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#1 What is the FHA 'HECM' (pronounced 'Heck-um') Reverse Mortgage?

#2 What's the difference between a Reverse Mortgage and a traditional loan?

#3 Why should I consider a Reverse Mortgage?

#4 What are the eligibility requirements for a Reverse Mortgage?

#5 What type of property is eligible?

#6 What factors determine the amount of money I can receive?
#7 What if my home is worth more than the FHA maximum limit?

#1 What is the FHA 'HECM' (pronounced 'Heck-um') Reverse Mortgage?
This program is a special type of mortgage that enables you, as a senior 62 years or older, to convert a portion of your existing home equity into cash. You can receive a lump sum payment, a monthly income (tenure) a term option (equal monthly payments for a fixed period of time) a line-of-credit or a combination of these choices --- without selling your home, giving up title or making any monthly mortgage payments. The loan does not have to be repaid until you sell, vacate your home or upon your death.



#2 What's the difference between a Reverse Mortgage and a traditional loan?
With a traditional loan or a home equity loan, you must have a good credit rating and sufficient income to qualify for the loan. Monthly mortgage payments are required and if you fail to make payments, you could lose your home. The Reverse Mortgage pays you and no repayment is required as long as your home remains as your primary residence.



#3 Why should I consider a Reverse Mortgage?
If you need additional money for home repairs, to pay off debts or an existing mortgage, supplement your income, medical assistance or even future home care, etc., you may benefit from a Reverse Mortgage. Proceeds will provide you with financial independence and give you peace of mind . There is no reason to be house rich and cash poor, and be hemmed in financially. Your home can be your secondary retirement fund- - - use it to your advantage.



#4 What are the eligibility requirements for a Reverse Mortgage?
You and any co-borrowers (spouse or others) must be at least 62 years old. The house must be owner-occupied and your primary residence. Your home must be free and clear or with an existing mortgage that can be repaid from the proceeds of the new Reverse Mortgage.



#5 What type of property is eligible?
The property can be a single-family residence, a one-to-four unit dwelling with one unit occupied by the borrower, a unit in FHA-approved condominiums or a home in an FHA approved Planned Unit Development (PUD).



#6 What factors determine the amount of money I can receive?
The amount is based on a HUD formula which factors in the appraised value of your home (subject to the maximum allowable FHA limit in your county) the age of the youngest borrower and the current interest rate upon closing. The older you are, the larger your payments are likely to be.



#7 What if my home is worth more than the FHA maximum limit?
If your home exceeds the maximum limit and you desire more cash than is available under the FHA program, the Reverse Mortgage Specialist will explain other options.