![]() In addition, the repayment amount can never exceed the value of the home.īorrowers can take the loan as a line of credit, a lump-sum payment, fixed monthly payments or a combination of these. When the loan is repaid, any remaining equity is distributed to the borrower if he or she is alive or to the late borrower’s estate. The best feature: The loan doesn’t have to be repaid until the homeowner moves, sells or dies. This type of loan allows seniors to pull out the equity in their home in the form of a loan without selling or giving up title. Or maybe you have some savings but don’t want to touch that pot of money. But if you’re 62 or older and find that you are cash poor and house rich - meaning you have a lot of equity in your home, but little or no savings - this is a product that’s worth looking into. When this happens, some or all the equity in the property no longer belongs to the borrowers, who may need to sell the home or otherwise repay the loan balance.As of the first of the year, older homeowners can tap into a larger portion of the equity in their homes with a reverse mortgage because of new, higher federal loan limits, according to the National Reverse Mortgage Lenders Association.Īlthough growing in popularity, reverse mortgages are still an unknown financial product for a lot of elderly homeowners. When the last borrower or eligible non-borrowing spouse dies, sells the home, permanently moves out, or fails to comply with the loan terms, the loan becomes due and payable (and the property may become subject to foreclosure). GoodLife Home Loans charges interest on the balance, which grows over time. GoodLife Home Loans may charge an origination fee, mortgage insurance premium (where required by HUD), closing costs and servicing fees, rolled into the balance of the loan. Not all interest on a reverse mortgage is tax-deductible and to the extent that it is, such deduction is not available until the loan is partially or fully repaid. ![]() However, a set-aside account can be set up for taxes and insurance, and in some cases may be required. Although these costs may be substantial, GoodLife Home Loans does not establish an escrow account for these payments. Reverse mortgage loan terms include occupying the home as your primary residence, maintaining the home, paying property taxes and homeowners insurance. To process your request for a reverse mortgage, GoodLife Home Loans may forward your contact information to such lenders for your consideration of reverse mortgage programs that they offer. GoodLife Home Loans works with other lenders and financial institutions that offer reverse mortgages. ![]() Speak with your loan officer to determine if these fees apply.Ī reverse mortgage increases the principal mortgage loan amount and decreases home equity (it is a negative amortization loan). They must also maintain the home’s safe, working condition to the minimum standards established by the Federal Housing Administration (FHA). Borrowers must also keep up with property taxes, applicable Homeowner’s Association (HOA) fees, and any other financial obligation that could result in a lien on the property. Ongoing costs associated with a reverse mortgage include the lender’s servicing fee and mortgage insurance. Borrowers may also be charged for expenses incurred by a third party at the time of close such as, a credit report fee, flood certification fee, escrow closing fee, document preparation fees, recording fees, courier fees, title insurance, pest inspection, and property survey. There are several types of costs that may be deducted from your available loan proceeds, such as the appraisal fee, origination fee, and the initial mortgage insurance premium. ![]() We pass the savings directly onto you, so you’ll spend less on third-party expenses and access more of your home equity in the form of cash proceeds. At GoodLife, we’re able to cut out the middlemen and originate the loan entirely in-house. ![]()
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