Reverse Mortgages

Reverse,Mortgage,On,Blackboard

Reverse Mortgage Basics

✓ HUD Reverse Mortgage = HECM = Home Equity Conversion Mortgage
✓ Primary Residence Only (Owner-Occupied 1 – 4 unit, Condominiums, PUD’s, and Manufactured Homes)
✓ Minimum Age = 62 (Youngest Borrower’s Age is used to determine benefit even if less than 62)
✓ Non-Borrowing Spouse (less than 62 years old) has protections (must meet qualifying attributes required by HUD to be an Eligible NBS)
✓ No Monthly (Principal & Interest) Mortgage Payment – #1 reason Seniors get a Reverse Mortgage
✓ Non-Recourse: The Borrower, nor their estate, ever owes more than the property is worth
✓ HUD Required Counseling
✓ Value of Property is called the Maximum Claim Amount
✓ The Loan Amount is called the Principal Limit (PL) and is based on Age, Value and Expected Rate
✓ Expected Rate determines Principal Limit (PL) and is currently based on 10 Year CMT Plus Margin and once loan closes, it is not used. The Interest Accrual Rate is called the Initial Rate and is currently based on the 1 Year CMT Plus the Margin
✓ On the Fixed Rate, the Note Rate serves as both the Expected Rate and the Interest Rate
✓ Borrower can get funds in one or a combination of 3 different ways on Adjustable HECM
✓ Benefits continue as long as one of the borrowers occupies the property as their Primary Residence

 

What is a Reverse Mortgage?

 

Advantages of a Reverse Mortgage

 

Reverse Mortgage Eligibility

 

Senior Safeguards

 

Work with a Qualified Reverse Mortgage Lender