joins The Housing Hour to discuss his role as Specialty Products Sales Managers for Mortgage Investors Group. Segment one, we discuss the growing volume of jumbo loans(loans over $417,000) in our various markets. Segment two through four we discuss the growing need and advantages of the Reverse Mortgage.
If you are a homeowner age 62 or older and have paid off your mortgage or paid down a considerable amount, and are currently living in the home, you may participate in FHA’s Home Equity Conversion Mortgage (HECM) program. The HECM is FHA’s reverse mortgage program that enables you to withdraw a portion of your home’s equity.
You can also use a reverse mortgage to purchase a primary residence if you are able to use cash on hand to pay the difference between the reverse proceeds and the sales price plus closing costs for the property you are purchasing.
How the Program Works
There are many factors to consider before deciding whether a reverse is right for you. To aid in this process, you must meet with a reverse mortgage counselor to discuss program eligibility requirements, financial implications and alternatives to obtaining a reverse mortgage and repaying the loan. Counselors will also discuss provisions for the mortgage becoming due and payable. Upon the completion of the counseling, you should be able to make an independent, informed decision of whether this product will meet your specific needs.
There are borrower and property eligibility requirements that must be met. You can use the listing below to see if you qualify. If you meet the eligibility criteria, you can contact a reverse mortgage loan officer by contacting a Mortgage Investors Group. MIG will discuss other requirements of the reverse mortgage program, such as first year payment limitations, available payment options, the loan approval process, and repayment terms.
Be 62 years of age or older
Own the property outright or paid-down a considerable amount
Occupy the property as your principal residence
Not be delinquent on any federal debt
Have financial resources to continue to make timely payment of ongoing property charges such as property taxes, insurance and Homeowner Association fees, etc.
Participate in a consumer information session given by a HUD- approved counselor
The following eligible property types must meet all FHA property standards and flood requirements:
Single family home or 2-4 unit home with one unit occupied by the borrower
HUD-approved condominium project
Manufactured home that meets FHA requirements
Income, assets, monthly living expenses, and credit history will be verified.
Timely payment of real estate taxes, hazard and flood insurance premiums will be verified
For adjustable interest rate mortgages, you can select one of the following payment plans:
Tenure – equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
Term – equal monthly payments for a fixed period of months selected.
Line of Credit – unscheduled payments or in installments, at times and in an amount of your choosing until the line of credit is exhausted.
Modified Tenure – combination of line of credit and scheduled monthly payments for as long as you remain in the home.
Modified Term – combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.
For fixed interest rate mortgages, you will receive the Single Disbursement Lump Sum payment plan.
Mortgage Amount Based On
The amount you may borrower will depend on:
Age of the youngest borrower or eligible non-borrowing spouse
Current interest rate; and
Lesser of appraised value or the reverse mortgage limit of $625,500 or the sales price
If there is more than one borrower and no eligible non-borrowing spouse, the age of the youngest borrower is used to determine the amount you can borrow.
The best place to start is by contacting a Mortgage Investors Group loan officers to discuss all the reverse mortgage advantages.