A Hud Reverse Mortgage 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 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.
Author-Bio: Charles Kirkendall
writes about reverse mortgages and other Senior financial issues. Visit
http://www.reverse.settle-today.com
for more information and resources on reverse mortgages. |
