Reverse mortgage features and highlights to know because so many changes have happened in the last year to this unique product. If you are considering a reverse mortgage, please review the aspects of it below:1.) There used to be three options to a reverse mortgage in 2013, but that has been narrowed to two options with all the changes. The first option is the HECM Standard for refinancing into a reverse mortgage or refinancing an existing reverse mortgage. You can take out up to 60% of the value of your home with this product. The second option is the HECM Standard for purchasing a property, which can give you major leverage when shopping for a home.
2.) You can only use a reverse mortgage on your primary residence, so you must be living in that property for more than 6 months out of the year. If the lender determines that the home with a reverse mortgage on it is no longer you primary residence, they can call the loan due. So you must either refinance the loan into a traditional mortgage, sell the home or pay off the reverse mortgage on your own. On the flip side, if you end up in a nursing home, you can live in the nursing home for up to 12 months with the lender calling the loan due. If you live in the nursing home for more than 12 months, then the lender would determine that you will probably not be going back to your residence and they may call the loan due.
3.) You must maintain your property, pay the property taxes and homeowners insurance on your own if you have a reverse mortgage on your residence. If you start to become late on your property taxes, the lender will work with you to get them caught up, but after a certain amount of time has passed and you cannot stay current on the taxes, then the reverse mortgage can become due.
4.) Some lenders charge a monthly lender fee for servicing your loan, but the max they can charge is $30 a month. The good news is that most lenders do not charge this fee at all. Typically the only lenders that charge this fee is if you have a jumbo reverse mortgage.
5.) If you decide to take out a reverse mortgage, you retain title to the home. The bank or lender does not own the home. Many people think that the lender owns the home, this is not true.
6.) Interest accrues monthly on a reverse mortgage, so your loan balance will grow over time.
7.) Reverse mortgages do not interfere with your social security and medicare benefits because the money you are using is the equity in your home. Another fantastic benefit of a reverse mortgage is the money you receive in equity from your home is not taxable.
Reverse Mortgage Features and Highlights
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Reviewed by Merlyn Rosell
Published :
Rating : 4.5
Published :
Rating : 4.5