income and will not affect Social or Medicare benefits.
What type of interest rate options are available?
Both fixed- and variable-rate reverse mortgage options are available to ALL qualified home owners.
What are tax-free distribution options?
- Lump sum advances make funds immediately available to eligible home owners.
- Tenure plans provide fixed, monthly payments.
- Line of credit makes funds available upon request.
- Or any combination of the above options.
What costs are involved with a reverse mortgage?
The costs involved with a reverse mortgage includes, but not limited to, the following:
- A deposit for the appraisal
- An origination fee
- Title insurance
- A mortgage insurance premium
- Attorney fees.
How is the reverse mortgage repaid?
You do not need to repay the loan as long as you or one of the borrowers continues to live in the house, keep the taxes and insurance current, and maintain the property to FHA standards. The reverse mortgage agent with whom you are working will supply you with the details about when repayment may be due.
Frequently Asked Questions
How many unanswered questions do you have?
- What is a reverse mortgage?
- How is a reverse mortgage repaid?
- How does reverse mortgage work?
- Should you get a reverse mortgage?
- How does a reverse mortagage work?
- Reverse mortgage rules?
- Information of a reverse mortgage?
- What can you use reverse mortgage for?
- What is the way a reverse mortgage works after someone dies?
- What about the other people who still living in the house?
If you would like to as more questions without obligation, feel free to contact a HUD-approved agent at www.WellsFargo.com/Mortgage.
A friendly agent is awaiting to help you apply for reverse mortgage loan. Click on the www.WellsFargo.com/Mortgage link to get the answers you deserve to help you make the right decision based on your situation.
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NOTICE: Please consult an tax advisor. Reverse mortgage borrowers are required to obtain an eligibility certificate. To get one, a HUD-approved agency must counsel you to assist you in making the right decision.
Family members and financial advisors are strongly encouraged to participate in these informative sessions.
Loan proceeds are not considered income and will not affect Social Security or Medicare benefits. Your reverse mortgage proceeds may affect your eligibility for other programs. Consult a local program office or your attorney to determine how, or if, monthly reverse mortgage payments might affect your specific situation.
Disclosure: This Weblog entry is sponsored by Reverse Mortgage