More Details on FHA Reverse Mortgages
Now that you have read the initial qualifications of the FHA reverse mortgage, before you get in your car and drive to your loan officer’s office or call on the telephone let’s finish discussing all the pertinent details about FHA Reverse Mortgage. Wouldn’t you be embarrassed if you went at this stage and they asked you several different things that would be revealed later in this blog that eliminated you from qualifying? It’s very important that you always get all of the details before acting too fast. That’s a tip for any area of your life, not just mortgages.
From the different stories that I read several months ago, I could never ascertain what types of homes were available for a FHA Reverse Mortgage so I am going to elaborate on that. Homes must be a single family dwelling or a two-to-four unit property that you own and occupy. It appears that you have to own the home and live there, not just own the home. Townhouses, detached homes, units in condominiums and some manufactured homes are eligible. This is another area where you want to verify with the HUD- approved counseling if your residence would be available depending upon the type of dwelling. This leads me to believe all types of homes don’t qualify.
Since we know this type of loan is for elderly adults, seniors if you will a concern that I had was would they be actually leaving a bill to their surviving children, especially if the home was not paid off. Remember an elderly person 62 years of age or older can receive a FHA Reverse mortgage. This is what happens, when the homeowner sells his or her home or no longer use it for their primary residence. They will have to repay the cash received from the reverse mortgage, plus interest and other fees to the lender. The remaining equity in the home, if any belongs to the owner or their heirs. None of the assets will be affected by HUD’s reverse mortgage loan. Additionally, which I believe is great and was a concern of mine was if the debt could be passed along to the estate or heirs and fortunately it cannot.
I would like to point out a concern that came to my mind. Wouldn’t one of the reasons an elderly person potentially takes a reverse mortgage would be to help with additional medical bills or something of that nature? I say this because if the homeowner sells his or her property and no longer use it as their primary residence, they are now going to be hit with all these different financial obligations that they might not have planned on. Of course that means, prior to getting this type of loan you must ensure you are able to manage it, including if you sell your primary residence. Do not take on more than you can handle or you will be miserable.
Maybe you are a reader and wondering if you can still apply for a FHA reverse mortgage if you current loan is not an FHA loan. From what I read on the Department of Housing and Urban Development you don’t have to because your new reverse loan will be a FHA-ensured loan.
What do you think of FHA Reverse Mortgages now that you have all this information?
Taffy Wagner
