A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence or fail to meet the obligations of the mortgage.
With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments. The reverse mortgage is different in that it pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home, sales price or lender's mortgage limits.
To be eligible for a HUD reverse mortgage, HUD’s Federal Housing Administration (FHA) requires that the borrower be 62 years of age or older; have a very low outstanding mortgage balance or own his or her home free and clear; and that he or she meets with a HUD-approved counseling agency to make sure he or she understands what a HUD reverse mortgage will mean.
As with Residential and Commercial Closings, a Reverse Mortgage Closing requires a skilled and experienced attorney to ensure an easy, worry-free process. Contact the one of the highly trained attorneys at Heekin Law to learn how to get started at (904) 998-9733.