How a reverse mortgage loan works using a home's equity.
How a reverse mortgage loan works and how to apply.
Whether seeking money to pay for medical treatment, finance a home improvement, buy long-term care insurance, or supplement income, many older Americans are turning to a "reverse mortgage." A reverse mortgage allows older consumers to convert the equity in their homes to cash while retaining home ownership.
With a "regular" mortgage, you make monthly payments to the lender. But with a reverse mortgage, you receive money from the lender and generally do not have to repay it for as long as you live in your home. In return, the lender holds some — if not most or all — of your home's equity.
Introduced in the late 1980s, reverse mortgages can help homeowners who are "house-rich-but-cash-poor" remain in their homes and still meet their financial obligations. The proceeds of the loan are tax-free, there are no minimum income requirements, and for most reverse mortgages, the money can be used for any purpose.
If you're considering a reverse mortgage, it's important to understand how the loans work and what your rights and responsibilities are.
Types of reverse mortgage loans:
the federally insured Home Equity Conversion Mortgage (HECM), administered by the Department of Housing and Urban Development (HUD)
single-purpose reverse mortgages, usually offered by state or local government agencies for a specific reason
proprietary reverse mortgages, offered by banks, mortgage companies, and other private lenders and backed by the companies that develop them.
To qualify for a reverse mortgage, you must be at least 62 and have paid off all or most of your home mortgage. Income is generally not a factor, and no medical tests or medical histories are required. If you seek an HECM, you also must undergo free mortgage counseling from an independent government-approved "housing agency." Financial institutions offering proprietary reverse mortgages may require similar counseling or homeowner education.
The amount you can borrow depends on your age, the equity in your home, the value of your home, and the interest rate. If it's an HECM, federal law limits the maximum amount that can be paid out.
You can be paid in a lump sum, in monthly advances, through a line of credit, or a combination of all three.
Section 226.33—Requirements for Reverse Mortgages
33(a)Definition.
1.Nonrecourse transaction. A nonrecourse reverse mortgage transaction limits the homeowner's liability to the proceeds of the sale of the home (or any lesser amount specified in the credit obligation). If a transaction structured as a closed-end reverse mortgage transaction allows recourse against the consumer, and the annual percentage rate or the points and fees exceed those specified under § 226.32(a)(1), the transaction is subject to all the requirements of § 226.32, including the limitations concerning balloon payments and negative amortization.
Paragraph 33(a)(2).
1.Default. Default is not defined by the statute or regulation, but rather by the legal obligation between the parties and state or other law.
2.Definite term or maturity date. To meet the definition of a reverse mortgage transaction, a creditor cannot require any principal, interest, or shared appreciation or equity to be due and payable (other than in the case of default) until after the consumer's death, transfer of the dwelling, or the consumer ceases to occupy the dwelling as a principal dwelling. Some state laws require legal obligations secured by a mortgage to specify a definite maturity date or term of repayment in the instrument. An obligation may state a definite maturity date or term of repayment and still meet the definition of a reverse-mortgage transaction if the maturity date or term of repayment used would not operate to cause maturity prior to the occurrence of any of the events recognized in the regulation. For example, some reverse mortgage programs specify that the final maturity date is the borrower's 150th birthday; other programs include a shorter term but provide that the term is automatically extended for consecutive periods if none of the other maturity events has yet occurred. These programs would be permissible.
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Review information was gleaned from the website, and is neither an endorsement by us nor an confirmation of content nor a warranty of any promises made by the website. Use the review information at your sole discretion and sole liability.
UnionNationalMortgage.com Review - Union National Mortgage Co. is an Equal Opportunity Housing Lender. Loans are available on a fair and equal basis regardless of race, color, religion, sex, familial status, national origin,military status, disability or ancestry.
At Union National, our goal is to create “raving fans” among our customers by consistently exceeding their expectations.
This means every loan application we process is given the personal and professional attention it deserves. Our promise to you, our valued customer, is to identify and recommend the best loan products and programs for your unique situation and to help you secure the best rates and terms available.
In addition, our team of dedicated and knowledgeable mortgage professionals is committed to handling your loan application as quickly and efficiently as possible, ensuring the best possible outcome for you and your family.
But don’t just take our word for it… Our commitment to serving our customers doesn’t go unnoticed. In fact, the National Community Reinvestment Coalition recently named Union National Mortgage Company as one of the best lenders for minority groups, women and buyers with low-to-moderate income.
State Bond Programs for First-Time Home Buyers: Owning a home is still a cornerstone of the American Dream. To help make that dream a reality for more people, many states offer special loan and assistance programs specifically for first-time home buyers. Most of these first-time buyer programs include government-backed and conventional mortgage loans. In addition, many states also offer grants and/or low-cost loans to limit the out-of-pockets costs associated with purchasing a new home. Funds from these special assistance programs are normally used to cover all or a portion of the required down payment and closing costs.
First-Time Home Buyer Programs: Who Qualifies? Most state bond programs for first-time buyers have specific restrictions regarding eligibility. While first-time buyer programs were originally created for those who have never owned a home before, in many cases those who have not had an ownership interest in their primary residence for the last three years are also eligible. Other common exceptions to these eligibility restrictions are veterans of the U.S. military and those who want to purchase a home within a “targeted area.” A targeted area is an economically distressed region selected by the U.S. Department of Housing and Urban Development (HUD) for future revitalization.
Other Common Borrower and Property Requirements: Each state with a first-time home buyer program establishes its own set of criteria for participation. For instance, borrowers may be subject to income limits and purchase price restrictions based upon a number of factors, such as the size of their household, the county where the residence is located and whether or not the property is situated within a recognized target area.
Other common considerations include the overall creditworthiness of the borrower and the size and type of the property in question. For example, the borrower may be evaluated based on his income, work history, accumulated assets and outstanding debts. In many cases, completion of an approved Home Buyer Education program is also required.
Should I Get Pre-Approved for a Home Loan? The short answer is… Absolutely! For a number of reasons, a pre-approval is a very important first step toward buying a new home.
There are several advantages to getting pre-approved for a home loan: Save Time. Getting pre-approved for a mortgage lets you know exactly how much house you can afford. This will allow you to focus on only those homes that meet your criteria - and your budget. Increase Odds of Acceptance. Sellers are more likely to accept a pre-approved offer than one that isn’t. This is because a pre-approval assures the seller that your offer is legitimate.
Close Faster. With a preapproved home loan a lot of the work is done in advance, which can speed up the entire closing process. This means you can be in your new home that much sooner!
(440) 234-4300
Union National Mortgage Co.
8241 Dow Circle West
Strongsville, Ohio 44136
Tel: 440-234-4300
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Review information was gleaned from the website, and is neither an endorsement by us nor an confirmation of content nor a warranty of any promises made by the website. Use the review information at your sole discretion and sole liability.
BridgeMortgages.com Review
Bridge Mortgages provides low rate home purchase loans, with 100% home loan financing, 80-20 combo mortgages with options for adjustable rates, interest only, or fixed interest rate terms of 30 and 40 years. Bridge Mortgages is an experienced lender from California, who offers loans in 44 states. Our experience has led us to innovative mortgage products for 1st time homebuyers.
Purchasing home is stressful enough, without having to worry about financing this investment. We deliver affordable purchase loans that will meet your expectations. When you are ready to become a homeowner, let Bridge Mortgages help you with 100% of the financing.
Bridge Mortgages provides the following purchase loan products with fixed or adjustable rate payment options:
Home Purchase Loans to 103% - Preserve your cash-flow. You can finance the cost of buying the house and keep your money in the bank.
Jumbo Home Loans - You can finance homes with jumbo mortgages from $417,000 up to $2,000,000 and still qualify for a competitive low rate that works within your budget.
Poor Credit Financing - Available from 500 credit scores and up, Bridge Mortgages offers people loans 1-Day out of Bankruptcy. If you are a homeowner with credit card debt, or an adjustable rate mortgage, look no further.
80-20 Combo Loan - You can avoid PMI (private mortgage insurance)& keep your savings in your bank. These 1st & 2nd combo loans offer an 80% first and 20% second mortgage that close concurrently for your home purchase.
FHA Home Mortgages - Take advantage of little or no money deposit requirements with these popular government loans. FHA guarantees their loans and the credit requirements are much easier than the conforming loans of Fannie Mae and Freddie Mac.
Bad Credit Lender - 100% Mortgages - Refinance Home Mortgage Loans: Bridge is a bad credit lender that provides home mortgage loans, 100% mortgages and refinancing countrywide with, VA loan, FHA purchase and no cost home loans. With over ten years of experience as a mortgage lender, we are able to offer the lowest 30-year fixed mortgage rates online. Choose from FHA, VA, conventional home mortgages and debt consolidation for good people with a questionable credit scores. Apply Now! We offer prime and sub-prime home loans, but our mission is to find a home loan for everyone regardless of their good or bad credit history.
Debt consolidation loans have helped thousands of our clients reduce their monthly expenses with lower fixed rates that bring their payments and obligations down to an affordable level. Bridge Mortgages provides homeowners a complete solution with debt consolidation loans for first or second mortgages. Our consolidation loan options were created to help you lower your monthly payments and pay off high interest debts like credit cards and consumer loans.
Lower Payments with Consolidation Loans with Fixed Interest Rates: Bridge Mortgages now offers consolidation loan products that require almost no equity in your home. Consolidate debts and borrow up 80 to 100% now! Homeowners can consolidate debt and wrap all of your bills into a loan with fixed, simple interest rates that may offer additional tax incentives. Tax deductions should not be taken lightly, because they can save you money and debt consolidation loan opportunities are not available to all consumers any more.
Choose between refinancing and home equity loans to get cash out for multiple purposes. Bridge Mortgage is a countrywide lender who provides online home equity loans for debt consolidation and 100% home equity loan refinancing. Borrowers can get cash out of their home for consolidating bills and financing business ventures or home improvements. Home equity loans provide new opportunities for homeowners to get a loan without having to go through the home refinancing step of revising their first mortgage.
* Closed End 2nd's
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* Interest Only Home Equity Credit
* FHA - 95% CLTV's to w/580 Score
* Loan amounts up to $500,000 w/ 700 Score
* Fixed Home Equity Loans
* Reduced Documentation Available
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* No Equity Loan Refinancing
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877.236.3836
Loan Origination Center
9450 Mira Mesa Blvd
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Equity
2ndmortgage
Don't
rush into a second mortgage without checking out the two types. One is a fixed-rate
home equity loan, and the
other is an adjustable-rate home equity line of credit (HELOC). A home equity loan is a good
choice when the borrower knows exactly how much money is needed. If for example,
someone wants to renovate a home and does not know how much money it will cost,
a flexible HELOC may be a good choice. This type allows a credit line and the
borrower can apply for a larger amount of money in case a project turns out to
be more expensive, then the money would already be available.
There
can be a danger to going for too much money on a HELOC, it means taking from the
available home equity. When too much is withdrawn, it could affect getting more credit, or
affect refinancing the mortgage in the future. Interest rates of a HELOC is tied to an
index and it can chance each day. The good news is that there is a cap, which is
a maximum amount that the rate can increase during the life of the loan. Make
sure the payments can be made and you are not getting into debt. Lenders must
give an estimate to second mortgage borrowers, it will give all details about
any fees involved with the loan. It is important to read the details and make
sure you understand all of them and the charges that will apply.
A
second mortgage could be used to consolidate
debt. This has helped many consumers payoff a lot of high interest debts.
Second mortgages usually have lower interest rates. The important thing is to
make sure new debts are not acquired until the loan is repaid, or there may be
added debt troubles. Using a second mortgage to pay off thousands of dollars in
debts, is fairly common. Millions of people are able to use the loan as a way to
pay too many debts that must be shuffled from one paycheck to another, instead
they have only one debt payment, their second mortgage payment. It works when
people off the mortgage loan and stay clear of making new debts. However, some
people gain new debts while they are paying off a second mortgage loan that was
used for bills.More debt problems could carry the risk of loosing a home if the
loan is not paid.
Don't want a
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Mortgage Refinancing and Equity Options: Use your home as your personal loan resource. Apply for a low interest 2nd mortgage loan. A home equity loan can be used to pay for home remodeling to improve your home's value, or as a debt consolidation loan to payoff bills and get rid of high interest fees or to buy a boat or RV or to go on vacation.
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Reverse mortgage - Information about the benefits of a reverse mortgage.
Home equity loan - Refinance your first mortgage and take cash out at closing.
Home remodeling loan - Use your home's equity to finance a remodeling project and increase home value.
Mortgage refinance loan - For a home equity line of credit, you may want to think about a traditional second mortgage loan.
Mortgage equity cash loan: Home equity is the dollar-value difference between the balance you owe on your mortgage and the value of your property. When you refinance for an amount greater than what you owe on your home, you can receive the difference in a cash payment (this is called a cash-out refinancing). You might choose to do this, for example, if you need cash to make home improvements or pay for a child?s education. Remember, though, that when you take out equity, you own less of your home. It will take time to build your equity back up. This means that if you need to sell your home, you will not put as much money in your pocket after the sale. If you are considering a cash-out refinancing, think about other alternatives as well. You could shop for a home equity loan or home equity line of credit instead. Compare a home equity loan with a cash-out refinancing to see which is a better deal for you.
