MLP Mortgage, Refinance and FHA Loan Lending Guide » Reverse Mortgages http://www.mortgageloanplace.com/lending-guide Mortgage and Refinancing FAQ's - Your Questions Answered Fri, 17 Apr 2009 19:47:14 +0000 en hourly 1 http://wordpress.org/?v=3.0 Cancel a Reverse Mortgage http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/cancel-a-reverse-mortgage http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/cancel-a-reverse-mortgage#comments Fri, 11 May 2007 13:40:17 +0000 MLP Lending Guide http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/cancel-a-reverse-mortgage As with many loans there is a cancellation option after signing the papers for a reverse mortgage. Cancellation must occur within three business days of the mortgage closing. Cancellations must be in writing (a form is provided by your lender) and must be filed before the end of business closing on the third business day after closing the original mortgage. Loans can only be cancelled in writing and not by telephone or via a verbal confirmation.

]]> http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/cancel-a-reverse-mortgage/feed 2 Long Term Care and the Reverse Mortgage http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/long-term-care-and-the-reverse-mortgage http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/long-term-care-and-the-reverse-mortgage#comments Thu, 10 May 2007 15:42:10 +0000 MLP Lending Guide http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/long-term-care-and-the-reverse-mortgage One reason some of the mature American population chooses a reverse mortgage is to obtain money for long-term care. Long-term care is expensive and can cause undue stress to your and your family. A reverse mortgage will help alleviate some of this burden. A reverse mortgage will assist you with the costs associated with medical care, without increasing your living expenses or debt to income ratio.

The longer you have owned your home, the more equity that you have built. If you are not choosing to move, then using the equity in your home can be put toward your care. However, you may not know how much equity is available to you or that this type of loan even exists.

One factor of long-term care may involve modifying your home to fit any special needs you may have as you age. Using the equity obtained through a reverse mortgage can also help with the costly undertakings of modifying a home to fit special conditions, such as building a wheel chair ramp. This is beneficial to you as the homeowner, and also helps address areas of your home that may now be less safe to you.

As the cost of care becomes more of a concern for the aging population, it is important to utilize those resources, available to you, through the existing equity in your home.

]]> http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/long-term-care-and-the-reverse-mortgage/feed 0 Reverse Mortgage and Estate Planning http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/reverse-mortgage-and-estate-planning http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/reverse-mortgage-and-estate-planning#comments Wed, 09 May 2007 13:23:29 +0000 MLP Lending Guide http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/reverse-mortgage-and-estate-planning As you investigate the possibility of a reverse mortgage, you may wonder about your heirs should you pass before the loan is due.  It may be an uncomfortable topic to think about, but is important nonetheless.  You may wonder whether or not to include them in the planning process.  It is important to consider your current situation to decide who will be involved in the planning of your reverse mortgage.

It is important to understand that with a reverse mortgage you are using the equity in your home for many possible reasons, like long term care or debt consolidation.  By using the equity in your home, less equity is available as inheritance.  If you decide not to communicate this to your heirs, you should consider including this information in your will.

If you should pass prior to the repayment of the loan, your estate will be used to cover the repayment of the loan.  This will include the loan and any interest or other fees associated with the loan.  It is important to note that the outstanding debt will not pass to your heirs and that any left over equity will pass to your heirs.

]]> http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/reverse-mortgage-and-estate-planning/feed 2 4 Things You Need to Be Eligible for a Reverse Mortgage http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/4-things-you-need-to-be-eligible-for-a-reverse-mortgage http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/4-things-you-need-to-be-eligible-for-a-reverse-mortgage#comments Tue, 08 May 2007 14:09:43 +0000 MLP Lending Guide http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/4-things-you-need-to-be-eligible-for-a-reverse-mortgage Many older Americans are taking advantage of a new type of FHA loan.  This new loan actually pays the borrower over time, as opposed to more traditional type of loans.  This new loan is called a Reverse Mortgage.  In the simplest of terms a reverse mortgage converts the equity of a borrower’s home into cash payments.  So how do you know if you qualify?  Listed below are the 4 things potential borrowers have to have in order to be eligible for a reverse mortgage.

Tudor1.    Potential borrowers must be at least 62 years old.  The age of the borrower is a critical factor in how large the loan can be, but that will be explained more after the requirements.

2.    Borrowers must actually own the home and use it as their primary residence.    Certain types of homes are ineligible; they include some manufactured homes, cooperatives and most mobile homes.

3.    The Department of Housing and Urban Development (HUD) has some basic property standards that have to be met in order to qualify for a reverse mortgage.

4.    The final requirement is that you take the time to discuss a reverse mortgage with a HUD approved counselor.  This counselor will provide more information and help you decide whether a reverse mortgage is right for you.  The will also help you find a lender and can determine whether your home meets HUD minimum standards.

Should you decide that a reverse mortgage is right for you, the mortgage loan amount will be determined be the age of the youngest borrower, current interest rates, and the appraised value of your home or insurance limits.  Typically, high age, low interest rates, and high home value will mean a larger loan.

The best part about a reverse mortgage is that it does not have to be repaid as long as the borrower still occupies the home as their primary residence.  When the home is sold, the mortgage lender will receive the principal of the loan as well as any interest accrued.  Any remaining funds will go to the borrower or their survivors, but it is important to note that borrowers will never owe more than the value of the home

]]> http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/4-things-you-need-to-be-eligible-for-a-reverse-mortgage/feed 3 Reverse Mortgage Costs http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/reverse-mortgage-costs http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/reverse-mortgage-costs#comments Thu, 03 May 2007 18:02:21 +0000 MLP Lending Guide http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/reverse-mortgage-costs seniorAs with a new home or a refinance of a home, there are costs associated with obtaining a reverse mortgage. The following are some of the fees associated with a reverse mortgage loan. It is important to note that many times these fees are capped to avoid large costs to pay upfront:

  • Origination fee
  • Insurance premium
  • Appraisal Fee
  • Closing Costs

Origination Fee
Origination fees are charged so that the lender may cover operating costs associated with their business.

Mortgage Insurance Premium
The Mortgage Insurance Premium is charged to protector you if your lender should go out of business.

Appraisal Fee
An appraiser will inspect your home and generate an appraisal report. This report is used to assess the value of your home and equity. The appraiser charges a fee to evaluate your home and prepare the report for your lender.

Closing Costs
Closing costs include a variety of fees that are associated with many types of loans, including reverse mortgage loans. Some of the fees included in the closing costs are, credit reports, flood certification, and escrow.

]]> http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/reverse-mortgage-costs/feed 1 New to Reverse Mortgages? Read this First http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/new-to-reverse-mortgages-read-this-first http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/new-to-reverse-mortgages-read-this-first#comments Mon, 30 Apr 2007 14:22:25 +0000 MLP Lending Guide http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/new-to-reverse-mortgages-read-this-first A reverse mortgage is a type of mortgage that allows for owners to quickly exchange the equity in their home for cash.  The mortgage does not have to be paid back until the home is sold, or the owner no longer lives in the home as their primary residence.

Typically reverse mortgages are ideal for elderly homeowners.  Since many mature homeowners on a fixed income, using the equity in a home can help with bills, unexpected expenses (such as medical costs) and the upkeep of a home.

The reverse mortgage loan has appeal to a homeowner that has been in their home a long period of time.  When considering a reverse mortgage, it is important to investigate the details of the mortgage.  Upfront costs can be high when the loan is very high, and the pay off time is over a long period of time as opposed to a shorter period of time.

]]> http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/new-to-reverse-mortgages-read-this-first/feed 0 Top 10 Things to Know About Reverse Mortgages http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/top-10-things-to-know-about-reverse-mortgages http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/top-10-things-to-know-about-reverse-mortgages#comments Wed, 25 Apr 2007 19:59:58 +0000 MLP Lending Guide http://www.mortgageloanplace.com/lending-guide/reverse-mortgages/top-10-things-to-know-about-reverse-mortgages Are you an older American in need of a safe plan that can give you greater financial security? Do you need extra funds to supplement your social security, make home improvements, meet unexpected medical expenses, or more? The U.S. Department of Housing and Urban Development (HUD) has created a federally-insured private loan that may just provide the money you’ve been looking for. It is the Reverse Mortgage and it becoming more and more popular in America. If you’re interested in a Reverse Mortgage it is important know the critical details and whether this type of loan is the right one for you.

A Reverse Mortgage, in 4 Sentences or Less
1. A lot of people do not know about reverse mortgages or what they are, so here is a simple breakdown of the loan. A reverse mortgage allows homeowners to convert parts of the equity in their home into cash payments. The best part about this special type of loan is that there is no repayment required while the home is used as the borrower’s primary residence. You won’t find this feature in a second mortgage or more traditional home equity loans. The Department of Housing and Urban Development provides these great benefits and insures them as well.

Who Qualifies?
2. So far this sounds pretty good, but do you qualify? The Federal Housing Administration (FHA) of HUD has a few requirements for you to be eligible for a reverse mortgage. A borrower has to be at least 62 years old. They have to have a low mortgage balance that can easily be paid off with proceeds from the reverse loan, or they must own the home. They must also live in the home. One other requirement is that you receive some consumer information for a counseling agency approved by HUD prior to obtaining your loan. The Housing Counseling Clearinghouse can be reached at 1-800-569-4287. They will provide you with the name and number of an approved counseling agency in your area.

reverseWhat Home Types Are Eligible?
3. Many potential borrowers are curious as to what types of homes are eligible. As long as the borrower owns and occupies the home, most types of homes are eligible. Single family dwellings and two-to-four unit properties are eligible. Detachable homes, some manufactured homes, townhouses and FHA-approved condos are eligible. Under the Spot Loan Program some individual condominium units can possibly qualify.

My Loan Wasn’t an FHA Loan
4. Typically there is some confusion regarding whether an FHA financed home is required for a reverse mortgage. The answer is no. It does not matter what type of mortgage you used to finance your home.

How Are Reverse Mortgages Unique?
5. Reverse mortgages are commonly compared to bank home equity loans and second mortgages. The difference between the two is mostly in the requirements. With reverse mortgages the loan pays you over time, and is available regardless of your current income and debt to equity ratio, unlike the other types of loans. With reverse mortgages the amount borrowed is determined by the age of the borrower, the value of the home, and the current interest rate. There are no payments to be made with a reverse mortgage because the loan is not due while you still use the home as your primary residence.

Will I Lose My Home?
6. Many borrowers fear that their home can be taken away from them if they outlive the loan. Fortunately, their fears are unfounded. You can never owe more on the loan than your home’s value so you do not need to repay the loan as long as you maintain the home as your primary residence.

How Much Money Will I Get Per Month?
7. The most important thing most borrowers want to know if how much money they can get with a reverse mortgage. This amount is dependent on a number of factors including the age of the borrower, the appraised value of the home or FHA mortgage limits in the area, and the current interest rate. In general, the high the borrowers age, and the lower the interest, the more one can borrow.

What About My Inheritance?
8. Borrowers tend to worry about being able to leave their heirs an estate. This typically is not a problem. Borrowers will repay the cash received as well as interest and other fees to the lender when the borrower no longer uses the house as their principle residence, or they sell the home. Any leftover equity will belong to the borrower or their heirs. Needless to say, the debt will never pass along to the estate of heirs and no other assets will be affected by the loan.

Should I Use an Estate Planning Service in Conjunction with my Reverse Mortgage?
9. Potential borrowers typically use an estate planning service and wonder whether they should use this service to help find a reverse mortgage. The Department of Housing and Urban Development does not recommend this or any other service that charges a fee for referring a borrower to a lender. HUD will actually provide all this information to you free, or at lower costs than other services. To find a HUD-approved lender or housing counseling agency near you, call, toll-free, 1-800-569-4287.

How Will I Receive My Payments, Monthly or in a Lump Sum?
10. There are typically five payment options, and they are: Tenure, Term, Modified Tenure, Modified Term, and Line of Credit. With the Tenure option the borrower receives equal monthly payments for as long as they continue to use the property as their primary residence. The Term option offers equal monthly payments for a set monthly period. Modified Tenure offers a combination of the Line of Credit option with Tenure, meaning they have a line of credit when payments are needed as well as monthly payments. Modified Term is similar to the Modified Tenure in that it provides a Line of Credit along with monthly payments for a fixed period. Last is Line of Credit, which offers completely unscheduled payments, with payments being made when needed until the line of credit is exhausted.

With all this information you should be able to decide if a reverse mortgage is right for you or your loved ones.

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