Answers To Common Reverse Mortgages Questions – 7th Level Mortgage Reverse (HECM) Loans
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Federal Housing Administration
Federally Insured Benefit HECM (Reverse Mortgages) Program through 7th Level Mortgage
You may be eligible to participate in the U.S. Department of Housing and Urban Development (HUD) Home Benefit Program with Reverse Mortgages. This HUD program is designed to benefit seniors age 62 and above with their financial needs. There are no minimum income or credit requirements to participate. You may be eligible for this Federally Insured HECM Program from 7th Level Mortgage, LLC.
■ Explanation of Rights and Benefits:
- Your current mortgage will be paid off. You will no longer have any mortgage payment. Your home is secured by Federal law and you and/or your spouse can stay in your home for the rest of your live(s). In addition, you can still pass your home on to your children and/or beneficiaries.
- All of your other debts can be paid off immediately. This includes credit cards, auto loans and any other debts you may hold.
- This federally insured program allows you to receive up to $400,000 in one lump sum payment or as monthly payments for the rest of your life. This money is tax free and it does not affect your Social Security, Medicare or private retirement benefits. There are no restrictions on the use of your money.
■ Limitations and Restrictions:
- Program funds are authorized by Congress annually. These funds are limited and may not be available in the future.
- This HUD program is limited to homeowners age 62 and above. Your home must be your primary residence.
- The amount of money available to you is based on the value of your home and your age.
- Although your mortgage and other debts are paid off, you still are required to pay your real estate taxes and other conventional payments like utilities for as long as you own your home.
- You must receive consumer information from a HUD-approved counseling source
Interested in a 7th Level reverse mortgage in NJ, PA, DE and FL? Ask one of our Reverse Mortgage specialists about our Reverse Mortgage program for seniors. Also known as a HECM (Home Equity Conversion Mortgage) is a financial tool that was created specifically for homeowners 62 or older.
You can use the proceeds from a reverse mortgage any way you want. For example, you can pay off an existing mortgage, make home repairs, pay for home health care, or provide a cash cushion for financial security.
It is comforting to know that the government-insured reverse mortgage is extremely safe and secure. With a reverse mortgage you can never be foreclosed upon for failure to make monthly mortgage payments because no monthly mortgage payments are required.
The FHA reverse mortgage is specifically designed to help you stay in your home for the long term. Talk to your reverse mortgage specialist to review these new and important safe homeownership guidelines.
As an added safeguard, before a reverse mortgage can be processed, you will be required to discuss, by phone or in person, the Reverse Mortgage Program with a counselor from a government approved non-profit counseling agency. This gives you an added opportunity to ask questions and be certain of your choice. We will provide you with a list of counselors so that you can speak with the required agency.
If you have not already received a personalized estimate of the amount of money available to you, contact a Reverse Mortgage Specialist at 856-630-0220 for a free, no obligation estimates.
- Pay off existing mortgage
- Pay off credit card debts
- Pay for home health care
- Pay for prescription drugs
- Provide a cushion for future security
- Make home repairs or improvements
- Live a more comfortable lifestyle
- Go on vacation, visit the grandchildren
With a reverse mortgage, you remain in control. You decide how much of the available funds to use. You decide the way in which you receive the funds. Because of the unique nature of the reverse mortgage, you do not have to repay this loan as long as you live in your home.
In addition, because you are not making mortgage payments, the loan balance will increase over time.
Call a Reverse Mortgage Specialist at 856-630-0220 to review your specific costs.
Reverse mortgages can be obtained for many different types of homes, including single-family residences and townhomes. Condominiums that meet specific government guidelines and some mobile homes built after 1976 may also qualify for a reverse mortgage.
A single lump sum cash payment.
A line of credit for a specific dollar amount. In fact, the amount of money available in the line of credit is designed to actually increase over time. This can be beneficial, ask your reverse mortgage specialist to show you how this works.
A monthly cash advance for a specified period of time or an amount guaranteed for as long as you live in your home.
A combination of any of these options. Payment options may also be changed upon request to reflect changing needs.
Reverse Mortgage Specialists at Retirement Life Funding can assist you in designing a customized plan to best utilize your available funds.
Government-insured reverse mortgages, also known as Home Equity Conversion Mortgages (HECM), are reverse mortgages insured by the Federal Government. As a result, the government ensures that you receive all of your scheduled payments. In addition, with the federal insurance, you are protected from any housing market declines because the total amount of debt that will have to be repaid if the home is sold can never be greater than the value of your home. However, with a HECM reverse mortgage the government has established lending limits that can limit the amount of money available for some high value homes.
A private reverse mortgage product is not insured by the Federal Government. As a result, private reverse mortgages are not subject to the same lending limits and can result in more funds available for high value homes.
Additionally, a built-in insurance from the Federal Government protects your family and heirs from housing market declines. With this federal insurance, the total amount of debt that will have to be repaid if the home is sold can never be greater than the value of your home. So, in the unlikely event that your home value does not repay the total loan balance, your family and heirs are protected.
In fact, you can generally make payments to your reverse mortgage and then re-borrow that money if you choose. The reverse mortgage is designed to adjust to a changing life.
But, no mortgage payments are ever required.
A reverse mortgage works similarly to a conventional, forward mortgage but can provide a better option for purchasing a home because there are no monthly mortgage payments. To purchase a home with a reverse mortgage, you make a down payment on the home and borrow the remaining money from a lender. But, unlike a conventional mortgage, with a reverse mortgage, you do not make any monthly mortgage payments. Instead, the loan balance increases slowly over time and is eventually paid off when you no longer live in the home. With the reverse mortgage, you can purchase a home and improve your standard of living without having to make monthly mortgage payments.
- The security of knowing that you never have to make a mortgage payment. With a reverse mortgage you have the freedom to choose whether you make payments to maintain the level of equity in your home. With a conventional home equity loan you have no choice, you must make monthly payments.
- With a reverse mortgage, you eliminate mortgage payments on your home. A conventional loan will either add an additional payment or merely substitute one mortgage payment for another.
- With a reverse mortgage, the amount of your income is irrelevant. There are no income requirements. In fact, you do not have to have any income.
- With a reverse mortgage, your credit rating is also irrelevant. If you have had some financial setbacks, it does not matter.
- For many individuals, the interest rate from a reverse mortgage is lower than the interest rate they could qualify for from a home equity loan. Like other financing instruments, reverse mortgages incur costs and fees and the interest rate is only one element to be considered when thinking about reverse mortgage products.
- If you choose a line of credit on the reverse mortgage, there is no risk that your available line of credit will be withdrawn. You are guaranteed that the money will be available when you need it. Generally with a home equity line of credit, the bank can close or reduce your available line of credit at any time. This can happen just when you have the need for the funds.
A Reverse Mortgage is a type of home equity loan that allows you to convert some of the equity in your home into cash while you retain home ownership. A Reverse Mortgage works much like traditional mortgages, only in reverse. Instead of making a monthly payment to your lender, the lender pays you. You do not make any payments on your reverse equity loan when you are in it. Funds obtained from a Reverse Mortgage may be used for any purpose such as home improvement, vacation, a new car, or savings.
To qualify for an Reverse Mortgage, you must own your home. The Reverse Mortgage funds may be paid to you in a lump sum, in monthly advances, through a line-of-credit, or in a combination of the three, depending on the type of Reverse Mortgage and the lender. The amount you are eligible to borrow generally is based on your age, the equity in your home, and the interest rate you qualify for.
Because you retain title to your home with a Reverse Mortgage, you also remain responsible for taxes, repairs, and maintenance. Depending on the plan you select, your Reverse Mortgage becomes due with interest either when you permanently move, sell your home, die, or reach the end of the pre-selected loan term. The lender does not take title to your home when you die, but your heirs must pay off the loan. The debt is usually repaid by refinancing the loan into a forward mortgage (if the heirs are eligible) or by using the proceeds from the sale of your home.
Reverse Mortgage Benefits
You choose one of the following payments each month:
- No payments are required as long as you live in your home.
- Income received from your Reverse Mortgage is usually tax-exempt (consult your tax adviser) and does not affect regular Social Security or Medicare benefits, but may affect eligibility for other types of government assistance.
- You retain ownership of your home.
- You can use the proceeds to pay off an existing mortgage and eliminate your monthly mortgage payments.
- Reverse Mortgages provide you with a source of income that can be used to improve your standard of living and maintain your independence.