Articles in Category: Reverse Mortgage or HECM

April 28, 2011

FHA LOANS: HECM Loan Terms and Conditions

The FHA Home Equity Conversion Mortgage or HECM loan, also known as a reverse mortgage, has terms and conditions that must be clearly understood in order to get the most out of the loan. HECM loans have strict rules that must be followed in order to avoid violating the terms and conditions, which is why the FHA requires HECM loan borrowers to get counseling on reverse mortgages before they can be approved for an FHA HECM loan. The reason understanding these terms and conditions are so important has much to do with the nature of the loan itself–no payments are due from the borrower at any time unless he or she dies or sells the home. But if the borrower violates the terms of the loan, the lender is able | more...

April 12, 2011

FHA HECM Loans: Questions Seniors Should Ask

By Joe Wallace

The FHA reverse mortgage, also known as a Home Equity Conversion Mortgage or HECM loan for short, can be an important tool for many seniors. The FHA reverse mortgage is a home equity conversion loan that allows qualified borrowers age 62 and older to get a mortgage that has no monthly payments and is only payable when the borrower dies or sells the home. Like other FHA mortgages, FHA HECM loans have occupancy requirements and the borrower can only apply for a Home Equity Conversion Mortgage for the home they use as the primary residence. As with any major financial commitment, the HECM loan is not to be entered into lightly or without serious planning. That’s one reason why the FHA has mandatory counseling required as part of any HECM | more...

March 12, 2011

FHA Reverse Mortgages: What Makes Them Come Due?

By Joe Wallace

One of the most attractive features of an FHA reverse mortgage for some applicants is that the loan does not come due until the applicant dies or sells the property. There are no monthly mortgage payments on an FHA Reverse Mortgage, also known as an FHA Home Equity Conversion Mortgage. Instead, the loan is paid off as described above (when the owner dies or sells the home). The borrower–who must be age 62 or older–gets the proceeds from the loan to use as needed. But there are issues which could make a HECM loan due immediately–what could force the lender to call in the loan immediately? There are several scenarios. The terms of an FHA reverse mortgage require timely payment of property taxes, hazard insurance, and any other financial obligations | more...

February 25, 2011

Changes to FHA Refinancing Rules

By Joe Wallace

In our last blog post we discussed some changes to FHA refinancing loan rules. Effective immediately, the FHA requires all borrowers seeking streamline refinancing to make at least six mortgage payments on the property. There must also be a minimum of

February 15, 2011

FHA Reverse Mortgages: Should I Use An Estate Planner To Find a Lender?

By Joe Wallace

In our last blog post we discussed FHA Reverse Mortgages and the scammers who try to prey on people who want to apply for such mortgages. The FHA issues regular warnings against paying for services and information that's available for free from the FHA. Some third-party companies are fairly brazen in their attempts to sell services or information that's available free of charge, others are a bit more subtle in the approach, blurring the lines between scam and legitimate customer service.

February 15, 2011

Borrower Beware: FHA Warns of Reverse Mortgage Scams

By Bruce Reichstein

We've warned readers in previous blog posts about mortgage scams and third-party companies that try to charge consumers for services they can get for free. The FHA official site has plenty of warnings in its pages about being an informed borrower, advising FHA loan applicants to contact the FHA directly if they have questions about fees they should or shouldn't be paying.

February 14, 2011

FHA HECM Loans: When Do They Come Due?

By Bruce Reichstein

An FHA Home Equity Conversion Mortgage loan (or HECM for short) is available for qualified borrowers age 62 and older who have equity built up in their home and want to borrow against it. HECM loans are described by the FHA as being a great deal different than the traditional second mortgage for several reasons; "With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments...."

January 7, 2011

New FHA Guidance For HECM Loan Borrowers, Lenders

By Joe Wallace

FHA Reverse Mortgage Loans, also known as Home Equity Conversion Mortgages or HECM, provide a way for seniors age 62 and older to borrow against the equity in their homes. Under HECM loan rules, the borrower does not make monthly mortgage payments--the home is paid off when it is sold or when the borrower dies. But that lack of monthly mortgage payments may lead some borrowers to assume there are no payments due on the home whatsoever. This is not true--property taxes are still due, as are hazard insurance premiums or other commitments.

January 6, 2011

What Does The FHA Require For Reverse Mortgages?

By Joe Wallace

FHA reverse mortgages, also known as a Home Equity Conversion Mortgage, are a way for qualified borrowers to take out a home loan against the equity built up in them without having to worry about monthly mortgage payments. The FHA reverse mortgage program requirements are set up for a specific group of eligible borrowers. Do you know if you qualify? Here are the basic facts about FHA-insured Reverse Mortgages or HECM loans:

December 30, 2010

Refinancing with an FHA Reverse Mortgage

By Joe Wallace

FHA HECM loans are designed for borrowers who are 62 and older who want to take advantage of the equity built up in their homes. HECM, which stands for Home Equity Conversion Mortgage and is also known as an FHA Reverse Mortgage, allows qualified borrowers to apply for an FHA loan which uses equity as the security for the loan. HECM loans have no monthly mortgage payments. The borrower pays off the loan in full if the property is sold or the borrower dies. Because of the structure of FHA HECM loans, the borrower can use the proceeds from the loan as a line of credit, choose to get monthly payments instead, or a combination of the two.