Articles Tagged With: FHA Reverse Mortgage

March 22, 2017

Refinancing Your FHA Mortgage

There are many reasons why people refinance a home loan. Some do it to lower their interest rates, others may wish to cash in on the equity built up in the home over time. Still others might want to do upgrades or repairs to the home but don’t want to pay all the costs out-of-pocket. The reasons you refinance may vary, and for that reason there are a variety of choices when it comes time to consider an FHA refinance loan. Lower Interest Rates The FHA streamline refinance option lets borrowers apply for a loan using their original loan application data. There is no FHA requirement for a new credit check or appraisal. (Your lender may require one or both.) FHA streamline refinance loans must result in a tangible benefit | more...

March 1, 2017

FHA HECM Loans: A Reader Question

By Joe Wallace

FHA refinance loans include the FHA HECM loan option for qualified borrowers. A reader asked us a question recently on HECM loans; “How does the Non-Borrowing spouse prove or show legal ownership of the property to the lender after the last surviving HECM mortgagor has died?” The reader is referring to an FHA loan rule modification that came out in 2014 about the deferral period for FHA Home Equity Conversion Mortgages that involve a surviving, non-borrowing spouse. Mortgagee Letter 2014-07 states: “In the event the last surviving mortgagor predeceases a Non-Borrowing Spouse, the due and payable status will be deferred for as long as a Non- Borrowing Spouse continues to meet all the qualifying attributes stated in the above section. In addition, such Non-Borrowing Spouse must satisfy and continue to | more...

November 16, 2016

FHA Reverse Mortgage Counseling

By Joe Wallace

We addressed FHA reverse mortgages in a recent blog post, discussing several aspects of these home equity conversion mortgages. One thing that makes the FHA reverse mortgage program unique from FHA refinance loan options is that these types of loans (also known as FHA HECM loans) are only for qualified borrowers age 62 or older who own or almost own their homes outright. The FHA official site describes HECM loans as follows: “If you are a homeowner age 62 or older and have paid off your mortgage or paid down a considerable amount, and are currently living in the home, you may participate in FHA’s Home Equity Conversion Mortgage (HECM) program. The HECM is FHA’s reverse mortgage program that enables you to withdraw a portion of your home’s equity. You | more...

November 15, 2016

FHA Refinance Loans and HECM Reverse Mortgages

By Joe Wallace

There are two types of FHA loans borrowers should know about when considering their refinance loan options. One is a traditional cash-out or no cash-out refinance loan, and the other is a reverse mortgage, also known as an FHA HECM loan. HECM stands for Home Equity Conversion Mortgage. The standard refinance loan and FHA HECM options are very different and serve different needs, but depending on the borrower it may be good to be familiar with both. Typical FHA refinance loans involve situations where the borrower typically has an existing mortgage and applies for a new loan that pays off the original mortgage, creating a brand new monthly payment, loan term, etc. Depending on the terms of the loan cash back may or may not happen, but for cash-out refinancing | more...

What happens to my FHA loan in a natural disaster?

May 25, 2016

FHA Reverse Mortgages: Payout Options

By Joe Wallace

Recently we wrote about proposed changes to strengthen the FHA Reverse Mortgage loan program and about basics of the FHA Reverse Mortgage program. We left off with a promise to discuss how the reverse mortgage, also known as an FHA Home Equity Conversion Mortgage (HECM), pays out once the loan has closed. A HECM borrower’s payout (also known as a disbursement) depends on the nature of the HECM loan. The rules for cash back to the borrower differ based on whether the borrower has a fixed interest rate HECM loan or an adjustable rate HECM. The FHA/HUD official site states that borrowers who have adjustable rate HECM loans are eligible for the following payment options: Tenure-equal monthly payments as long as at least one borrower lives and continues to occupy | more...

May 19, 2016

What is an FHA Reverse Mortgage?

By Joe Wallace

In a recent blog post we wrote about the steps the FHA and HUD are taking to further improve the FHA Home Equity Conversion Mortgage (HECM) loan program. The FHA HECM, also known as a reverse mortgage or FHA reverse mortgage, is a different type of home loan than a typical “forward mortgage” for a new purchase or refinance on a previous mortgage. The FHA reverse mortgage or HECM is for qualified borrowers age 62 or older who either own their property outright (with the mortgage paid off in full and documentation of that paid-in-full status) or are very close to paying off the current loan. According to the FHA official site, HECM loans are a “…special type of home loan that lets you convert a portion of the equity | more...

January 21, 2016

Qualifying For An FHA Reverse Mortgage

By Joe Wallace

One commonly asked question about the FHA home loan program is whether or not FHA insures or guarantees reverse mortgages. The FHA does have a reverse mortgage loan program, called the Home Equity Conversion Mortgage or HECM for short. Who qualifies for an FHA HECM loan and what are the basic ground rules? To start, it’s very important to understand the difference between an FHA HECM loan and traditional refinancing. According to the FHA official site, “A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you.” FHA HECM loans are not like standard home equity loan or second mortgage | more...

January 14, 2016

FHA HECM Loan Facts

By Joe Wallace

The FHA single-family loan program includes reverse mortgages–a loan program where a borrower can apply for a loan that requires no monthly payments, offers cash back to the borrower, and is based on the value and equity in the home. If you are looking for a reverse mortgage, the FHA program might be just what you need. Here are some basic facts about the FHA reverse mortgage loan option: FACT: FHA reverse mortgages are known as Home Equity Conversion Mortgages or HECM for short. These two terms refer to the same thing when it comes to FHA reverse mortgages. FACT: FHA HECM loans are for borrowers aged 62 or older who either own their home outright or are very close to doing so. HECM loans are declared due when the | more...

January 13, 2016

FHA Refinance Loan Facts And Fictions

By Joe Wallace

If you are thinking about your refinance loan options in 2016, now is a good time to review some FHA refi facts. Planning for an FHA refinance loan is important, and if you start early the same way as preparing for the original purchase of your loan you may save yourself valuable time later on in the process. It’s important to take enough to time to review your recent credit history, make sure you have no late or missed payments in the 12 months leading up to the loan application, and make sure there are no errors or evidence of identity theft on your credit report. Here are some basic facts–and fictions–about FHA refinancing: FACT: FHA refinance loans are available for existing FHA loans and non-FHA mortgages alike. You can | more...

January 12, 2016

FHA Loans: Fact Versus Fiction

By Joe Wallace

FHA loans are available for a wide variety of purchases. Did you know that FHA mortgages are offered for town homes, condo units, mobile homes, and many other types of properties? There are some facts you should know about FHA mortgages as well as some fictions to avoid. Here are just a few: FACT: FHA loans are for most types of single-family residence classified as “real property”. That means homes that are (or will be) permanently fixed to a foundation that meets state/local building code and FHA minimum standards. Mobile homes, manufactured homes, modular housing and other types of homes may qualify if they meet FHA standards. However motor homes, houseboats and other types of vehicles that cannot be fixed to a permanent foundation will not qualify for an FHA | more...