Reverse Mortgages For Seniors
Reverse mortgage has become popular in America these days, these are special type of mortgage that helps an homeowner to convert his home equity into cash, this boost up the American older financial security by helping them to meet unexpected medical expenses, home improvement and many more.
The homeowners should be 62 years and older who has already settled any mortgage they have already got it or has remaining small amount of mortgage balance are the eligible people to take up this Reverse mortgage by HUD’s.
Homeowners would be able to receive the payment in a lump sum or can receive on monthly basis for a fixed period of time or as long as they live in the house, this mortgage can be changed according to the circumstances of the homeowners, unlike other mortgages the HUD’s reverse mortgage for seniors do not require repayments from the borrowers as long as they live in that home, the lender will recover the principal amount along with the interest at the time of the house being sold out, and the balance amount will be paid to the house owner or her or his survivors, incase the amount received by selling the house is not sufficient to pay the amount that has been borrowed , HUD will take up the responsibility to pay the shortage amount to the lender. The Federal Housing Administrations that is a part of HUD is responsible to collect the insurance premium from the borrowers for providing the coverage.
The amount of reverse mortgage for seniors will be decided based on the age, interest rate and the value of the house of the borrower, in this type of mortgage the older the borrower the greater the amount that is lent. For instance based on today’s rate of interest 9% approximately a 65 yrs old person can borrow 26% of the value of his home and 75 yrs old person could get 39% of the value of the home and 85 yrs old man get 56% of the value of the home.
To get this reverse mortgage from the HUD you need not present any income proof or show any kind of asset, and there is also no limitation for the value of the homes that is being qualified under HUD’s reverse mortgage. The home owners are charged 2% of the value of the home as up front fees plus one half percent of the balance loan amount every year and this amount can be usually paid by the lender and further charged in the principal amount borrowed by the home owner.