For many retirees, equity build up of their home is their only real asset. Reverse mortgage enables Americans to tap into this asset and create a stream of income needed for retirement or health purposes.

Reverse mortgage is not akin to a refinance, equity loan or a second loan on your home. Understand the differences to avoid becoming a victim of the downsides associated with the loan. 

Reverse Mortgage Explained

A reverse mortgage reverses the flow of money. In a seemingly nonsensical fashion, the homeowner now receives money from the lender rather than paying the lender. 

Why Would A Lender Reverse A Mortgage?

Despite sounding like a charitable act, lenders will eventually make up the money they lent. 

Lenders calculate the amount they lent based on the value of your home, projected appreciation, your age and a number of other factors. When a homeowner moves or dies, the lender will then collect the money borrowed plus interest. 

HECM Loans 

Federally-insured home equity conversion mortgage (HECM) is the most common reverse mortgage loan in the US. The U.S. Department of Housing and Urban Development started offering these loans in 1989. 

Federal Insurance

Federally insured reverse mortgages provide a certain level of security to such loans. Insurance is taken on such loans to ensure that if a lender cannot pay, the borrower will have recourse to secure its money. HECMs limits the maximum loan amount a homeowner can borrow. Keep in mind that non-HECM loans cannot be federally insured.  

Who Can Qualify?

The eligibility requirements for a reverse mortgage are as follows: 

* You are a homeowner 

* You are 62 years of age or older 

* You own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan 

* You live in the home 

* In case of HUD, you are also required to receive consumer information from HUD-approved counseling sources prior to obtaining the loan. 

* Upkeep of property taxes and staying out of bankruptcy are also required. 

Types Of Homes Eligible For Reverse Mortgage

Single family, two-to-four unit properties, townhouses, detached homes, units in condominiums and some manufactured homes are eligible. That being said, various restrictions apply to all, with the most significant being that you own them, live in them and have kept them in reasonable condition. 

What About My Heirs? 

If death occurs while you still owe money to the lender, your heirs are obligated to pay the borrowed amount, plus interest and other fees, to the lender. This is often done through the selling of the property. Whatever remains after paying the lender belongs to your heirs. The loan cannot be passed along. 

Borrowing Options

Tenure – Equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.

Term – Equal monthly payments for a fixed period of months selected. 

Line of Credit – Unscheduled payments or in installments, at times and in amounts of borrower’s choosing until the line of credit is exhausted. 

Modified Tenure – Combination of line of credit with monthly payments for as long as the borrower remains in the home. 

Modified Term – combination of line of credit with monthly payments for a fixed period of months selected by the borrower. 

Affiliated Mortgage can put an end to all your questions concerning reverse mortgages and if they’re right for you. Affiliated Mortgage is one of the best home financing companies among Wyoming mortgage lenders.

For many retirees, equity build up of their home is their only real asset. Reverse mortgage enables Americans to tap into this asset and create a stream of income needed for retirement or health purposes.

Reverse mortgage is not akin to a refinance, equity loan or a second loan on your home. Understand the differences to avoid becoming a victim of the downsides associated with the loan. 

Reverse mortgage Explained

A reverse mortgage reverses the flow of money. In a seemingly nonsensical fashion, the homeowner now receives money from the lender rather than paying the lender. 

Why Would A Lender Reverse A Mortgage?

Despite sounding like a charitable act, lenders will eventually make up the money they lent. 

Lenders calculate the amount they lent based on the value of your home, projected appreciation, your age and a number of other factors. When a homeowner moves or dies, the lender will then collect the money borrowed plus interest. 

HECM Loans 

Federally-insured home equity conversion mortgage (HECM) is the most common reverse mortgage loan in the US. The U.S. Department of Housing and Urban Development started offering these loans in 1989. 

Federal Insurance

Federally insured reverse mortgages provide a certain level of security to such loans. Insurance is taken on such loans to ensure that if a lender cannot pay, the borrower will have recourse to secure its money. HECMs limits the maximum loan amount a homeowner can borrow. Keep in mind that non-HECM loans cannot be federally insured.  

Who Can Qualify?

The eligibility requirements for a reverse mortgage are as follows: 

* You are a homeowner 

* You are 62 years of age or older 

* You own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan 

* You live in the home 

* In case of HUD, you are also required to receive consumer information from HUD-approved counseling sources prior to obtaining the loan. 

* Upkeep of property taxes and staying out of bankruptcy are also required. 

Types Of Homes Eligible For Reverse Mortgage

Single family, two-to-four unit properties, townhouses, detached homes, units in condominiums and some manufactured homes are eligible. That being said, various restrictions apply to all, with the most significant being that you own them, live in them and have kept them in reasonable condition. 

What About My Heirs? 

If death occurs while you still owe money to the lender, your heirs are obligated to pay the borrowed amount, plus interest and other fees, to the lender. This is often done through the selling of the property. Whatever remains after paying the lender belongs to your heirs. The loan cannot be passed along. 

Borrowing Options

-Tenure – Equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.

– Term – Equal monthly payments for a fixed period of months selected. 

– Line of Credit – Unscheduled payments or in installments, at times and in amounts of borrower’s choosing until the line of credit is exhausted. 

-Modified Tenure – Combination of line of credit with monthly payments for as long as the borrower remains in the home. 

-Modified Term – combination of line of credit with monthly payments for a fixed period of months selected by the borrower. 

Affiliated Mortgage can put an end to all your questions concerning reverse mortgages and if they’re right for you. Affiliated Mortgage is one of the best home financing companies among Wyoming mortgage lenders.

A Little About Affiliated Mortgage

By simplifying the mortgage process and providing clients with high quality home loans, Affiliated Mortgage strives to build unified and lasting communities. For over 30 years we’ve been supplying residents of South Dakota (Rated as top quality lenders Rapid City), North Dakota, Wisconsin, Wyoming, Colorado, and Arizona with low mortgage rates that enable them to achieve the milestone of owning or refinancing their own home.  We are headquartered in Rapid City, SD and we are the top mortgage loan provider to a variety of surrounding cities including, Ellsworth Air-force Base, Box Elder, The Black Hills, Ashland Heights, Rapid Valley, Black Hawk, Piedmont, Sturgis, Deadwood, Lead, Keystone, and Belle Fourche.  We also have a trusted presence in Sioux Falls, SDSpearfish, SD,Pierre, SD, Fargo, NDBismarck, NDCasper, WYGillette, WYCheyenne, WYDenver, CO, and Phoenix, AZ. Our trusted reputation is built on our sincere resolve to build relationships of trust, respect, and accountability. Our chief goal is to provide clients with the best loans possible so that we can welcome them into our communities. If you are looking for the best mortgage companies near you, Affiliated Mortgage is your answer.

A Little About Affiliated Mortgage

By simplifying the mortgage process and providing clients with high quality home loans, Affiliated Mortgage strives to build unified and lasting communities. For over 30 years we’ve been supplying residents of South Dakota (Rated as top quality lenders Rapid City), North Dakota, Wisconsin, Wyoming, Colorado, and Arizona with low mortgage rates that enable them to achieve the milestone of owning or refinancing their own home.  We are headquartered in Rapid City, SD and we are the top mortgage loan provider to a variety of surrounding cities including, Ellsworth Air-force Base, Box Elder, The Black Hills, Ashland Heights, Rapid Valley, Black Hawk, Piedmont, Sturgis, Deadwood, Lead, Keystone, and Belle Fourche.  We also have a trusted presence in Sioux Falls, SDSpearfish, SD,Pierre, SD, Fargo, NDBismarck, NDCasper, WYGillette, WYCheyenne, WYDenver, CO, and Phoenix, AZ. Our trusted reputation is built on our sincere resolve to build relationships of trust, respect, and accountability. Our chief goal is to provide clients with the best loans possible so that we can welcome them into our communities. If you are looking for the best mortgage companies near you, Affiliated Mortgage is your answer.

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