Reverse Mortgage Loan Programs
A home equity loan program for persons 62+ designed to help homeowners tap into the equity in their homes.
A Reverse mortgage loan is insured by the Federal Housing Administration (FHA) and is part of the Home Equity Conversion Mortgage (HECM) program. A Reverse mortgage is only available to homeowners who have built up considerable home equity are 62+ years old. Proceeds of the loan may be taken in monthly payments, a lump sum, left on a line of credit or a combination of these methods. If you remain in your home, you are not required to make monthly payments on a reverse mortgage. Taxes, insurance, homeowner association dues, and other assessments must be kept current by the homeowner, but nothing is due on the reverse mortgage until the last borrower permanently leaves the home.
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The most popular, and one offered through Tidewater Home Funding, is the FHA-backed Home Equity Conversion Mortgage (HECM). A HECM is a non-recourse loan where borrowers will never owe more than the value of the property. A HECM loan may be used on a homeowner’s existing home or on the purchase of a new home. The borrower must pay required taxes, insurance, and if applicable, HOA for all loan options. Additional Reverse mortgage programs include:
Payment of Loan Proceeds: The borrower receives the loan money as a line of credit, monthly installments, a combination or both, a lump sum, or the payment retires an existing mortgage.
Interest Rate: The borrower chooses between a Fixed-Rate or an Adjustable-Rate Mortgage (ARM) loan program. A Fixed-Rate program is only available with the lump sum payment option.
Purchase: Allows the borrower to purchase a principal residence and requires less upfront investment than an all-cash purchase.
Refinance: Allows the borrower to convert one HECM loan into another HECM loan which is usually done to lock in a lower interest rate or to borrower more cash if the home has increased in value.
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Some benefits a reverse mortgage loan program offers includes:
Requirements for a reverse mortgage loan include:
In addition to program requirements, it’s important to understand the following features of a reverse mortgage:
Get in-touch with one of our expert reverse mortgage loan officers today.
CONTACTThis is the process of determining whether a customer has enough cash and sufficient income to meet the qualification requirements set by the lender on a requested loan. A pre-qualification is subject to verification of the information provided by the applicant. A pre-qualification is short of approval because it does not take account of the credit history of the borrower.
The pre-approval process is much more complete than pre-qualification. For pre-qualification, the loan officer asks you a few questions and provides you with a pre-qual letter. Pre-approval includes all the steps of a full approval, except for the appraisal and title search. Pre-approval can put you in a better negotiating position, much like a cash buyer.
Usually, people refinance to save money either by obtaining a lower interest rate or by reducing the term of the loan. Refinancing is also a way to convert an adjustable-rate mortgage loan to a fixed-rate loan or to consolidate debts. Refinancing can be a complex topic, connect with one of our local loan officers today.
A rate lock is a contractual agreement between the lender and buyer. There are four components to a rate lock: loan program, interest rate, points, and the length of the lock.
Both income and assets are disclosed and verified, and income is used in determining the applicant's ability to repay the mortgage. Formal verification requires the borrower's employer to verify employment and the borrower's bank to verify deposits. Alternative documentation, designed to save time, accepts copies of the borrower's original bank statements, W-2s and paycheck stubs.
It is the list of settlement charges that the lender is obliged to provide the borrower within three business days of receiving the loan application.
A loan eligible for purchase by the two major Federal agencies that buy mortgages, Fannie Mae and Freddie Mac.
A mortgage larger than the maximum eligible for conforming purchase by the two Federal agencies, Fannie Mae and Freddie Mac.
It is an upfront cash payment required by the lender as part of the charge for the loan, expressed as a percent of the loan amount; e.g., "2 points" means a charge equal to 2% of the loan balance.
Your local lending partner, our team strives to exceed your expectations before, during and after the mortgage process.
Reach out to our team of local mortgage loan officers and take the initial step towards homeownership. Our team is ready to assist you throughout the process, offering you the necessary information and guidance to help you make informed decisions for your unique needs. Don't delay any longer - contact our team today.
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*Not a commitment to lend. Calculation estimates are hypothetical and intended for educational purposes only. Additional fees and costs, such as taxes and insurance, may not be included and may be different based on the loan program. Actual payment obligation may be higher. Loan programs, interest rates, loan terms and conditions are subject to change and may vary based on market conditions and individual circumstances. If refinancing an existing loan, the total finance charges may be higher over the life of the loan. For more information, please consult with one of our licensed loan officers.