Posts tagged with 'Mortgage Balance'

Reverse Mortgages For Seniors

  • Posted on November 8, 2010 at 9:17 am

Reverse mortgage has become popular in America these days, these are special type of mortgage that helps an homeowner to convert his home equity into cash, this boost up the American older financial security by helping them to meet unexpected medical expenses, home improvement and many more.

The homeowners should be 62 years and older who has already settled any mortgage they have already got it or has remaining small amount of mortgage balance are the eligible people to take up this Reverse mortgage by HUDs.

Homeowners would be able to receive the payment in a lump sum or can receive on monthly basis for a fixed period of time or as long as they live in the house, this mortgage can be changed according to the circumstances of the homeowners, unlike other mortgages the HUDs reverse mortgage for seniors do not require repayments from the borrowers as long as they live in that home, the lender will recover the principal amount along with the interest at the time of the house being sold out, and the balance amount will be paid to the house owner or her or his survivors, incase the amount received by selling the house is not sufficient to pay the amount that has been borrowed , HUD will take up the responsibility to pay the shortage amount to the lender. The Federal Housing Administrations that is a part of HUD is responsible to collect the insurance premium from the borrowers for providing the coverage.

The amount of reverse mortgage for seniors will be decided based on the age, interest rate and the value of the house of the borrower, in this type of mortgage the older the borrower the greater the amount that is lent. For instance based on todays rate of interest 9% approximately a 65 yrs old person can borrow 26% of the value of his home and 75 yrs old person could get 39% of the value of the home and 85 yrs old man get 56% of the value of the home.

To get this reverse mortgage from the HUD you need not present any income proof or show any kind of asset, and there is also no limitation for the value of the homes that is being qualified under HUDs reverse mortgage. The home owners are charged 2% of the value of the home as up front fees plus one half percent of the balance loan amount every year and this amount can be usually paid by the lender and further charged in the principal amount borrowed by the home owner.

Reverse Annuity Mortgage

  • Posted on June 21, 2010 at 9:17 am

Reverse annuity mortgages (RAM) were created to allow senior Americans to tap into the equity of their paid for or nearly paid for home. Homeowners receive a tax-free payment each month, with the mortgage paid out and when the home is sold. Before you choose a RAM, make sure you have evaluated the risks since this option can limit future housing plans.

Types Of Reverse Mortgages

RAM programs are developed by HUD.To be eligible you must be 62 or older, use the property as your residence, and have paid off your mortgage in full. The fed government will then insure your mortgage.

You might want to talk to private lenders as an option. You will want to review their terms and conditions very carefully to be sure that you are getting the full value of your home and not paying unnecessary and exhorbitant fees.

Both types of RAM will never let you owe more than what your home is worth. When you decide to move out of the property, the loans principal, interest, and fees will be due and any equity remaining from the sale of your home will be yours or can be based onto heirs.

Difference Between A Reverse Mortgage and A Home Equity Loan

The major difference between a RAM and a home equity loan is when the loan balance is due. With a RAM, the mortgage balance will need to be fully paid once you stop living in the property. You dont have the monthly payments of an equity loan and it is much easier to qualify for the mortgage since you dont have to show any prove of income to make monthly payments.

Payouts Options

There are several payout options that you can choose from. A ‘tenure policy’ provides equal monthly payments to the borrower as long as he or she lives on the property itself. A “term policy’ gives fixed monthly payments for a set period of time. A line of credit enable the borrower to withdraw funds only when needed. A modified tenure combines a line of credit with life long monthly payments while a modified term provides a line of credit with fixed monthly payments.

Beware Of Scams

There are several scams related to reverse mortgages that you should be aware of. You should not pay thousands for information about a RAM and should get them from HUD and legitimate mortgage lenders. You should also avoid any terms that require payments before you sell or that sell your house within so many years.

Hud Reverse Mortgage : Who is eligible?

  • Posted on May 3, 2010 at 9:17 am

When looking for additional funds for retirement, seniors can turn to a financial tool called HUD reverse mortgages. Seniors can have access to their equity from their homes without the worries of making monthly repayments.

In order to be eligible for a HUD reverse mortgage, there are a few basic requirements to fulfill. Homeowners must meet the following criteria in order to be eligible for a HUD reverse mortgage:

1.) The home must be a principal residence.

2.) Homeowner must be age 62 or older.

3.) The home must be owned free and clear or have a mortgage balance that can be paid from equity.

4.) The property must be a single-family home, a one-to-four unit dwelling with one unit occupied by the applicant, a manufactured home (mobile home), or a unit in condominiums or Planned Unit Developments.

5.) The property must meet minimum property standards.

Homeowners that qualify can receive payments in a lump sum, on a monthly basis, or on an occasional basis as a line of credit. At a later date the payment options can be restructured if circumstances change.

The amount that can be borrowed on a HUD reverse mortgages is determined by the borrowers age which in any case the older the borrower the more that can be borrowed against the value of the home and the lower the interest rate the more that can be borrowed.

There is no hard limit for home value to qualify for a HUD reverse mortgage, but the amount that may be borrowed is capped by the maximum FHA mortgage limits for an area. This means that owners of a high priced home can’t borrow any more than the owners of homes valued at the FHA limit. There are no asset or income limitations on borrowers receiving a HUD reverse mortgage.

Unlike ordinary home loans, a HUD reverse mortgage does not require repayment as long as the home remains the borrowers primary residence. When the home is sold the Mortgage company recovers their principal, plus interest, and the remaining value of the home goes to the homeowner or to his or her survivors. Should the sales proceeds not cover the amount owed, HUD will pay the mortgage company for any shortfall.

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