Reverse Mortgages, are also known as HECM – Home Equity Conversion Mortgages. This is a type of program which is done by the government in order to help seniors access the equity locked up in their home. It’s a program designed to help seniors release that equity. Below we try answering some Reverse Mortgage questions.
How can a HECM loan benefit my retirement?
For most Americans today, their home is the largest assest they own. A reverse mortgage will help you get a source of income/money during retirement. In 2010, half of homeowners age 62 or older, had at least 50% of their networth tied up in their home equity. Reverse mortgages are a form of money, that’s been locked away.
What A Reverse Mortgage Is Not?
Reverse mortgages are not a form of free money, nor is it a government grant. It is a mortgage loan, and interest is charged.
Do I need to have good credit or be working?
You don’t need to have any credit, or be working, in order to access the equity locked away in your home.
What Are The Qualifications?
In order to qualify for a reverse mortgage, the borrower must be 62 years or older. In addition, the borrower has to own the home. The home must be your primary residence. You have to have enough equity in the home for the loan. If you have no equity in the home, then you cannot get a reverse mortgage.
What Are The Property Requirements?
In order to qualify for a reverse mortgage, your property must meet FHA property standards and flood requirements. It needs to be a single family home, or a HUD approved condominium.
How Does A Reverse Mortgage Differ From A Home Equity Loan?
For normal traditional loans, there are credit score, and income, requirements. This is not true with HECM. For Home Equity Loans – there is an age requirement, once again this is not true with HECM. With the home equity loan, there is a risk of foreclosure. With HECM – there is no risk.
What Is Reverse Mortgage Counseling?
In order to get a reverse mortgage, there is a mandatory process called counseling. This is a requirement. The purpose of this session is to make sure you understand the risks of the loan, and make sure you understand the ramifications. It is done by a third party government agency, so that there is no conflict of interest.