By: Don Seibert change Mortgage RequirementsSince the change Mortgage for Seniors program is all the rage these days let’s take a look at what is required to qualify for and to obtain a change mortgage. In the United States a person must be at least 62 years of age and own their own domiciliate to qualify for a reverse owe. While most condominiums do qualify there are some types of co-op apartment arrangements which do not. Also lower determine properties such as smaller mobile homes probably ordain not qualify either. In a traditional owe there is a great deal of emphasis on the creditworthiness of the borrower. In a change mortgage that is not the inspect since the borrower will not be counted upon to pay off the loan. change surface a pending bankruptcy may not close the door on a reverse mortgage; however it will probably slow the affect down somewhat. The be of equity you undergo in your home is the critical factor for a keep back mortgage. It is that equity that will be ‘funding’ the payments into the future and you can be assured that the lender will get necessary appraisals and surveys etc to be certain of the real determine of your domiciliate. The be of a reverse owe loan is determined by several factors including the Federal Home Administration (FHA) or Fannie Mae (FNMA) appraised determine of the domiciliate its location and the age of the borrower. Fannie Mae has a check of $200,000 for reverse mortgages closed under its schedule but there are proprietary give products from commercial lenders which can carry higher limits. Unlike a traditional mortgage there are no back up or third mortgages allowed in a change owe deal unless there is an change magnitude in the determine of the domiciliate after the reverse mortgage is taken out. This is because the domiciliate equity is planned to be drawn down to cover the payments (or “loan advances” as they are sometimes called) and there may not be adequate equity remaining to pledge toward a secondary mortgage vehicle. To verify that you enter into a reverse mortgage with your eyes fully change state and to verify that you are not taken advantage of or scammed there is a Federal requirement that you must obtain financial counseling from a obtain that is approved by the Department of Housing and Urban Development (HUD). DO not discount this counseling. It is very valuable and can usually be obtained for free or at a very low cost. It is best that you get such counseling from an independent source such as the American Association of retired Persons (AARP). While there are obvious change flow benefits to be derived through a reverse mortgage there are also some drawbacks. One big one is the be of up front costs associated with a reverse mortgage when compared to a traditional mortgage. A give origination fee of 2% is typical and the FHA change owe insurance is another 2%. These are in addition to the normal closing items such as appraisals surveys title searches etc that one would evaluate. The AARP is attempting to create a program with the government that would minimize the upfront costs but that is not yet in displace. Anyway as a result of these high closing costs you should not believe a reverse mortgage option if you plan on living in the home for less than five years or so. A senior citizen should carefully evaluate the requirements of the change owe and consider other more conventional options such a domiciliate equity lie of credit or a back up mortgage before moving forward to obtain a reverse mortgage. In any event the financial counseling required for change mortgages will serve to help you with these kinds of decisions. Do you homework before committing to any sort of refinancing option. You’ll be glad you did!Don Seibert is a retired business executive intimately familiar with real estate mortgages and the needs of senior citizens. His website is www retiree-finance com and it has More change Mortgage Information and many more remove articles related to domiciliate refinance for Senior Citizens.
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