What is reverse mortgage? A Reverse mortgage is a special type of loan for seniors 62 or above, that lets you convert a part of equity in your home into usable cash. Borrowers do not need to repay the loan if the home is their primary residence and they meet the obligations of a reverse mortgage. Most reverse mortgages are provided by the Federal housing administration (FHA), as part of its home equity conversion mortgage (HCEM) program.
What types of home are eligible?
Any single family home or a 2-4 unit home with one unit occupied by the borrower or condominiums which are approved by HUD and manufactured homes that meet the FHA requirements are eligible for Reverse mortgage program.
Can I qualify for FHA’s HECM reverse mortgage?
To be
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Homeowner must live in the home
You are also required to receive consumer information free or at loq cost from a HECM counselor. Call………….. now.
.
Will our heir(s) inherit the home?
Yes. Your designated heir may retain the property and satisfy the reverse mortgage debt by paying lesser of
.the mortgage balance or
.95% of the current appraised value of the home.
What are my obligations?
Following are the obligations of a reverse mortgage borrower
• Pay your property-related expenses like property taxes, utilities, HOA fees, hazard insurance on time.
• Property’s condition should be maintained. One must maintain the condition of the home as in the same quality as it was kept at the time you took out the reverse mortgage loan.
• Live in the property as your primary residence.
What are the benefits of a reverse mortgage?
A reverse mortgage provides you a source of income while allowing you to stay in the home.
A reverse mortgage is an effective way to benefit from the money you invested in your home over the years.
Are there any special requirements to get a reverse mortgage?
A borrower must own a home, should be at least of 62years of age. Have enough equity in your home. There are no medical requirements. Borrower has to continue paying property taxes and homeowner’s
Equity Stripping: The lender makes a loan based upon the equity in the debtor’s home. If the debtor cannot repay the loan, the home goes into foreclosure.
Loans between $25,000 and $50,000 - base rate plus 3.25 percent or base rate plus 3.75 percent.
Collateral for the defaulted loan. Distressed real estate involves making a distressed purchase. According to Financial Crisis (2011), “[A] distressed purchase is whereby the property owners are usually in a foreclosure/short sale situation.” Foreclosure applies to a residential real estate loan in which a bank or creditor repossesses a home because of nonpayment. The institution will legally possess the right to resell the property as collateral for the defaulted loan. The selling price can be sold at a price equal to or greater than the original loan. The reason distressed properties can be bought at a lower price is the institution has already received a series of payments toward the original home loan. In many situations the lender can sell the house for a lower cost than the normal market value, leaving the buyer the opportunity to make a purchase at a lower selling price than market value and reselling the property at a profit (Demand Media, 2011).
The VA is the Department of Veterans Affairs and they provide loans to veterans and other eligible personnel to help them purchase a home with no down payment.
For the decades before the current housing crisis, buying homes and loaning money was a simple, but strict, affair and had had two outcomes. Either the borrower could pay back the money owed or they could not pay the money back. If the borrower could pay the money back, they could keep their house or whatever they took out the loan for. If they could not pay the money back, the lenders repossess the things that were not paid for. When this happens with a house, it is called foreclosure.
The FHA loan requirements are basic, however ensuring that you meet the requirement is essential...
When working within the realm of real estate, flipping houses is one of the most lucrative projects one can undertake. The premise of this idea is buying a home in need of repair, renovating it, and selling it at its newly appraised value. In high school, I worked alongside my mother to renovate a home in our small town of Trinidad, Colorado. The invaluable lessons I learned throughout this business venture gave me insights into the inner workings of house flipping. What I gained from this experience will lead to better decision making if I choose to take on another project. With a $150,000 budget, the most important aspects to focus on in a renovation would include updating appliances, applying fresh paint, installing proper flooring, and revamping the exterior. Assuming that the home being foreclosed on costs $110,000, I would allocate $20,000 of my budget for renovation expenses. This leaves a $20,000 buffer to be used as an emergency fund.
People who have lost their homes in the past and those of "us" with "watered down dreams" have no desire to go through the kind of hardship that we have already seen once; let alone do it again, even if they could find a lender who would finance another mortgage.
There could be others that don’t exclude current homeowners. The first few months’ mortgage could be paid for, or furnished. President Obama is very intellectual and I think he has the capacity to make wise decisions and fix our foreclosure crisis.
Mortgage loans are a substantial form of revenue for the financial industry. Mortgage loans generate billions of dollars in the financial industry. It is no secret that companies have the ability to make a lot of money by offering a variety of mortgage loan products. The problem was not mortgage loans but that mortgage companies were using unethical behavior to get consumer mortgage loans approved. Unfortunately, the Countrywide Financial case was not an isolated case. Many top name mortgage companies have been guilty of unethical behavior. Just as the American housing market was starting to recover from its worst battering since the Great Depression, a new scandal, an epidemic of flawed or fraudulent mortgage documents, threatens to send not just the housing market but the entire economy back into a tailspin (Nation, 2010).
Owning a home can sometimes be extremely costly to the homeowner in the beginning. For example, a person would have to come up with a down payment before ever getting into the house. Often times the down payment is around twenty percent of what the home may cost. Furthermore, a person would have to come up with the closing
Buying a home is more complex then most think. A purchaser of a home doesn't pay in cash when buying a house. If that were so, then nobody would be able to afford one. A potential buyer must get a loan. The bank doesn't lend their money to just anybody, so there are prerequisites before a buyer should consider buying a home. The potential buyer must have enough money for a down payment which is 3% to 20% of purchase price, a steady job with for at least two years or more, must have a decent credit score with at least a 640 or better. That is standard for the market. (1) The credit score is based on the FICO score. FICO stands for, Fair Isaac Corporation, a company that has been in business since the early 1950's and monitors consumers' credit ratings and put a scoring system on it. (2) Conventional loans are usually financed up to eighty to ninety percent with a down payment required of ten to twenty percent. The potential buyer must also have a debt ratio not exceeding 28/39 of their income. The first number 28 refers to your new mortgage payment that cannot exceed 28% for your gross combined income and 39 refers to your mortgage payment plus revolving and installment debt as well as taxes and insurance cannot exceed 39% of you total combined gross income (3).
unable to buy a house. This is good for people who are only in the
young couple and we do not have enough credit history to purchase a home of our own,
Home loans, or mortgages, use a borrower's home for collateral. This home can be a single-family house up to four-unit property, as well as condominium or cooperative unit. Lenders fund home loan, but both the lender themselves and broker who act on behalf of the lenders originate.