Difference vs. A Conventional Loan
Qualifying For A Reverse Mortgage
How Safe Is The FHA Reverse Mortgage?
What Are The Costs Of A Reverse Mortgage?
What Is The Difference vs. A Conventional Loan?
- No income requirements to qualify
- Credit history is not a factor
- Does not require
repayment until:
- Borrower(s) move
- Borrower(s) sell
- Borrower(s) pass away
- Other assets are not considered
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Qualifying For A Reverse Mortgage
- All individuals on title must be 62 or older
- Home must be a 1-4 family residence
- Most condominiums & PUD’s qualify
- Any existing mortgage loans must be satisfied
- Manufactured homes are accepted on an approved FHA foundation
- Mandatory free counseling session by HUD approved housing counselor
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Accessing
Your Equity
Benefits are calculated by:
- The lesser of the appraised value of your home or the maximum lending limit
- The age of the youngest borrower
- Current interest rates
- No restrictions in most states on how funds are used
- Reverse mortgage proceeds are non-taxable
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How Safe Is The FHA Reverse Mortgage?
- FHA administers the Home Equity Conversion Mortgage (HECM) program and guarantees that borrowers receive their requested loan advances if the lender defaults
- You or your heirs
will never owe more than your house is worth
Interest may be tax deductible when the loan matures - FHA’s toll free phone # 1.800.245.2691
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Four plans are available to you*
- Term option
- Tenure or lump sum option
- Combination of above
- Line of credit (not available in Texas)*
- You can change the plan at any time during the life of the loan
* Not all options available in all states
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What Are The Costs Of A Reverse Mortgage?
- The typical loan costs of a reverse mortgage include up-front & financed costs similar to a conventional mortgage:
- Appraisal, title insurance, origination fee, FHA mortgage insurance, recording fees, as well as other typical and customary closing costs
- An itemized estimate of closing costs will be provided to you
- All closing costs can be funded through the loan
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- Initial interest rate is based on the weekly average yield of U.S. Treasury securities adjusted to a constant maturity of one year plus a margin (T-Bill)
- Annually adjustable plan
- Monthly adjustable plan
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- Home must meet FHA standards
- Termite report is usually required
- Most home repairs can be funded through the loan
- In some instances, well and septic tank tests may be required
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- Keep property taxes current
- Maintain homeowner’s insurance
- Maintain property in good condition
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- No repayment necessary until you move, sell or pass away
- No penalty for early payment
- This is a non-recourse loan
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