Reverse Mortgage Wholesale Mortgages | Home Loans | Refinance

Reverse Mortgage : Eligibility Closing Costs Interest Rate Effect on Public Benefits Loan Repayment

Reverse Mortgage is a special type of loan that enables the older homeowner to tap the equity they have in their home and receive cash proceeds. Unlike traditional equity loans, no repayment is required until the home is no longer their principal residence. There are no income, asset, employment or credit requirements to participate.

Eligibility
The homeowners must be at least 62 years of age and occupy the property as their principal residence
The home must be owned free and clear or have a mortgage balance that can be paid off with a reverse mortgage
The property must be a single-family or up to a four-unit dwelling
Tax-Free Income Options
Lump Sum Advances make cash immediately available.
Tenure plans provide fixed monthly cash advances.
A Line of Credit makes available cash when requested by the borrower.
(Not Available in Texas)

Closing Costs
There are fees to obtain a reverse mortgage. These costs may include an origination fee, title insurance, appraisal, a mortgage insurance premium and attorney fees. All of these costs can be financed into the loan for the participant.
Typically, the only out of pocket expense is $300.

Interest Rate
Only adjusting interest rate loans are available. Rates are linked to the one-year U.S. Treasury Security Rate.
The change in the interest rate has no effect on the amount or the number of loan advances that the borrower can receive, but causes the loan balance to grow at a faster or slower rate.

Effect on Public Benefits
Loan proceeds are not considered income and will not affect Social Security

Loan Repayment
The loan is due and payable when the borrowers no longer consider the property as their principal residence or fail to comply with the loan agreement.
The agreement states that the borrowers understand it is their responsibility to maintain the property and to pay the real estate taxes and hazard insurance premiums.
The loan must be repaid in one payment - either from the sale of the home or through other resources. There is no requirement that the property be sold, only that the loan is repaid.

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