A reverse mortgage is a unique type of home equity loan available to seniors age 62 or older who would like to use their home equity to acquire cash. Reverse mortgages allow seniors to borrow the cash they need without having to make any monthly mortgage payments*. Cash can be used for various needs including home improvements, urgent medical expenses, in-home care, and even normal day-to-day expenses, making reverse mortgages a valuable option for many seniors. JZ Mortgage Services, Inc. offers reverse mortgages to seniors throughout Bradenton, Sarasota, St. Petersburg and Tampa and the surrounding Florida areas.
Introduction to Reverse Mortgage Loans
When a borrower takes out a typical home equity loan, they are required to make monthly payments to their lender. With the reverse mortgage, the lender makes a payment to the borrower each month, which is how the reverse mortgage gets its name. Once the borrower no longer occupies the home as their primary residence, the loan will then need to be repaid. Even though you are not making monthly payments to a lender, it is important to know that you remain the owner of your home.
The most common type of reverse mortgage is a Home Equity Conversion Mortgage (HECM) which is the Federal Housing Administration’s (FHA) reverse mortgage product. The HECM is the only reverse federally insured reverse mortgage option. HECMs make up the majority of the reverse mortgages in the United States.
Many HECM borrowers use reverse mortgages when they need extra cash, but reverse mortgages can also be used to purchase new homes. To purchase a home with a reverse mortgage, seniors must pay the difference between HECM proceeds and the sale price of their old homes, in addition to any closing costs.
Qualifying for a Reverse Mortgage Loans
To qualify for a HECM, borrowers must:
- Be at least 62 years of age
- Occupy the home as their primary residence
- Have a low mortgage balance or own their home outright
- Not be delinquent on any federal debt
- Be able to meet financial obligations including property taxes, insurance, Homeowner Association fees, etc.
- Participate in a reverse mortgage information session given by a counselor approved by the U.S. Department of Housing and Urban Development (HUD).
Each borrower’s property must meet specific standards and flood requirements set forth by the FHA.
Reverse Mortgage Loans Payout Options
Depending on the needs of the borrower, there are a few different payment options available. Only a single lump sum payment is available to those who choose a fixed-rate reverse mortgage. Those who choose an adjustable-rate mortgage will have additional options including:
- Line of Credit
- Term – equal monthly payments for a set number of months
- Tenure – equal monthly payments as long as one borrower occupies the property
- Modified Tenure – a line of credit and tenure combination
- Modified Term – a line of credit and term combination
Seniors and their families commonly have questions and concerns regarding reverse mortgages. At JZ Mortgage Services, Inc., we aim to educate seniors throughout Bradenton, Sarasota, St. Petersburg and Tampa, on all aspects of reverse mortgages. If you have any questions about reverse mortgages in Florida, or if you are ready to apply for your reverse mortgage, contact us today!
*disclaimer: “The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, hazard insurance. The borrower must maintain the home.”
IMPORTANT GOVERNMENT DISCLOSURES
These materials are not from HUD, FHA, the USDA, or the VA. These materials were not approved by any government agency. They are independent of any government agency. We are not in any way affiliated with any organization listed or referenced within this website, including HUD/FHA/USDA/VA. The inclusion of various education, information, web links, or materials are not an endorsement of the Sender or any of its employees or business partners.
For information directly from HUD/FHA, visit http://www.hudclips.com
For information directly from the VA, visit http://www.benefits.va.gov/HOMELOANS/
For information directly from the USDA, visit http://www.usda.gov/wps/portal/usda/usdahome?navid=GRANTS_LOANS
NMLS Consumer Access Link: http://www.nmlsconsumeraccess.org/Home.aspx/MainSearch
RESPA Settlement Cost Booklet Link: http://www.hud.gov/offices/hsg/ramh/res/Settlement-Booklet-January-6-REVISED.pdf
CFPB Tool Kit Link: http://files.consumerfinance.gov/f/201503_cfpb_your-home-loan-toolkit-web.pdf