![]() ![]() You can withdraw a bit more if you have an existing mortgage, or other liens on the property, that exceed the 60 percent limit. If you are eligible for a $100,000 loan, for example, you can take $60,000, or 60 percent of that sum. There is a limit on the amount of funds you can access during the initial year. The older you are, the more proceeds you may receive. The amount of funds that a person is eligible for depends on his age (or, in the case of couples the age of the younger spouse), the value of the home, the interest rate and upfront costs. You cannot lose your home under normal circumstances, but please understand foreclosure may occur if you do not pay your taxes and insurance, maintain the home, and otherwise comply with the loan terms. With a reverse mortgage, you retain title or ownership of the home. Property Condition: You are responsible for completing mandatory repairs and maintaining the condition of the property.Ĭonveyance of the mortgaged property by will or operation of law to the estate or heir after mortgagor's death: When a reverse mortgage becomes due and payable as a result of the borrower's death and the property is conveyed by will or operation of law to the estate or heirs (including a surviving spouse who is not on title and therefore not obligated on the HECM note) that party (or parties if multiple heirs) may satisfy the HECM debt by paying the lesser of the mortgage balance or 95% of the current appraised value of the property. Taxes and Insurance: You must remain current on your real estate taxes, homeowners insurance, and other mandatory obligations, including condominium fees, or you are susceptible to default. Vacation homes and investor properties do not qualify. Occupancy requirements: The property used as collateral for the reverse mortgage must be the primary residence. Any existing mortgage must be paid off using the proceeds from the reverse mortgage. Primary lien: A reverse mortgage must be the primary lien on the home. As long as you live in the home, you are not required to make any monthly mortgage payments towards the loan balance, but you must remain current on your property taxes, homeowners insurance and condominium fees and other maintenance costs and otherwise comply with the reverse mortgage loan terms.īorrower Requirements and ResponsibilitiesĪge qualification: All borrowers listed on title must be 62 years old. Generally, you are not required to pay back the loan until the home is sold or otherwise vacated. Instead of making monthly payments to a lender, as with a traditional mortgage, the lender makes payments to the borrower. The loan is called a reverse mortgage because the traditional mortgage payback stream is reversed. However, there is no restriction for how reverse mortgage proceeds can be used. The product was conceived as a means to help retirees with limited income use the accumulated wealth in their homes to cover basic monthly living expenses and pay for health care. FY 2023, for instance, began October 1, 2022, and ends September 30, 2023).A reverse mortgage is loan available to homeowners who are 62 years or older that enables them to convert part of the equity in their home into cash. HUD provides data by federal fiscal year (each federal fiscal year begins October 1 and runs through September 30 of the following year. HECMs account for nearly all reverse mortgages made today in the U.S.įollowing are the number of HECMs made in each federal fiscal year since the program began. ![]() Department of Housing and Urban Development (HUD). It is insured by the Federal Housing Administration (FHA), a branch of the U.S. The Home Equity Conversion Mortgage, or HECM (pronounced HEKUM), is the federally insured reverse mortgage product.
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