Hecm Home Reverse Mortgage! The 5 Things To Know Before You Go On
Many American seniors use the reverse home mortgage loans to supplement their social securities
, to meet unexpected medical expenses, to buy a home for their children, to make home improvements, to travel or just to get some extra money.
1. What Are The Reverse Home Mortgage Loans.
You can think in this way. You have paid for years for your normal mortgage loan and your home is fully paid or at least almost. Today your family relations have changed, children have moved and you live alone or with your spouse. Usually your income have also dropped and you may have some extra expenses, like medicine costs.
You are maybe living in a house, which is too big for your purposes, but you are unwilling to move, because all your friends and memories are linked with your home. What to do? The reverse mortgage loans offer great help. You can take cash against your home without paying anything back every month.
2. Who Can Qualify?
One of the great ideas of the reverse mortgage loans is, that the qualification has been done easy. When the loan will be taken against the equity of your home, the only thing you must have is the home, which has equity left and that you are American of age at least 62. Your monthly income, or income in general, has no meaning, nor your other assets.
3. What Home Types Are Eligible?
HECM approves either a single family home or a home of 1-4 unit, which has one unit occupied to the borrower. The manufactured homes and condominiums, if they are HUD approved, are eligible also. You can make sure, that your home fulfils these requirements, before you go on.
4. What Are The Differences Between The Normal Loans And The Reverse Mortgage Loans?
Well, actually before you can get a usual mortgage loan, you must have a certain monthly income compared with the loan sum and you must pay the loan back every month. The reverse mortgage loans work in reverse. The lender pays to the borrower.
The borrower will pay anything back until the loan will be closed down. Then all the costs, interests and the loan capital will be paid back. If the selling price of your home does not cover the expenses, the compulsory mortgage insurance will be used, so you will never owe more than the price of your home.
The maximum amount, which you can get depends on your age, interest rates and the appraised value of your home or the limits, which FHA has for the area, where you live. We can say, that the older you are, the lower is the interest rate and the more valuable your home is, the more you can borrow.
5. Can The Lender Take My Home, If I Do Not Pay?
As long as you pay your home insurances and taxes plus keep the home in a good condition, the lender can never take your home.
As said above, in the case that you are not able to pay the expenses, the mortgage insurance will take care of them. You will never owe more than the value of your home.
by: Juhani Tontti
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