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FHA Reverse Mortgage Loan-Get a Hang of It
What is an FHA reverse mortgage?
First and foremost of all, the readers should know what a reverse mortgage is. Well, it is a special type of remortgage without any obligation to make repayment till the homeowner lives in the house. Therefore, reverse mortgage is a loan that is secured against a property. The FHA reverse mortgage is a program having a strong backing of the federal government. It is often referred to as home equity conversion mortgage or HECM (abbreviated format). The prime reason why the majority of the elder persons prefer the FHA program to other available reverse mortgages is that it is fully guaranteed by the government of America.
Eligibility criteria for the FHA reverse mortgage
The homeowner who is at least 62 years of age can avail the FHA reverse mortgage facility. The home must be in a fine condition so the borrower can easily avail a myriad of facilities through such reverse mortgage program. There are certain houses that are eligible to avail this remortgage loan. From a single family dwelling to detached homes to townhouses to commercial properties — it is a prolix list of the suitable items that qualify to access the loans through the well conceptualized FHA reverse mortgage facility. There may be more than one family living in the same property. In that case, the borrowers may be more than one. But here lies an interesting kink. If the co-owner is yet to reach the age of 62, he or she must have to sign a proclamation passing the ownership to the aged co-owner. One more criterion is that the aged persons should not have more than 25% mortgage remaining on their properties.
How much can be borrowed through a FHA reverse mortgage plan?
Well, it depends on the amount of equities that are bottled up in the houses. The location of the property, the prevailing rate of interest and the age of the borrower play the vital roles in deciding the amount to be accessed. A cap is also placed indicating the maximum amount that can be borrowed through a FHA reverse mortgage plan and this amount is reviewed on yearly basis.
The advantages of the FHA reverse mortgage planning
The FHA reverse mortgage originated from the idea of improving the financial penury of many an elderly person. Improving the financial status may be the most vital reason for taking such remortgage plan but there are other convincing reasons such as meeting the health care costs or enjoying the vacation that prod a homeowner to take help of this policy. The major advantage is a borrower is allowed to live in the same property that he or she has utilized to arrange the required money. Moreover, there is no need to get worried over the repayment issue if the person is not planning to sell the house and shift your base to another place. In case of the commercial mortgage loans, a borrower has to sign the deal accepting the clause of paying the money back to the lender after a certain period of time. But the FHA reverse mortgage loan is completely a new concept. The lender can never claim the ownership title till the person lives in the property and does not pass away. Even after the death of the borrower, the immediate heirs can take the burden of repaying the loans in due course of time. It is not mandatory to sell the house to repay the loan that a person has borrowed through the FHA reverse mortgage loan. He or she can collect money from any source and pay it back to the lender.
Current home loan interest rates
Current home loan interest rates are at the best theyve been in many years. This means people wanting to buy a home or refinance have the opportunity to save money. An interest rate of even 1% below what youre currently paying can make a big difference monthly. Additionally you have the opportunity now to think about for how long you want to pay off your house. If refinancing the difference in interest payments might allow you to shorten your pay off time without vastly increasing monthly payments.
Step one in shopping for your mortgage is deciding what type of mortgage you want. Do you prefer a fixed rate that gives you a monthly payment that never changes or an adjustable rate that changes your payments when interest goes up or down? There are also balloon mortgages, VHA mortgages, VA mortgages, interest only mortgages well, you get the picture. Until you know what type of mortgage best suits your circumstances you could very easily end up comparing very different instruments and confusing yourself.
Navigating the world of current home loan interest rates and mortgages can feel more like sinking in a tide. There are hundreds of rules and regulations that govern lending, so besides having a sense for what type of mortgage you need it does not hurt to get the help of a professional, such as a mortgage broker, who can explain what various terms mean and offer ideas suited to your circumstances.
Do not be fooled by fancy promises. Lending is BIG business and there are some rather unscrupulous players in the game. So before you sign on the dotted line for any such services, check with the local Better Business Bureau or other consumer-watchdogs. See what type of rating and feedback they have on record before you enter into a binding relationship.
Its also important to realize that different lenders have different terms. Their prices to lock in an interest rate, closing costs, origination fees, administration fees, underwriting fees etc. will be different. Sit down and line up various lenders offerings line by line so you can really see who is offering you the best package overall.
EXAMPLE HERE
It is completely possible to get the best current home loan interest rates. The key is making you an informed consumer who asks questions and gets straight answers. If you feel that something is awry, try another lender. Youre investing a lot of money in something that should be a YES, not a MAYBE.
Best mortgage rates Canada, the best fixed mortgage rates and the best refinance mortgage rates are available for you here with the help of Perry Pappas, an experienced mortgage broker in Canada.