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FHA Insured Reverse Mortgages What Is Different |
| By: Jenifer G |
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| The governement insured option for reverse mortgages opens a new way to go for reverse mortgage.Try this out. (PRWEB) February 8, 2005 -- Reverse mortgages issued by the HUD are called FHA insured reverse mortgages. It is more popular because the government insures your mortgage. Even if the lender defaults you will get your monthly payment in time. To be eligible for this scheme you need to be at least 62 years of age and should have a house which should either have no lien attached or a very small amount which can be paid off by the mortgage. The other important value addition is that you must undergo counseling from a HUD-approved counseling agency and family members are also encouraged to join in these sessions. There is a limit on the amount you can borrow based on a HUD formula. This is based on: •Age of the youngest borrower •Interest rate of the day •Value of the house(The appraised value or purchase price whichever is lesser) You have to pay $300 upfront during the closing. The other costs can be assimilated into the loan balance. The amount you receive can be availed in six ways: •Lump sum- all at a time •Term- monthly cash advance fixed for a period of time •Tenure- monthly cash advance as long as you occupy the house •Modified term-a portion is kept aside to be borrowed on a line of credit and the rest can be got cashed monthly for a fixed period of time and then can go for either of the ways alone. •Modified tenure- same as modified term , only it is applicable to the whole term and not a fixed time period •Line of credit- you can draw any amount and whenever required from this account(within the home equity limits) There is very little or no fee required in changing the payment method and you can change it as often as needed. An FHA insured reverse mortgage comes only with an ARM and the rate affects not the monthly payment but the growing loan balance. So, this is one way of opting for a reverse mortgage. For the basics of reverse mortgage you can log onto: http://www.mortgagekb.com http://mortgagekb.com/reverse-mortgage.html |
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