Reverse Home Mortgages

Reverse home mortgages are a great option for many older Americans who are ready to retire. They are available to citizens who are at least 62 years of age. These loans are easy to obtain because a credit and/or income check is not necessary in order to qualify. If you are looking for retirement planning information, you may want to visit with a consultant who can inform you about your options in reverse home mortgages.

Reverse Mortgage Fees and Payment Options

Reverse home mortgages allow you to acquire additional funds for retirement without selling your house. You can take your home equity as cash without paying regular loan payments. As your home equity decreases, your debt will also increase. Yet, you will no longer need to make monthly payments on a loan to own your house. With reverse home mortgages, you will retain title and full ownership rights on the property. You will not need to repay the loan until you have vacated the house.

Fees may vary according to the type of reverse mortgage loan you choose. Government loans typically have lower fees than private sector loans. Private sector loans have a variety of fees, including an origination fee and closing costs. However, private sector loans usually have a higher maximum lending limit than government loans.

You can choose to receive payments for reverse home mortgages in one of three ways. You can designate certain amounts to be given to you at specific times of the year or receive monthly cash advances. You can also choose to establish a line of credit, or simply receive your payment in a single, lump sum. The type of payment you choose will depend on your preferences and circumstances.

Types of Reverse Mortgage Programs

There are three types of loan programs that you may choose for reverse home mortgages. FHA-Home Equity Conversion Mortgage loans and Fannie Mae Homekeeper loans are available in every state. Financial Freedom Cash Account loans are only available in 24 states. Each loan differs in payment options.

FHA-Home Equity Conversion Mortgage loans are federally insured so that there will be no loss to the borrower or lender. The income payment options are flexible with this loan and it has line of credit options. The maximum amount of the loan is determined by the age of the borrower, presumed interest rates, and the value of the house.

Fannie Mae reverse mortgages, or Homekeeper loans, are guaranteed by Fannie Mae. Fannie Mae is a private, national mortgage company. The Homekeeper loan was developed in the mid-1990s and offers some options for customizing plans according to individual needs. This type of loan has line of credit options and has a maximum lending limit that is higher than FHA-HECM loans.

Cash Account reverse home mortgages are only offered in 24 states. This is a desirable type of loan because it offers flexible income payment options as well as a line of credit options. It has higher home equity release options as well, and has no maximum lending limit. Cash account loans are primarily designed for seniors who own higher priced homes. Before choosing from the different types of reverse home mortgages, consumers should consider all of their options and determine their preferences for retirement.