After retirement, you may not be able to earn a stable income, and you may struggle with your family finances. As a homeowner, Reversing Her Mortgage is her one option for solving her financial problems.
What is a reverse mortgage?
A reverse mortgage is a mortgage that allows homeowners over the age of 62 to withdraw a portion of the mortgage. residential property and cash. You don’t have to pay taxes on your earnings or make monthly mortgage payments.
How to use a reverse mortgage
You can use your reverse mortgage proceeds any way you like. It is often allocated to expenses such as:
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Helping Children Go to College
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Buy another home that better suits your needs as you get older
Advantages and disadvantages of a reverse mortgage
Your heirs don’t have to repay the loan |
Fees cost thousands of dollars |
Loans give you financial headroom |
Loans reduce your home equity |
Eligible Surviving Spouse Can Stay Home |
You could lose your home if you don’t pay property taxes and insurance |
How do reverse mortgages work?
A reverse mortgage is the opposite of a traditional mortgage. Instead of paying monthly payments to your lender every month, your lender will pay you. You will have to pay property taxes, homeowners insurance, and other related costs. Otherwise, you risk foreclosure.
The amount you receive on a reverse mortgage is based on a sliding scale of life expectancy. The older you are, the more home equity you can extract.
Two types of reverse mortgages
The Federal Housing Administration insures two types of reverse mortgages: floating rate and fixed rate.
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A fixed rate reverse mortgage consists of a one-time lump sum payment.
2. Adjustable has five payment options.
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Term: Set up monthly payments for as long as you or your eligible spouse are home
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semester: Set up monthly payments for a fixed period
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Credit limit: Unspecified payments when needed until funds are exhausted
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Changed tenure: Credit line and set monthly payments as long as you or your eligible spouse live in the home
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Terminology changed: Selected fixed term line of credit and set monthly payments
Am I eligible for a reverse mortgage?
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You and/or an eligible spouse — who must be named as such on the loan even if you are not a co-borrower — live in the home as your primary residence
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No federal debt in arrears
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You own your home outright or have a significant amount of equity
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Attend a mandatory counseling session with a Home Equity Conversion Mortgage (HECM) Counselor approved by the Department of Housing and Urban Development.
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Your home meets all FHA property standards and flood requirements
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As long as you live in the house, you will continue to pay all property taxes, homeowners insurance, and other home maintenance costs.
What else you should know
Before issuing a reverse mortgage, the lender will review your credit history, match your monthly income with your monthly debt, and request a home appraisal.
The Consumer Financial Protection Bureau recommends waiting until you’re older to get a reverse mortgage.
Almost all reverse mortgages are issued as Home Equity Conversion Mortgages (HECMs) insured by the Federal Housing Administration. HECM comes with strict borrowing guidelines, loan limit.
If you think a reverse mortgage is right for you, HECM Counselor Or call us toll-free at 800-569-4287 to learn more about this funding option. If you decide to apply for a reverse mortgage, FHA Approved Lender.