What is a reverse mortgage?
Reverse Mortgage by definition: FHA’s Reverse Mortgage is a special type of home loan that allows a homeowner to convert a portion of equity into cash. The equity built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence*. HUD’s reverse mortgage provides these benefits, and it is federally-insured (FHA) as well. Our team has extensive local experience processing and originating Reverse Mortgages. Please contact Covenant Reverse Mortgage for any information you need on pros and cons, purchase a home with Reverse Mortgage, age requirements, or anything else on the federally insured Reverse Mortgage program.
*moving away, selling the home, long term care are all types of non-use. Let’s discuss your specific matter and get an answer.
How can I use the money I receive from a reverse mortgage?
There is no restriction on how the proceeds from a reverse mortgage can be used. The money you receive at closing is YOUR MONEY. You can use it to pay other debts, repair your home, meet family needs, take a vacation, buy a new car . . . or two!! You decide.
How can I qualify for a reverse mortgage?
To qualify for a reverse mortgage a borrower must be at least 62 years old (and in some cases based on the product chosen as young as 55!), subject property must be your principle residence and have adequate equity. A lender will also complete a financial assessment of the borrower. You must be able to pay your property taxes and insurance and show that you can do so with your current income.
Will my home qualify for a reverse mortgage?
Single-family homes, 2-4 unit properties (one unit occupied by owner), FHA-approved manufactured homes, HUD approved condominiums, and townhomes are eligible for a reverse mortgage. If your home needs repairs you can set up a repair set-aside if desired to complete the project. FHA requires that the home be structurally sound. The appraiser will review the home and note any repairs in his/her report. Once noted we can work on getting the repairs done or on setting aside funds for that purpose.
How much money can I get from a reverse mortgage?
The amount will vary borrower to borrower and is based on a few factors including age of the youngest borrower, current interest rates, value of your home, and how much you may owe on an existing mortgage. The higher the appraised value of the home the more funds you will have to work with in the Reverse Mortgage.