Reverse mortgages put a spin on the classic mortgage. Instead of paying monthly payments to the lender, roles are switched, and the lender now pays the borrower. It may sound a bit upside-down but there are rhyme and reason to the practice. 

HUD’s reverse mortgage is one of the most popular reverse mortgages on the market. It’s a federally-insured private loan that’s typically utilized by older Americans that are cash-strapped. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements, etc. Since your home is probably your largest single investment it’s smart to learn more about reverse mortgages and decide if it’s right for you.

  1. What Is A Reverse Mortgage?

A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments will be put back into your bank account. Unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower no longer uses the home as their principal residence, dies, or sells the home. 

  1. How Do I Qualify For A HUD Reverse Mortgage?

To be eligible for a HUD reverse mortgage, HUD’s Federal Housing Administration (FHA) requires that the borrower is a homeowner, 62 years of age or older, own their home outright, or has a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan, and must live in the home that is being mortgaged.

  1. Can I apply If I Didn’t Buy My House With FHA Mortgage Insurance?

As long as your home satisfies the HUD minimum property standards it doesn’t matter if you didn’t buy it with an FHA-insured mortgage. 

  1. What Types Of Homes Are Eligible?

Your home must be a single family dwelling or a two-to-four unit property that you own and occupy. Townhouses, detached homes, units in condominiums and some manufactured homes are also eligible for such a mortgage with condos in need of FHA approval.

  1. Can A Lender Take My Home Away If I Outlive The Loan?

You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current. You can never owe more than your home’s value.

  1. Will I Still Have An Estate That I Can Leave My Heirs?

The loan must be paid back when the home is no longer being used as the primary residence or after the home has been sold. Should any equity remain in the home it can be passed down to your heirs. None of your other assets will be affected by HUD’s reverse mortgage loan. This debt will never be passed along to the estate or heirs.

  1. How Much Money Can I Get From My Home?

The amount you can borrow depends on your age, the current interest rate, other loan fees and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less. Generally speaking an elderly person with a highly valuable home will be able to borrow more money at a lower interest rate than a borrower at the opposite end of the age and house value spectrums. 

  1. How Can I Receive Payments?

There are five available payment 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.

To discuss more in-depth what reverse mortgage options are available for to, consult the Bismarck mortgage lenders, Affiliated Mortgage. Affiliated Mortgage is a home lender that will use its more than 30 years of experience to help you secure the right loan for you and your family.

Reverse mortgages put a spin on the classic mortgage. Instead of paying monthly payments to the lender, roles are switched, and the lender now pays the borrower. It may sound a bit upside-down but there are rhyme and reason to the practice. 

HUD’s reverse mortgage is one of the most popular reverse mortgages on the market. It’s a federally-insured private loan that’s typically utilized by older Americans that are cash-strapped. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements, etc. Since your home is probably your largest single investment it’s smart to learn more about reverse mortgages and decide if it’s right for you.

  1. What Is A Reverse Mortgage?

A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments will be put back into your bank account. Unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower no longer uses the home as their principal residence, dies, or sells the home. 

  1. How Do I Qualify For A HUD Reverse Mortgage?

To be eligible for a HUD reverse mortgage, HUD’s Federal Housing Administration (FHA) requires that the borrower is a homeowner, 62 years of age or older, own their home outright, or has a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan, and must live in the home that is being mortgaged.

  1. Can I apply If I Didn’t Buy My House With FHA Mortgage Insurance?

As long as your home satisfies the HUD minimum property standards it doesn’t matter if you didn’t buy it with an FHA-insured mortgage. 

  1. What Types Of Homes Are Eligible?

Your home must be a single family dwelling or a two-to-four unit property that you own and occupy. Townhouses, detached homes, units in condominiums and some manufactured homes are also eligible for such a mortgage with condos in need of FHA approval.

  1. Can A Lender Take My Home Away If I Outlive The Loan?

You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current. You can never owe more than your home’s value.

  1. Will I Still Have An Estate That I Can Leave My Heirs?

The loan must be paid back when the home is no longer being used as the primary residence or after the home has been sold. Should any equity remain in the home it can be passed down to your heirs. None of your other assets will be affected by HUD’s reverse mortgage loan. This debt will never be passed along to the estate or heirs.

  1. How Much Money Can I Get From My Home?

The amount you can borrow depends on your age, the current interest rate, other loan fees and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less. Generally speaking an elderly person with a highly valuable home will be able to borrow more money at a lower interest rate than a borrower at the opposite end of the age and house value spectrums. 

  1. How Can I Receive Payments?

There are five available payment 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.

To discuss more in-depth what reverse mortgage options are available for to, consult the Bismarck mortgage lenders, Affiliated Mortgage. Affiliated Mortgage is a home lender that will use its more than 30 years of experience to help you secure the right loan for you and your family.

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