![]() Private reverse mortgage lenders set their own terms, which may differ from HUD loan terms. Proprietary reverse mortgages are available exclusively through private reverse mortgage lenders. Your lender will require an appraisal of your property to determine its value before moving forward. With a HECM, the maximum amount you can borrow is $1,089,3, though the amount you'll qualify for depends on the appraised value of your home, your existing mortgage balance and other financial details. You can't combine the lump sum with any other option. A combination of the above: You can also integrate monthly term or tenure payments with a line of credit.However, the unused principal balance grows over time based on your interest rate with this option. A line of credit: You can withdraw funds as you need them.Monthly payments: You receive a monthly payment for a specific number of months (called term payments) or as long as the house is your primary residence (called tenure payments).This option is only available on fixed-rate reverse mortgages. A single lump-sum payment: You receive one large amount upfront after closing.HECMs offer several options for receiving your funds, depending on your financial needs: This service costs 2% of your loan upfront and 0.5% of your outstanding balance annually. However, you must pay a mortgage insurance premium (MIP) with a HECM. HECMs come with FHA insurance and are non-recourse loans, meaning you'll never owe more than your house sells for, even if your outstanding loan balance is larger. Your counselor will also discuss your individual needs and finances. During this session, you'll learn about the HECM program's requirements, repayment options and tax implications. It's only available through a HUD-approved lender.Įvery HECM borrower must be 62 or older and participate in a HUD-approved HECM counseling session before taking out a reverse mortgage. Department of Housing and Urban Development (HUD). The most common type of reverse mortgage is a Home Equity Conversion Mortgage (HECM), which is federally backed and regulated by the Federal Housing Administration (FHA) and the U.S. Understanding the differences between each one will help guide you to the right financial product to meet your needs. Some lenders offer multiple types of loans, each serving a unique purpose. ![]() Fixed-rate mortgages give you a set interest rate for the entire loan term, while your interest rate can fluctuate over time with an adjustable-rate reverse mortgage. ![]() Like regular mortgages, these loans can feature fixed or adjustable rates. There are three different types of reverse mortgages: Home Equity Conversion Mortgages (HECMs), proprietary reverse mortgages and single-purpose reverse mortgages. Reverse mortgages can also help reduce housing expenses (because there are no monthly payments), increase cash flow or pay for home repairs or improvements. ![]() Many older homeowners use reverse mortgages to supplement their income in retirement. Stops paying taxes and homeowners insurance.Lives outside the house for more than 12 months (unless a co-borrower or eligible spouse remains on the property).Dies (heirs are responsible for paying the loan if they wish to keep the property).The amount of money borrowed via a reverse mortgage is only due when the borrower: They can access these funds as one upfront sum, via regular monthly payments or on an as-needed basis. Hawaii Alaska Florida South Carolina Georgia Alabama North Carolina Tennessee RI Rhode Island CT Connecticut MA Massachusetts Maine NH New Hampshire VT Vermont New York NJ New Jersey DE Delaware MD Maryland West Virginia Ohio Michigan Arizona Nevada Utah Colorado New Mexico South Dakota Iowa Indiana Illinois Minnesota Wisconsin Missouri Louisiana Virginia DC Washington DC Idaho California North Dakota Washington Oregon Montana Wyoming Nebraska Kansas Oklahoma Pennsylvania Kentucky Mississippi Arkansas Texas SEE RATES What is a reverse mortgage?Ī reverse mortgage is a loan that allows seniors to borrow a portion of their home's equity.
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