Terry Edwards asked:




Are you considering an FHA reverse mortgage loan on your home? While there are many advantages to these types of loans, there are also some things you must know before moving forward with this loan.

FHA stands for the Federal Housing Administration, which is a branch within the United States Department of Housing and Urban Development (HUD). In order to qualify for this mortgage program, their are certain requirements the FHA has set. One of those is that the homeowner must be at least 62 years of age, or older. The FHA also provides insurance which makes the loan program less expensive for the borrowers then similar reverse mortgage programs offered by private lenders and smaller institutions.

The only other requirement the FHA ask of you, other than being 62 years of age or older, is that you have equity in your home and little debt or mortgage against it. There is no other restrictions, required credit ratings, level of income or any other assets needed. If you are approved for an FHA reverse mortgage loan you can receive your loan in one of three options. You can take it all in one lump payment, in monthly installments for a fixed term, or indefinite term as a line of credit against the loan.

An FHA loan is paid off either when the homeowner passes away, moves out of the home, or sells the property. Then, HUD collects the proceeds from the sales. If those proceeds exceed the loan, then the difference is either awarded to the homeowner, if he is alive, or to the homeowner’s heirs. If the proceeds do not cover the amount of the loan, then HUD covers the difference.

The main benefit of these loans are that the homeowner is not required to make monthly payments against the loan. That is why they call it a reverse mortgage — because instead of you having to make payments each month, the leading institution is making payments to you — whether monthly, in one lump sum, or when you use it as a line of credit.

The way the amount of the loan is calculated has to do with the value of your home, the interest rates, the location of your home, as well as your age. These are some of major aspects of an FHA reverse mortgage to keep in mind.

Bradley

Juhani Tontti asked:




The reverse mortgage loan is a long term solution. Many seniors seem to think, that when they postpone the financial decisions, the time will handle the issue. Unfortunately,. The time just worsens the things and the only wise thing is to make the decision now. And, the reverse mortgage loan is just one option.

1. It Is Important To Act Quickly.

The limit is 3 months. If a senior is 3 months, or more, behind with his mortgage payments, it is important to act quickly. The first thing is to contact the lender and to tell him honestly, what is your situation and whether he has some tips, what to do. You can also ask, whether the reverse mortgage loan would be useful in your situation.

Most obviously a senior needs more disposable money to be able to handle all the monthly costs. When he has an old mortgage left, which he has to pay monthly, the reverse mortgage loan can handle two things. A senior can pay away the old mortgage with the reverse loan, which gives him more disposable money. Exactly, what he needs. The reverse loan has no monthly payments.

2. The Importance Of The Good Credit Score.

The credit score is like a good health. When it is okay, you will not even notice it, but when you have lost it, it causes many troubles. The bad credit score makes the borrowing more expensive or even impossible. If a senior meets the foreclosure, his credit score will drop by 250 – 300 points for 10 years. And he will lose the home.

3. How The Reverse Home Mortgage Will Help A Senior?

The best feature of this loan type is, that the lender will pay to the senior. A senior has to have a home, where he has an equity left, which is his permanent home. The age must be 62 or over.

By taking the reverse loan, he transfers a part of the home equity into cash money. This means extra disposable money every month. On the top of this, he can pay away the traditional mortgage with the reverse one, which further adds his disposable monthly cash. The new loan capital, interests and all costs will be paid, when the loan will be closed. This happens, when the borrower will move away, sell the home or die.

4. How The Loan Amount Is Calculated?

There is a maximum limit of $ 625.000. The age of the borrower, the interest rate level and the appraised value of the home are the 3 factors, which influence on the loan amount. The thumb rule is, that the older the borrower is, the higher the appraised home value and the lower the interest rates, the more a senior can borrow.

5. This Is A Must: A Senior Has To Meet The Counselor.

Before a senior can sign the reverse mortgage loan contract he has to meet the counselor, says the law. This is very good, because the counselors are free to guide also concerning other options and they are not salespeople. A senior makes it wise, if he will prepare well for this meeting, because it can be honestly useful.

Leslie

MONIA M asked:


Is there any law when the heirs of a home with a reverse mortgage loan don’t let the lenders know borrower died and continue to receive the monthy payments and live in the house.what is the punishment

Cheryl