A Hud Reverse Mortage For Retirement?

A Hud Reverse Mortage For Retirement?

HUD reverse mortgages can be a great tool for Seniors that are looking for additional funds for retirement. Through a HUD reverse mortgage- seniors can tap into the equity from their homes without h Contd...

HUD reverse mortgages can be a great tool for Seniors that are looking for additional funds for retirement. Through a HUD reverse mortgage- seniors can tap into the equity from their homes without having to make repayments.

HUD Reverse Mortgage Eligibility

Homeowners must meet the following criteria in order to be eligible for a HUD reverse mortgage:

- Homeowner must be age 62 or older.

- The home must be owned free and clear or have a mortgage balance that can be paid from equity.
- The home must be a principal residence.

- The property must be a single-family home- a one-to-four unit dwelling with one unit occupied by the applicant- a manufactured home (mobile home)- or a unit in condominiums or Planned Unit Developments.

- The property must meet minimum property standards.

Homeowners that qualify can receive payments in a lump sum- on a monthly basis- or on an occasional basis as a line of credit. At a later date the payment options can be restructured if circumstances change.
Guidelines on HUD Reverse Mortgage Amounts

The amount that can be borrowed on a HUD reverse mortgages is determined by the following criteria:

- The borrower/' s age - The older the borrower the more that can be borrowed against the value of the home

- The loan interest rate - Obviously the lower the interest rate the more that can be borrowed.
- The home/' s value - There is no hard limit for home value to qualify for a HUD reverse mortgage- but the amount that may be borrowed is capped by the maximum FHA mortgage limits for an area. This means that owners of a high priced home can/' t borrow any more than the owners of homes valued at the FHA limit.

There are no asset or income limitations on borrowers receiving a HUD reverse mortgage.

Unlike ordinary home loans- a HUD reverse mortgage does not require repayment as long as the home remains the borrowers primary residence. When the home is sold the Mortgage company recovers their principal- plus interest- and the remaining value of the home goes to the homeowner or to his or her survivors. Should the sales proceeds not cover the amount owed- HUD will pay the mortgage company for any shortfall.

The Federal Housing Administration- which is part of HUD- collects an insurance premium from all borrowers to provide this coverage. Typically the mortgage company pays for this insurance and charges it to the borrower/' s principal balance. This FHA reverse mortgage insurance can make HUD/' s reverse mortgage program less expensive to borrowers than private programs without FHA insurance.

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