Reverse Mortgages

Home Reverse Mortgages

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Reverse Mortgages

A reverse mortgage is a home loan for seniors age 62 or older. Instead of making monthly mortgage payments like a traditional home loan, Reverse Mortgage are paid back in one lump sum when the borrower either moves, sells the home, or passes away. Income, assets, monthly living expenses and credit history may be verified.

Frequently Asked Questions about Reverse Mortgages

Does the bank own my home?

The borrower continues to retain title and ownership. The bank is not on the title.

Can I get a Reverse Mortgage even if I currently have a mortgage?

The first thing that will be paid off is your current mortgage and any other liens against the property. As long as you have enough equity to do this, a Reverse Mortgage would work for you.

Will a Reverse Mortgage cause me to pass debt on to my heirs?

A Reverse Mortgage is a non-recourse loan. There is mortgage insurance, which is a Federal requirement, and will pay off the difference from the value of your home to what you owe. No one comes out of a Reverse Mortgage owing more than the value of their home. If the value of the home is greater than what is owed, the heirs inherit the additional money after the loan is paid.

Is a Reverse Mortgage risky?

Numerous safeguards have been built into the program, including mandatory HUD-approved counseling, payment guarantees, capped interest rates, advanced disclosures, a three-day rescission period and a non-resource limit.

Must a senior be in good health to qualify?

There is no employment or health requirements.

Is a Reverse Mortgage expensive?

A Reverse Mortgage will cost more than a traditional loan. The closing costs are HUD and FHA protected for the borrower.  All costs are to get the loan processed and to ultimately protect the borrower and their heirs, as well as the bank.

HomeReady Loans

Fannie Mae’s HomeReady mortgage is designed for the diverse needs of today’s borrowers with flexibilities not found with other conventional mortgage products. What does that really mean to you?

HomeReady mortgage addresses common financial challenges and offers expanded eligibility guidelines, such as:

  • Offers a 3% down payment option.First-time and repeat homebuyers can purchase a home with a down payment as low as 3% of the purchase price.
  • Supports extended families.Income from a household member who is not a borrower (i.e., they won’t be on the mortgage) will be considered. This means—in multi-generational households, the income of children, grandparents, or other extended family members may help buyers qualify for a HomeReady mortgage.
  • Allows co-borrower flexibility.All borrowers do not have to reside in the property. For example, parents, who won’t be living in the home, can be co-borrowers on the loan to help their children qualify for a mortgage and purchase a home.
  • Accepts additional income sources.Rental payments may be considered as another allowable income source to help qualify a buyer (i.e., rental payments from a basement apartment). Income limits may apply.

The HomeReady mortgage also has rates comparable to conventional mortgages and has cancellable mortgage insurance, unlike other low down payment mortgage options.