In order to answer the question of how can I qualify for an HECM Reverse Mortgage, there many factors to consider beyond the basic eligibility requirement of age 62 or older and the home being the primary residence. The property must be fully owned or have an existing mortgage of not more than 65% of the market value. While there is no credit check or income eligibility requirement, and Social Security, Medicare/ Medicaid and other public assistance income is not counted in determination of the loan amount, if the monthly payment is kept in a bank account past the month in which it is received, these benefits become liquid assets thereby having a bearing on future payments.
How HECM Reverse Mortgage is Calculated
Another important factor to consider in determining the amount of HECM Reverse Mortgage is that the age of the youngest homeowner is used to determine the actual loan amount . If electing to receive a ‘lump sum’ HECM Reverse Mortgage, a line of credit is required resulting in higher loan interest fees. Real estate taxes, homeowners insurance and up keep expenses are the responsibility of the borrower.. A default in any of these expenses can result in immediate termination of the contract between the borrower and the lender.
HECM Reverse Mortgage Counseling Required
The borrower must participate in a ‘counseling session’ covering all stipulations before entry into the HECM Reverse Mortgage contract. Counseling session fee can range from $100 to $125. During the counseling session the borrower will be advised that mortgage insurance must be at least 2% of the appraisal value, and that there is a monthly service fee of $25 to $35 , and the initial fee involved in setting the HECM Reverse Mortgage application in motion runs around $15,000 which must be paid up-front.
Related posts: