Reverse Mortgage In Fort Worth

What is a Reverse Mortgage?

A reverse mortgage is a type of loan that allows homeowners 62 and older to receive tax-free income from a portion of their home’s equity. In contrast to a conventional mortgage, in which the homeowner pays the lender, the lender pays the homeowner in a reverse mortgage.

There are three kinds of reverse mortgages: (a) Home Equity Conversion Mortgage (HECM), (b) Single Purpose Reverse Mortgage, and (c) Proprietary Reverse Mortgage.

• Home Equity Conversion Mortgage

These federally insured mortgages are the most prevalent reverse mortgage; nevertheless, the proceeds can be used for any purpose. In addition, you can select the withdrawal method, such as regular monthly installments or a credit line (or both options simultaneously). Although widely available, HECMs are only offered by FHA-approved lenders, and all borrowers are required to receive HUD-approved counseling before closing.

The counselor must explain the cost of the loan and its financial ramifications. A reverse mortgage with a specific purpose or one that is proprietary is some of the alternatives to a HECM. The counselor must explain how payments, fees, and expenditures affect the overall cost of the loan. They should also be able to compare the costs of other reverse mortgage products.

• Single Purpose Reverse Mortgage

The least expensive reverse mortgage option is the single-purpose reverse mortgage. Certain state and municipal government agencies provide them, along with nonprofit groups. However, they are not universally accessible. As stated, only one of the lender’s approved uses is permitted for these loans. For instance, the lender can stipulate that only home repairs, improvements, or property taxes are allowed to be paid with the loan. Most homeowners with low or middle incomes are eligible for these loans.

• Proprietary Reverse Mortgage

This is a non-government guaranteed private loan. This form of reverse mortgage often offers a more significant loan advance, particularly if you own a home with a high value.

Shop for a Reverse Mortgage

Look around if you’re thinking about getting a reverse mortgage. Choose the type you intend to use, depending on what you plan to do with the money. Compare the choices, terms, and costs offered by different lenders. Before speaking with a counselor or lender, learn about reverse mortgages and ask questions to ensure you’re receiving the right reverse mortgage.

Call us at (817) 779-7133 and speak with one of our Home Loan Specialists about a reverse mortgage.