Maricopa Arizona Home Equity Conversion Mortgage - Reverse Mortgage

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Maricopa
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US-01685BG
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Description

A reverse mortgage is a loan from the U.S. Government for 50% to 75% of the value of a home owned by a homeowner aged 62 and older. Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to the homeowner. The funds from a reverse mortgage are tax-free. The loan doesn't have to be repaid in the homeowner's lifetime, however, when the homeowner dies, the money received plus approximately 4% interest is repaid by their estate. The loan is repaid when the homeowner ceases to occupy the home as a principal residence, due to the homeowner (the last remaining spouse, in cases of couples) passing away, selling the home, or permanently moving out.

Maricopa Arizona Home Equity Conversion Mortgage (HELM), also known as a Reverse Mortgage, is a specialized loan product available to homeowners aged 62 or older. It allows eligible individuals to convert a portion of their home equity into cash, while still retaining ownership of their property. A Maricopa Arizona Home Equity Conversion Mortgage (HELM) offers several key benefits for seniors looking to tap into their home's equity. One of the primary advantages is the ability to receive tax-free funds, which can be used to supplement retirement income, cover medical expenses, pay off existing debts, or finance home improvements. There are different types of Maricopa Arizona Home Equity Conversion Mortgages (Helms) available to cater to varying financial needs and circumstances: 1. Fixed-Rate Reverse Mortgage: This type of HELM provides a lump sum payment at closing, ensuring a fixed interest rate for the life of the loan. It offers stability and predictability for borrowers who prefer a one-time payment. 2. Adjustable-Rate Reverse Mortgage: With an adjustable-rate HELM, borrowers have the option to receive funds as a line of credit, monthly installments, a lump sum, or a combination of these. The interest rate can vary over time, based on market conditions, but there is typically a cap to protect borrowers from extreme fluctuations. 3. HELM for Purchase: This type of HELM allows seniors to use a reverse mortgage to purchase a new home. It enables older adults to downsize, relocate closer to family, or find a more suitable living situation without the need for immediate cash investments. To qualify for a Maricopa Arizona Home Equity Conversion Mortgage (HELM), potential borrowers must meet certain criteria. These include being at least 62 years old, owning a primary residence (which can include single-family homes, townhouses, approved condominiums, or certain manufactured homes), and having sufficient equity built up in the property. The loan amount available through a Maricopa Arizona HELM is determined by various factors, such as the borrower's age, the appraised value of the property, and current interest rates. Additionally, borrowers are still responsible for maintaining the property, paying property taxes, and homeowners insurance. It is crucial for interested homeowners to consult with a reputable mortgage lender, financial advisor, or HUD-approved housing counselor to fully understand the terms, obligations, and implications of a Maricopa Arizona Home Equity Conversion Mortgage (HELM). These professionals can provide personalized guidance and help individuals make informed decisions regarding this unique financial tool.

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FAQ

Reverse mortgages have two primary qualification criteriayou must be at least 62 years old, and you must own a significant amount of equity in your home. 1 While the specific percentage of equity required varies across lenders, typically you'll need at least 50%.

Reverse mortgages are increasing in popularity with seniors who have equity in their homes and want to supplement their income. The only reverse mortgage insured by the U.S. Federal Government is called a Home Equity Conversion Mortgage (HECM), and is only available through an FHA-approved lender.

In a reverse mortgage, LTV is not a stand-alone feature. That is, there is no stated maximum and the ratio is influenced by other factors; however, in most cases it works out to a range of roughly 50 to 65 percent.

Borrowing from Home Equity with Reverse Mortgage Loans Government insured reverse mortgages, also known as an equity home release or a Home Equity Conversion Mortgage (HECM), are quickly becoming the top choice for equity-rich senior homeowners interested in taking equity out of their home.

The amount of money you can borrow depends on how much home equity you have available. You typically cannot use more than 80% of your home's equity based on its appraised value. As of 2018, the maximum amount anyone can be paid from a reverse mortgage is $679,650. However, most people will be paid much less.

You must own your home outright or have at least 50% equity in your home to be eligible for a reverse mortgage loan. Even if you owe some money on your existing mortgage, you may be eligible for a reverse mortgage.

Suze Orman on her CNBC show recently responded to a viewer question by stating that a reverse mortgage is a better option than selling stocks.

You must own your home outright or have at least 50% equity in your home to be eligible for a reverse mortgage loan. Even if you owe some money on your existing mortgage, you may be eligible for a reverse mortgage.

You can expect to need at least a 50% equity stake in your home to use a reverse mortgage, though the exact share varies by lender and the specific reverse mortgage program you're using. Generally, the more equity you have in your property, the more cash you'll be able to access through a reverse mortgage product.

Inform the lender you have a reverse mortgage and want a HELOC. To take out a HELOC, you must have remaining equity in the home. Since you can't convert the reverse mortgage to a HELOC, you must pay off the mortgage. The loan balance can be rolled into the HELOC, resulting in a higher monthly payment.

More info

A Home Equity Conversion Mortgage, or HECM, is a flexible financial product designed for homeowners aged 62 and older. In the HECM program, a borrower can live in a nursing home or other medical facility for up to 12 months before the loan becomes due and payable.In a HECM, you apply for the loan, talk with a HUDapproved counselor and receive an offer.

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Maricopa Arizona Home Equity Conversion Mortgage - Reverse Mortgage