A reverse mortgage loan is a loan for older homeowners, insured by the U.S. Federal Government and only available through FHA-approved lenders through the Home Equity Conversion Mortgage (HECM) program.. In this type of loan, the lender makes either a lump sum payment (or monthly payments) to the borrower by withdrawing equity from the home. The amount paid is determined by age, current interest rate, and existing loan to value (LTV). The borrower is always responsible to pay property taxes and homeowner’s insurance.
You can also purchase a primary home with a HECM. You must be able to pay the difference between the purchase price plus closing costs of the new home and the HECM proceeds. To learn more about the program, contact one of our Extreme Mortgage Bankers.
Who Should Consider a Reverse Mortgage Loan?
In order to qualify for a reverse mortgage loan, you must be at least 62 years old. The home must be your primary residence, and you need to have paid off a considerable amount or all of your mortgage.
All borrowers must speak with a HUD approved counselor