Brownsville Reverse Mortgage

A reverse mortgage may be an excellent option if you are 62 or older and need money to pay off your mortgage, supplement your income, or cover healthcare costs. This type of mortgage allows qualified borrowers to convert a portion of their home’s equity into cash without having to sell it or incur additional monthly expenses.

Reverse mortgages, however, can be complicated and may not be suitable for you. Learn as much as you can about it first before taking the plunge.

What is a Reverse Mortgage?

A reverse mortgage is a type of loan used by homeowners over the age of 62 and with significant equity in their homes. Borrowing against their home’s equity allows seniors access to funds for cost-of-living expenses later in life, often after they have exhausted all other savings or sources of income.

A regular mortgage requires paying the lender monthly to own your home over time. In a reverse mortgage, you receive a loan from the lender and are not required to repay the money for as long as you reside in your home.

Don’t be mistaken; reverse mortgages are not “free money.” When the principal borrower moves out of the house or dies, the loan must be repaid, including the interest and fees added to the balance each month. The homeowners or their heirs often repay the loan by selling the home.

3 Types Of Brownsville Reverse Mortgage

When deciding if a reverse mortgage is ideal for you, also evaluate which of the three types best meets your needs. The three types of reverse mortgages are:

     1. Single-Purpose Reverse Mortgage

Single-purpose reverse mortgages are loans provided by nonprofits and state and local governments for specific purposes specified by the lender, such as repair or improvement. They are the least expensive of the three but only available in certain areas.

     2. Home Equity Conversion Mortgage

The federal government guarantees Home Equity Conversion Mortgage (HECM) through the U.S. Department of Housing and Urban Development (HUD). They are typically more expensive than traditional mortgages, but the loan funds can be used for almost anything. Borrowers can receive their funds in various ways — in a lump sum, fixed monthly payments, a line of credit, or a combination of regular payments and a line of credit.

     3. Proprietary Reverse Mortgage

A government agency does not back proprietary reverse mortgages. The lenders establish their eligibility criteria, rates, fees, terms, and underwriting procedures. While these loans are the easiest to obtain and the quickest to fund, they are also frequently targeted by unscrupulous professionals who use reverse mortgages to scam unsuspecting seniors out of the equity in their homes.

Brownsville Reverse Mortgage Loan Requirements

The following are the basic eligibility and qualification requirements for a reverse mortgage loan:

• The primary homeowner must be 62 or older.
• The borrower must own the property or have paid a significant portion of the mortgage.
• The house must be used as the primary residence.
• The homeowner is not a delinquent of any federal debt.
• The homeowner must continue paying property taxes, homeowners insurance, and homeowners association dues.
• The borrower must attend an information session facilitated by a HUD-certified reverse mortgage counselor.

Benefits Of Reverse Mortgage in Brownsville

Borrowing against your home equity can free up much-needed cash for living expenses. Still, the mortgage insurance premium, as well as the origination and servicing fees, can quickly add up. Let’s look at some of a reverse mortgage’s most notable benefits and drawbacks.

Pros

• No need to make monthly payments.
• Access to funds can help make retirement more enjoyable.
• Proceeds can be used for various expenses.
• Funds can be used to pay off existing mortgages and stop foreclosure.

Cons

• Borrowers must maintain the property and pay property taxes and home insurance.
• High fees and closing costs can lower the amount of available cash.

Is Reverse Mortgage Good For You?

A reverse mortgage can help homeowners looking for additional income during their retirement years. By borrowing against their equity, seniors can access cash and live comfortably. However, the opposite can also happen.

If a reverse mortgage sounds like a good idea for you, get in touch with Capital Home Mortgage and apply for a Brownsville Reverse Mortgage today! For those not sold on the idea of taking out a reverse mortgage, that’s okay! We can help you explore suitable alternatives instead.

Have you got questions? Need expert advice? Feel free to contact us at (956) 307-3422. We’d be more than happy to help!