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HUD reverse mortgages have been on the market for a long time. You may have heard about these senior products, but not read any details before. This article goes through the 5 main elements of this financial product. The HUD reverse mortgages are the most popular reverse mortgages ever. They have not suffered during the financial crises like many other loan types. HUD stands for US Department of Housing and Urban Development, which means security to the borrowers. The main idea of the HUD reverse mortgages is to arrange cash money to the seniors, who cannot either take more loan or to earn more. The only source of the extra income are their home equities. These people are called cash poor, but equity rich. 1. The Qualification. The qualification to the HUD reverse mortgages has been made really easy. The target is, that all senior homeowners, who have equity left in their homes can qualify. If a senior is age 62 or over, lives permanently in the home, he or she will qualify. Actually altogether 3 persons can be the borrowers, but all must fulfil the qualifications and be the owners. If a senior has a normal mortgage left, it will not mean, that he could not take the reverse loan. The system goes so, that a senior has to pay away the usual mortgage loan with his reverse loan, which will release more disposable cash to him. 2. The Accepted Home Types. To become accepted to the HUD reverse mortgages the home must be a single family home or 1 – 4 unit home, which has at least one room reserved to the borrower. Also some of the HUD approved condos and manufactured homes are accepted. Please ask the details from your state from the counselor. 3. The Home Ownership. The ownership does not change, when an owner takes the reverse loan. There has been a lot of false information in the public, that the lenders can take the homes, if the borrower cannot do the payments, but this is not true. If a borrower takes care about the insurance and tax payments and keeps the property in a good shape, he is safe with the ownership. When the payment time comes, a borrower moves away, sell the home or die, the home will be sold and the loan capital, interests and all cost will be paid from the selling price. If it does not cover the whole sum, the obligatory mortgage insurance will pay the missing part. This means, that a senior will never owe more than the value of the home. 4. The Position Of The Heirs? Another false information is, that the heirs will get nothing from the home value. That is not true either. The reverse loan, interests and costs will be paid back from the selling price of the home, but the payment will hardly eat the whole value. The difference goes to the borrower or to his heirs. 5. The Payment Options. The alternatives are the tenure, term, line of credit, modified tenure and modified term. The tenure pays equal monthly amounts for the life of the borrower, the term fixed monthly amounts for an agreed amount of periods, the credit line allows you to withdraw funds from the account when you want, the modified tenure and term are the combinations of these all. Juhani Tontti, B.Sc., Marketing. For more information about HUD reverse mortgages and the pros and cons of reverse mortgages please visit: reverse mortgages how they work
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HUD reverse mortgages, pros and cons of reverse mortgages, reverse mortgages how they work, what is a reverse mortgage, how does a reverse mortgage work,
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