Anyone over the age of 62 with equity built up in their home may be able to supplement their income and establish an emergency fund with the help of the Department of Housing and Urban Development. The HUD reverse mortgage a way to take out the equity in your property to help you with your monthly bills and set aside a fund to assist in case of an emergency. The concept of a reverse mortgage may be new to some so an explanation may be needed.
When making an application for HUD reverse mortgages the common documents and papers relevant to a regular mortgage are needed. An applicant needs to satisfy certain requirements. Amongst these are that your house must be occupied by the borrower and should be either a single family home or condominium with not greater than 4 apartments. One apartment must be occupied by the applicant as his primary dwelling. Your house must be possessed outright, or have a very small home loan pay back which will be paid from the earnings of the reverse mortgage. Furthermore HUD mandates that the borrowers undergo a credit and debt counseling service. This is not a free of charge training program and the fee must be paid by the borrower. When these requirements are fulfilled the application may proceed.
When accepted for a reverse mortgage loan a home needs to undergo the normal procedure of assessment involved in a typical mortgage loan. The mortgage loan would have interest accumulating throughout its term and interest rates and assessment of the residence becomes factors throughout the approval process.
When the mortgage loan is in place the home owner has choices of getting a monthly sum for the borrower’s life or perhaps for a term of several years. Additionally there is an alternative of putting aside a fund that may be drawn down to cover emergencies, similar to a home equity line-of-credit.
The mortgage is paid back at the time the owner no longer resides at the property. Payback is in full with all accrued interest. The HUD reverse mortgage may not be for everyone but does offer an opportunity for some homeowners to remain in their house while in retirement.