Free Guide To Houston Reverse Mortgage Industry
Some frequently Asked Questions on Reverse Mortgage
1.What is reverse mortgage?
Reverse Mortgage is a new type of mortgage that can be applied to ones home. It is a non-recourse loan, which means your homes cash value is the only means of payment.
2.What is the difference of reverse mortgage with other mortgages?
Unlike in ordinary mortgages, you dont need to tender monthly payments with reverse mortgages. For as long you are staying in your home, you dont need to pay. Payment is demanded or due when you dont live anymore in your home like you passed away, sold your home, or permanently moved out.
3.Who can get one?
Factors are:
You must own your home
Must be at least 62 yrs old
Your home must be your principal residence your home for the greater part of the year (more than half year)
For federally insured Home Equity Conversion Mortgage, your home must be a single-family property, 2-4 unit or structure, or federally approved condominium.
Any existing debts against the home must be paid off first.
4.How much cash can I get on my equity?
In calculating for your probable amount, there are factors taken into account like the borrowers age, homes fair market value, current interest rates, and the maximum FHA-set amount allowable in the borrowers county.
Generally, the older the person is at the time of application, the higher the equity-to-cash ratio. If you are 76 yrs old, you can get $149,000 for a $250,000 equity. On the other hand, if you are only 62 yrs old, you can get $110,000.
Within each program, the amount of cash you can get may differ. Difference may vary by around $30,000 from one program to another.
5.How is it paid to you?
Mode of payment may be determined by borrower:
Immediate cash advance or lump sum cash paid at the first day of the loan
Credit line account you can take the cash whenever you like during the life of the loan, until the whole amount is used up
Monthly cash advance
Or a combination of the first three mentioned
6.What do you owe? How do you determine that?
The total amount at the end of the loan equals:
All cash advances received
And All interest on them
Up to the loans non-recourse limit
by: John Dorsey
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