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Cleveland Ohio Home Loans
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Cleveland, OHIO
REVERSE Mortgages
If you’re 62 or older – and looking for money to finance a home improvement,
pay off your current mortgage, supplement your retirement income, or pay for
healthcare expenses – you may be considering a reverse mortgage. It’s a product
that allows you to convert part of the equity in your home into cash without
having to sell your home or pay additional monthly bills. The Federal Trade Commission (FTC), the nation’s consumer protection agency,
wants you to understand how reverse mortgages work, the types of reverse
mortgages available, and how to get the best deal. In a “regular” mortgage, you make monthly payments to the lender. In a
“reverse” mortgage, you receive money from the lender, and generally don’t have
to pay it back for as long as you live in your home. The loan is repaid when you
die, sell your home, or when your home is no longer your primary residence. The
proceeds of a reverse mortgage generally are tax-free, and many reverse
mortgages have no income restrictions. There are three types of reverse mortgages: Single-purpose reverse mortgages are the least expensive option. They are not
available everywhere and can be used for only one purpose, which is specified by
the government or nonprofit lender. For example, the lender might say the loan
may be used only to pay for home repairs, improvements, or property taxes. Most
homeowners with low or moderate income can qualify for these loans. HECMs and proprietary reverse mortgages are more expensive than traditional
home loans, and the up-front costs can be high. That’s important to consider,
especially if you plan to stay in your home for just a short time or borrow a
small amount. HECM loans are widely available, have no income or medical
requirements, and can be used for any purpose. Before applying for a HECM, you must meet with a counselor from an
independent government-approved housing counseling agency. Some lenders offering
proprietary reverse mortgages also require counseling. The counselor is required
to explain the loan’s costs and financial implications, and possible
alternatives to a HECM, like government and nonprofit programs or a
single-purpose or proprietary reverse mortgage. The counselor also should be
able to help you compare the costs of different types of reverse mortgages and
tell you how different payment options, fees, and other costs affect the total
cost of the loan over time. To find a counselor, visit
www.hud.gov/offices/hsg/sfh/hecm/hecmlist.cfm or call 1-800-569-4287. Most
counseling agencies charge around $125 for their services. The fee can be paid
from the loan proceeds, but you cannot be turned away if you can’t afford the
fee. How much you can borrow with a HECM or proprietary reverse mortgage depends
on several factors, including your age, the type of reverse mortgage you select,
the appraised value of your home, and current interest rates. In general, the
older you are, the more equity you have in your home, and the less you owe on
it, the more money you can get. The HECM lets you choose among several payment options. You can select: You can change your payment option any time for about $20. HECMs generally provide bigger loan advances at a lower total cost compared
with proprietary loans. But if you own a higher-valued home, you may get a
bigger loan advance from a proprietary reverse mortgage. So if your home has a
higher appraised value and you have a small mortgage, you may qualify for more
funds. |
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Tim
Bradford -- OHIO MB.803389/LO.007173 ---- NMLS CO.142066/LO.250013 Pending |
| Tim Bradford -- OHIO MB.803389/LO.007173 ---- NMLS CO.142066/LO.250013 Pending |
Affiliated Web Sites
Ohio Home Loans
All about Ohio HECM Reverse Mortgages
Rent Vs Own in Ohio
Ohio First Time Buyer Programs Grants
Cleveland and Northern Ohio Realtors
Ohio Buyers and Sellers Resources
Information - Ohio 203K Loan
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