Conventional & Government
Seniors over the age of 62 who are in need of cash have the opportunity to take advantage of a unique loan product called the reverse mortgage. If an eligible homeowner has equity in their home, a reverse mortgage can be used to obtain cash without having to make mortgage payments. Seniors often need extra cash for various expenses including home improvements, urgent medical expenses, in-home care, and normal day-to-day expenses. A reverse mortgage from Associates Home Loan of Florida, Inc. can be a valuable solution for Tampa seniors in need of extra cash for any reason.
The reverse mortgage gets its name because instead of a borrower making payments to their lender each month, the lender makes payments to the borrower. Unlike traditional home equity loans which are repaid monthly, a reverse mortgage does not have to be repaid until the borrower no longer occupies the home as their primary residence.
It is quite common for seniors and their families to have questions and concerns regarding reverse mortgages. At Associates Home Loan of Florida, Inc. we want to provide Tampa seniors and their families with the information and support they need during the reverse mortgage process. Let’s look at the reverse mortgage products available to seniors in Florida.
Home Equity Conversion Mortgage (HECM)
A Home Equity Conversion Mortgage (HECM) is the Federal Housing Administration’s (FHA) reverse mortgage product. This is the only reverse mortgage product available that is backed by the government. HECMs make up the majority of the reverse mortgages in the United States. In order to be eligible for the HECM program, applicants must meet a few qualifications.
Tampa HECM Borrowers must:
- Be at least 62 years of age
- Have a low mortgage balance or own their home outright
- Occupy the home as their primary residence
- Not be delinquent on any federal debt
- Be able to meet financial obligations including property taxes, insurance, Homeowner Association fees, etc.
- Participate in a reverse mortgage information session given by a counselor approved by the U.S. Department of Housing and Urban Development (HUD).
Income, current expenses, and credit history will all be reviewed to ensure that each applicant can meet their ongoing financial obligations. Each borrower’s property will also need to meet specific standards and flood requirements set forth by the FHA.
Different payment options are available depending on a borrower’s individual needs and whether they select a fixed or adjustable-rate loan. If a borrower chooses a fixed-rate reverse mortgage, they will only be able to receive a single disbursement lump sum payment. Borrowers will have a few additional options with adjustable-rate reverse mortgages including:
- Line of Credit
- Term – equal monthly payments for a set number of months
- Tenure – equal monthly payments as long as one borrower occupies the property
- Modified Tenure – line of credit and tenure combination
- Modified Term – line of credit and term combination
Proprietary Reverse Mortgage
Some borrowers may have needs that are not satisfied by a standard HECM. For those borrowers, proprietary reverse mortgages are available. Proprietary reverse mortgages are far less common that HECMs as they are not insured by the federal government. These are sometimes referred to as jumbo reverse mortgages because they are often used on higher-priced homes.
Associates Home Loan of Florida, Inc. is committed to assisting seniors and their families throughout Florida with all their reverse mortgage needs. If you have any questions about Tampa reverse mortgages or if you are ready to apply for your reverse mortgage, contact us today!