Unlike a more traditional ‘forward’ mortgage where you can use monthly installments to pay back, a reverse mortgage pays YOU. This kind of payment may be in regular monthly payments or a lump sum to help you supplement your income. Milton Estrada will ensure that you receive your payments in intervals that will be customized to benefit you and your lifestyle in the best way possible.
Just as long as your home is your primary place of residence and also you continue to keep up your property, pay property taxes and hazard insurance, then no repayment is needed. You can pay the money borrowed plus the interest in the event that you sell your home, move out of your home permanently or pass away.
Upon passing, your estate will then be settled in the proper traditional manner or the property will be passed on to your heirs and they can then refinance out of your reverse mortgage. If they do not want to reside in the home or property, they can sell off the unit, pay the reverse mortgage and then keep the balance of the estate money. If the amount borrowed, however, exceeds the value of the home, your heirs won’t be liable for the difference.
The amount that is due is always the lesser amount of your loan balance or it is the market value of the home. Any proceeds that are in excess of what you owe on the home will be part of your estate and may be passed down to your heirs. Your heirs will then have one year from the passing of the note holder to settle the mortgage.
To put it simply, if you’re 62 or older and outright own your home or have little outstanding on your present mortgage then you might want to think about the benefit of a reverse mortgage. Be sure to contact our mortgage advisors in order to see if a Reverse Mortgage right for you.
Reverse Mortgage Qualifying Requirements
In order to qualify for a reverse mortgage the borrower needs to be 62 years old at the least. There aren’t any credit or minimum income requirements. With most reverse mortgages, the money may be used for any purpose; the borrower, however, must pay off the existing mortgage(s) with the proceeds from the reverse mortgage and this might require additional personal fund contribution. There are some kinds of structures that do not qualify, while others might have special requirements.
Before borrowing, applicants must seek third party financial counseling session with a Department of Housing and Urban Development (HUD) approved counselor. This counseling session is a safeguard for the borrower and his/her family to make sure the borrower completely understands what a reverse mortgage is and how one is obtained. The current lending limit (the maximum the home can be appraised for, no matter how much it’s worth) is $625,500.