reverse mortgages

info@fairwaymortgage.net

Reverse Mortgage:

What is a reverse mortgage?

A reverse mortgage is a special type of loan used by older Americans to convert the equity in their homes into cash. The money from a reverse mortgage can provide seniors with the financial security they need to fully enjoy their retirement years.

A reverse mortgage enables homeowners (62 plus) to convert part of the equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. The payment stream is “reversed.” Instead of making monthly payments to a lender, like a regular mortgage, a lender makes payments to you.

Eligible properties: single-family homes, manufactured homes built after June 1976, qualified condominiums, and townhouses.

The funds from a reverse mortgage can be used for anything, such as:

living expenses
home repairs
health care expenses
prescription drugs or in-home care
pay-off of existing debts
better lifestyle
other needs

There are no income or medical requirements to qualify. You may be eligible for a reverse mortgage even if you still owe money on a first or second mortgage.

Reverse Mortgages are HUD insured programs and we are a HUD approved lender.

Payment Options

You can choose how to receive the money from a reverse mortgage. The options are:

one lump sum;
fixed monthly payments;
a line of credit;
or a combination of these.

The amount of money you get from a reverse mortgage depends on several factors, including age, type of reverse mortgage selected, appraised home value, current interest rates, and where you live. In general, the older you are and the more valuable your home (and the less you owe on your home), the more money you can get.

The funds from a reverse mortgage are tax-free; it's your money, not additional income. A reverse mortgage does not affect regular Social Security or Medicare benefits.

Paying Back Your Loan

No monthly payments are due on a reverse mortgage while it is outstanding. The loan is repaid when you cease to occupy your home as a principal residence, whether you (the last remaining spouse, in cases of couples) pass away, sell the home, or permanently move out.

The amount owed can never exceed the value of your home. If the home is sold and the sales proceeds exceed the amount owed on the reverse mortgage, the excess money goes to you or your estate.

Types of Reverse Mortgages

Home Equity Conversion Mortgage (HECM)
The Home Equity Conversion Mortgage (HECM) is the oldest and most popular reverse mortgage product. Available since 1989 to homeowners 62 or older, HECMs are insured by the federal government through the Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development.
Fannie Mae Home Keeper & Home Keeper for Home Purchase
In 1996, Fannie Mae developed its own proprietary Home Keeper® reverse mortgage to supplement the federally insured Home Equity Conversion Mortgage.

Reverse Mortgage Costs

Many of the same costs to obtain a home purchase loan, or to refinance your existing mortgage, apply to reverse mortgages. You can expect to be charged an origination fee, up-front mortgage insurance premium for the FHA Home Equity Conversion Mortgage or HECM, an appraisal fee, and certain other standard closing costs.

In most cases, these costs may be financed as part of the reverse mortgage.

Fairway Mortgage, a HUD approved lender, can help you with the variety of reverse mortgages available to choose from. Call us at (708) 389-1188 today to see which best fits your individual needs.