FHA and Investor Specialist

FHA Reverse Mortgage: If you are 62 or older and own your own home, you may qualify to continue to live in the comfort of that home while receiving monthly cash advances and long term financial security.  FHA Reverse Mortgage gives you a simple way to unlock the equity in your home without having to sell, move, or take out a traditional home equity loan. 

FHA Reverse Mortgage, or a The Home Equity Conversion Mortgage (HECM) is a special type of home loan called a reverse mortgage, and is backed by the Federal Housing Administration.(FHA)  An FHA Reverse Mortgage loan enables you to tap the equity in your home and unlike traditional home loans, a HECM actually pays you.  Best of all, a FHA Reverse Mortgage  requires no repayment of monies received as long as you occupy your home as a primary residence.  There are no income or credit requirements as well.

With that said, there are some important things to be aware of regarding a FHA Reverse Mortgage, particularly in terms of upfront and monthly costs.  Some important points:

          •1. Owner Occupied, Primary Residences Only.  If you no longer reside in the home that has a reverse mortgage, you may be required to pay off the loan.

          •2. HUD fees are a 2% MIP- Mortgage Insurance Premium upfront which is due at closing.  This amount is based on the max claim amount. A.5% monthly fee is also assessed each month.  Closing costs are usually 4-5% of the maximum claim amount. 

          •3. The maximum claim amount is the lesser of the county 203b loan limit or the property appraised value.

          •4. All borrowers must be at least age 62 or older, and a citizen or a legal resident to qualify.

          •5. All borrowers must receive credit counseling, and a list of 10 credit Counseling Agencies must be provided to the client.

An FHA Reverse Mortgage allows for different payment plans, or payout plans depending on how you look at it.  A client can request a lump sum payment, or a line of credit, or even a monthly payment for as long as the property is occupied by the client.  The different plans can be modified as well, whereby a client can receive a small lump sum at closing and a monthly payment. Or a client could have a line of credit coupled with a monthly payment.  It is important to discuss your options that you feel would work best for you.

A newer development as well is a consumer may be able to purchase a home utilizing an FHA Reverse Mortgage as well, given they have a large enough down payment.  This is a great way for a c onsumer to downsize and reduce expenses significantly.  The down paymnet varies, but is generally approximately 50% of the purchase price.

An FHA Reverse Mortgage is not for everyone 62 or older, but in many cases it can provide the necessary cash flow, give the client the ability to make home improvements, or simply have an available line of credit to continue to live independently.  If you would like more information for yourself, a loved one, or if you are a financial planner or an attorney advising a  client; please feel free to contact me directly at 908 531 6170 or naitch6203 at yahoo dot com.