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Reverse Mortgage Defined
Reverse Mortgages allow homeowners 62 years of age to stay in their home without a monthly mortgage payment. It is a loan that does not need to be repaid until you no longer occupy the property as your primary residence. There are several terms used throughout the application and closing process.
Reverse Mortgage Defined – Terminology
Reverse Mortgage Defined: A reverse mortgage loan is specifically designed for homeowners older than 62 years of age. The reverse mortgage allows you to borrow money against your current home and use the equity as you please.
Lump Sum: The payout in cash – a single lump sum.
Closing Costs: The costs you must pay to secure a reverse mortgage defined includes an origination fee, title insurance, appraisal, lawyers, pest and other inspections, escrow, a credit report and more.
Reverse Mortgage Counselor: An individual you are required to meet with who is from a government-approved agency and explains the advantages and disadvantages of a reverse mortgage.
The Department of Housing and Urban Development (HUD): HUD is a federal department committed to increasing homeownership.
Fannie Mae: Fannie Mae is a publicly traded company that works with the federal government to direct funds toward helping low, moderate and middle-income Americans in homeownership.
Home Equity: Home equity is the value of your home minus any balance on your mortgage.
Lending Limits: Lending limits differ based on the program and is the maximum reverse mortgage defined loan amount that any home would qualify for. The Obama Administration temporarily increased the national reverse mortgage defined lending limit to $625,500 until December 31, 2009.
Line of Credit: The loan amount available to you in a line of credit that you only make interest payments on if you use the money.
Loan Amount: Loan amount is the actual amount you are eligible to borrow in a reverse mortgage. Your loan amount is based on your age, the current interest rate and the value of your home.
Mortgage Insurance: Mortgage insurance is insurance on your home and is required in the HECM program.
Origination Fee: An origination fee is a fee charged by the lender for processing the application and funding the loan.
Qualifications: The main factors for the reverse mortgage defined program requires your age to be 62 years or older, you to own your home and for you to remain in it during your participation in the program. Your income, health and credit are not factors for qualification.
Reverse Mortgage Defined Lender
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