LOAN PROGRAM
Reverse Mortgage
Reverse mortgages are a popular option for older homeowners who need access to cash but do not want to sell their home or take out a traditional mortgage. They offer the ability to tap into home equity without making monthly payments, but they also come with higher interest rates and fees, and the potential for the loan balance to grow over time.
Loan Type:
Reverse mortgages are a type of home equity loan that allow homeowners aged 62 or older to borrow against the equity in their home.
Eligibility:
To qualify for a reverse mortgage, homeowners must own their home outright or have a significant amount of equity in it.
Loan Amount:
The loan amount for a reverse mortgage is based on the borrower’s age, the appraised value of the home, and the current interest rates.
Repayment:
Unlike traditional mortgages, reverse mortgages do not require monthly payments. Instead, the loan is repaid when the borrower sells the home, moves out of the home, or passes away.
Interest Rates:
Reverse mortgages typically have higher interest rates than traditional mortgages, due to the fact that the loan is not repaid until the borrower moves out of the home or passes away.
Fees:
Reverse mortgages may have upfront fees, such as application fees, appraisal fees, and closing costs, as well as ongoing fees, such as servicing fees and mortgage insurance premiums.
Counseling:
Before obtaining a reverse mortgage, borrowers are required to undergo counseling with a HUD-approved counselor to ensure that they fully understand the terms of the loan and the potential risks involved.