Introduction to Reverse Mortgages

A HECM (Home Equity Conversion Mortgage) is a special type of mortgage that enables homeowners age 62 or older to tap into the equity in their home. Unlike traditional home loans, no repayment of the reverse mortgage Palmdale is required until they no longer occupy the home as their principal residence.

At that time, the lender will declare the mortgage due and payable. What is borrowed plus interest is due to the lender, remaining equity remains with the estate.

 Property Guidelines

• SFR’s , 1-4 units , FHA approved condos
• All repairs must be completed by the seller prior to closing (purchase transactions)
• No properties that produce income (farms, ranches, etc.) ,No manufactured, log, dome, extreme unique , No co-ops

Reverse Mortgage Guidelines

• Must have considerable home equity or provide monetary investment at closing from allowable funding source ,Home must be primary residence. ,Repairs must be satisfied by seller.
• No credit score criteria – that means your Credit does not effect getting a reverse mortgage home loan.
• Mortgage lates are allowed / Major delinquency / NOD (3 years seasoning) /Some exceptions

When the borrowers sell their home, their estate will repay the cash you received from the reverse mortgage plus interest and other fees, to the lender. The remaining equity in the home, if any, belongs to the borrower or to their heirs.

When does the loan become due and payable?

A Reverse mortgage Palmdale loan must be repaid in full when the last remaining borrower permanently vacates the residence. The loan also becomes due and payable if:

• Borrowers did not pay property taxes or hazard insurance or violate other obligations. ,Borrowers permanently move to a new principal residence. ,The last borrower fails to live in the home for 12 months in a row.

Rate is fixed.

• Borrowers are “satisfied” with receiving funds at closing, with no option of accessing additional funds at a later date. ,Often times the closing costs are less. ,Many times this is best suited for Purchase HECM’s and instances where most available funds are allocated towards existing lien pay-off.

Benefits –No monthly mortgage payment is ever required

• Credit line growth rate
• Unused available funds grow at the same rate as the interest being charged
• Guaranteed regardless of equity position
• Borrowers should look at home equity as asset allocation
• No pre-pay penalty – make payments if you want (I/O) ,Funds are tax free
• Homeowners keep all future appreciation, no equity sharing, Borrowers retain Title to the home

We have Senior FHA Palmdale Reverse mortgage Loan Officers that have a Reverse Mortgage Palmdale and can give you hands on experience. We have you complete the required Reverse mortgage counseling course and then answer all your questions. The most important thing is to get mortgage options. Find out what a reverse mortgage is and if is best for your situation.