College Station Reverse Mortgage

You know the traditional mortgage, but have you heard of a reverse mortgage? A reverse mortgage is a unique mortgage arrangement wherein the homeowner takes out a loan against their home’s equity. Borrowers must be at least 62 years old when obtaining the reverse mortgage and have considerable equity (at least 50%) in their properties. 

How Does Reverse Mortgage Work?

With a reverse mortgage, borrowers can access the cash they need to pay for cost-of-living expenses late in life. This money can be delivered as a lump sum, monthly payment, line of credit, or even a combination of options.

Reverse mortgages are structured so the loan does not exceed the home’s value. When the borrower dies or leaves the property, the lender has the right to foreclose the mortgage and apply the proceeds of the sale to pay the loan. 

An example of a reverse mortgage we offer at Capital Home Mortgage is the Home Equity Conversion Mortgage program or HECM. These loans are backed by the U.S. Department of Housing and Urban Development (HUD) and can be used for just about anything. Plus, no credit score requirements or collateral are needed since the home is a security for the loan. 

Borrower Requirements

To qualify for HECM, the borrower must satisfy all the requirements:

• The borrower is a senior citizen aged 62 years or older;
• The senior owner who occupies the property;
• The home in question is the borrower’s primary residence;
• The senior is not delinquent of any federal debt before the application;
• The homeowner has the means to make timely payments for property taxes, insurance, and HOA dues and fees;
• The homeowner must participate in the consumer information session conducted by a HUD-approved HECM counselor.

Property Requirements

The property types eligible for reverse mortgage loans must meet FHA property standards and flood requirements. Eligible properties include:

• Single-family home or a two to four-unit home with one unit belonging to and occupied by the borrower;
• HUD-approved condominium project;
• Individual condominium units meeting FHA Single Unit Approved requirements;
• Manufactured homes that meet FHA guidelines.

Mortgage Amount and Interest

Under the HECM program, interest rates are usually based on the current rate. The valuation of the property can be the appraised value of the home, the HECM loan limit, or the selling price, whichever is lower.

HECM Costs

You can finance costs associated with the HECM through the loan. However, that would mean lesser net proceeds. HECM has several fees that you are required to pay. These are:

• Initial mortgage insurance premium (MIP) of 2% at closing and 0.5% MIP annually over the life of the loan. The annual MIP will be based on the outstanding balance of the loan.
• Third-party charges, including appraisal fees, title search and insurance, surveys, inspections, mortgage taxes, and other fees.
• A loan origination fee is capped at $6,000.
• Servicing fees for the life of the HECM.

Apply for Reverse Mortgage Today

Home Equity Conversion Mortgage programs in College Station can be complicated without proper guidance. Let us help you cut through the noise and obtain the funding you need from your home’s equity. At Capital Home Mortgage, we are committed to providing our clients with an enjoyable loan process, with low fees and quick approvals. 

Call (979) 393-0049 to discuss your reverse mortgage needs with our loan officers or apply for a reverse mortgage.