Reverse Mortgage Loan Blog

According to the Federal Housing Administration (FHA),”With a traditional second mortgage, or a home equity line of credit, homeowners must have sufficient income versus debt ratio to qualify for the loan, and are required to make monthly mortgage payments.The reverse mortgage is different in that it pays the homeowner, and is available regardless of their current income.”

In order too qualify for a FHA HECM, the FHA requires that a homeowner be at least 62 years of age or older, own your home free and clear of any encumbrances, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, and you must live in the home.

Homeowners are also required to receive related consumer information, which is free or at a minimal cost from a HECM counselor prior to obtaining the loan.

The amount a homeowner can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA’s mortgage limits for your area, whichever is less.

Seniors are cautioned to verify the credentials of any representative who may contact them regarding the topic of a reverse mortgage simply to be on the safe side. As with any business where large monetary sums are involved, the potential for scams is present.

Basically, reverse mortgage scams are oftentimes cleverly disguised traps laid by fake websites or reverse mortgage companies planning to charge large fees to unsuspecting homeowners seeking a reverse mortgage. Unfortunately, like other scams, telemarketing seems to be the most popular means of initial contact used for cheating. Senior citizens are often contacted via telephone and goaded into disclosing personal information.

The Department of Housing and Urban Development (HUD) reminds homeowners that information relating reverse mortgages is always provided free of charge by HUD.

Found here.

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