Reverse mortgage is gaining widespread popularity in recent times. Reverse mortgage Arizona policies are currently receiving a boom among senior citizens of the country.
Reverse mortgage az programs are beneficial for the older generation in many ways but can also arise as a burden without proper guidance. Let us go through the necessary guidelines one must know before applying for the reverse mortgage programs.
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Table of Contents
Understanding the Term ‘Reverse Mortgage’
The first thing is to know what is a ‘reverse mortgage’; A mortgage loan secured by a residential property enabling the borrower to access the property’s debt-free value is known as a reverse mortgage.These loans are promoted to older residential owners and generally do not require any monthly mortgage payments. FHA/HECM programs are considered more reliable.
Qualification Requirements
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Age
The age requirement to get a
reverse mortgage loan insured
By FHA/HECM is strictly at least
62 years. But in most cases, we
see the age difference between
spouses which leaves them with
Choices:
Wait until both seniors get to the eligible age of 62.
The eligible spouse can apply for the FHA/HECM program alone. If you choose this alternative, then be aware of the consequences, such as:
If the older spouse passes away first who owned a reverse mortgage through FHA/HECM programs, the loan will become due and would need to get repaid. In this scenario, the other spouse is left with following choices :
- Sell the property and move out.
- Repay with the help of savings and a forward mortgage.
- Obtain a reverse mortgage for themselves after getting to age of 62.
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Ownership
The resident put for reverse
mortgage should be
your primary residence and
must be self-occupied.
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Age of the Property
The home put for reverse
mortgage should carry a
residual life of at least 20
years and should have
good maintenance.
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Counseling Session
You must attend the reverse
Mortgage az counseling
Sessions by a good FHA
counselor.
The First Step
After passing the qualification, you need to find out which Reverse mortgage Arizona program is right for you.To follow this, contact an experienced loan officer who is well knowledgeable about FHA Reverse mortgage az programs. He can give you all the needed information about the workings of reverse mortgage programs.
FHA Reverse Mortgage Arizona Program Highlights :
You do not have to make any mortgage payments if you are living in the home.
You may receive your money by
credit, a lump sum or monthly
installments.
program interest rates can be
either variable or fixed.
Reverse Mortgage
- Arizona counseling is available
- over the phone by FHA approved
- counselor at a cost of $125, which
- is paid to the reverse mortgage
- az counseling company.
A reverse mortgage az appraisal is usually $350 that can be paid directly to the appraiser.
All the other fees can be deposited into the FHA reverse mortgage.
The FHA reverse mortgage az is
a program that is a federally-insured home loan that allows Arizona seniors to benefit from their home’s equity as cash.
Methods of Equity Payments
There are three ways in which equity can be paid to the senior directly, such as :
- Life-time payments.
- In the form of one huge lump sum usually required during the medical emergencies.
- In line of credit that is held in an internet bearing account till the funds are required.
Reverse mortgage Arizona programs let you live in the premise without any repayment, unlike a traditional second mortgage loan or home equity loan.
FHA Reverse Mortgage and bad Credit
“Senior debt problems” are rising
in Arizona. According to the NCLC:
Bankruptcies among the senior population of Arizona has seen an increase with the progressing years. Data has shown that senior citizens over the age of 62 who have a loan-to-value ratio less than or about 60%; also have not paid their mortgage on time and are late by 30/60/90 days.
So, if you have bad credit and are late in your mortgage payments, you are still eligible for applying to FHA insured reverse mortgage az programs.
Loss of Medicaid Eligibility (LOME) risks
LOME risks come into play when the borrower accumulates assets over regulatory limits, making them ineligible for medical services.This may cause reverse mortgage lenders to face a potential lawsuit from customers.
Medicaid eligibility is a precious advantage for senior citizens in getting public healthcare assistance. Here’s how to avoid LOME risks :
- Get educated through reverse mortgage and Medicaid 101 meetings about LOME risks.
- Choose a lender who is well educated about the risks and recovery rules.
- Before applying for a reverse mortgage, have a brief consultation including financial-planning and elder-law advice.
- Be careful about payout options.
Conclusion
Reverse mortgage is an excellent initiative for helping older people to live their life with dignity but it also comes with its own disadvantages if used without proper guidance. We advice you to seek consultation of experts before investing in reverse mortgage programs.
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