Hud Reverse Mortgage

Homeowners who are 62 years of age or older may want to consider a HUD reverse mortgage. This mortgage is capable of increasing retirement income by giving you access to your home equity without selling the house. Many retirees need extra cash, but don't want to give up their home. In that case, they should consider this type of mortgage.

Requirements of a HUD Reverse Mortgage

Prospective applicants must be at least 62 years old. They must own a home and have substantial equity built up in the home. They can choose various payment options based upon the amount of their equity. Once approved, the mortgage is guaranteed by FHA/HUD. Any existing mortgage liens must be paid off at the time of the new loan.

A HUD reverse mortgage determines the maximum amount you can borrow by using a formula. They use factors such as the age of the borrower, the anticipated interest rate, and the amount that can be insured by FHA. There will be no income verification or check of credit scores. The amount of the loan will be determined based upon the amount of equity in the home and the use of standard formulas.

Applicants need to attend a HUD counseling session at an approved agency. Counselors will verify the applicant's eligibility for the loan and explain the options available for a HUD reverse mortgage. Family members are encouraged to attend so that everyone will be well-informed before a decision is made. A completion certificate will be issued and must be presented to the lender.