Many TV viewers, readers, and radio listeners hear and see many ads that sound like this is a dream come true. According to most ads, it sounds very enticing and dream like. Make sure these are not frauds. The truth is the government regulates these loans. Regulation is done and very well by the Department of Housing and Urban Development.
Along with this thought sometimes, the information is misleading about these reverse mortgages. Here may lay the fraud. These so-called "experts" are not associated with the federally regulated loans. Seniors beware.
The reverse mortgage proceeds, federally funded are very beneficial. Many of the benefits include real estate planning, life insurance purchases, and long-term care just to name a few. Check out websites, ask questions. Additionally, The National Reverse Mortgage Lenders Associate has great booklets for consumers.
What is Reverse Mortgage
You regain the equity you have in your home as a credit line, payments monthly, or a lump sum of cash. You never need to repay the reverse mortgage as long as you live in the home. Your existing mortgage (if you have one) will be fully paid off. The payments are tax-free and can be spent however, you like with no impact on Social Security or Medicare benefits.
Who is Eligible
Age, must be age 62 or older. It is recommended that you have paid off 40% or more of your mortgage. You should be planning to stay in your home for at least several years. Finally, there are no income or credit requirements.
What are the Costs
Very rarely have out-of-pocket expenses because of usually lower interest rates. The cost of a FHA HUD reverse mortgage (HECM) is significantly lower than buying and moving to a new home. The cost of a FHA HUD reverse mortgage (HECM) is considerably lower than buying and moving to a new home. Interest rates are usually lower than the best rates on a usual mortgage.
Who is Liable for the Estate
Since it is secured, your heirs are never personally liable for the reverse mortgage. The heirs have to option to refinance with a regular mortgage or sell the property.
How is the Reverse Mortgage Repaid
You owe nothing as long as one homeowner lives in your home. In addition, the FHA mortgage insurance ensures that you can never owe more than the sale-price of your home, even if the home depreciates. There is no repayment as long as one of the homeowners lives in your home. The FHA (Federal Housing Authority) ensures that you will never owe more that the sale price of your home. This is even when and if the home depreciates. To repay the loan when you move out of the home, your estate has up to 12 months to repay. As far as the loan balance, if the home sells more than the amount loaned that amount is handed down to your heirs.
