Reverse Mortgage In Lubbock

A reverse mortgage is a special kind of mortgage that is only available to homeowners who are 62 years old or older. It allows homeowners to convert a portion of the equity in their house into cash while continuing to live in and own the property. The Department of Housing and Urban Development (HUD) allows homeowners whose mortgages are insured by the FHA Mortgage Insurance program to either borrow against the equity in their homes or acquire a new home, depending on the value of their current home or the price of the new house. Because, in contrast to a traditional mortgage, the lender will make regular payments to the borrower, the loan is regarded as a “reverse mortgage.”

Types of Lubbock Reverse Mortgage

There are three distinct types of reverse mortgages available, and the one that the borrower chooses will depend on their specific requirements.

• Home Equity Conversion Mortgage 

The Home Equity Conversion Mortgage (HECM), often known as a reverse mortgage, is a program made available by the Federal Housing Administration (FHA) and enables homeowners to access a portion of the equity accrued in their homes. You have several options available for taking money out of your savings, such as taking a set amount out each month, applying for a line of credit, or doing a combination of the two. You can also use a HECM to acquire a primary residence; however, you must have enough cash on hand to cover the difference between the proceeds from the HECM and the purchase price of the home, as well as any closing costs.

To qualify for a HECM, you have to fulfill all of the following requirements:

1. Must be at least 62 years old;
2. Must occupy the house as a primary residence
3. Must have a low mortgage balance or own the property free and clear;
4. Must not be in default on any government debt;
5. Must complete HECM counseling session by a certified HUD counselor.

• Proprietary Reverse Mortgage

A proprietary reverse mortgage is a private lender loan that allows senior homeowners to tap into the equity in their houses. They are not federally insured and are not subject to the same stringent regulations as home equity conversion mortgages (HECMs).

Jumbo reverse mortgages are another term for proprietary reverse mortgages. Individuals who want access to more funds than the federally insured reverse mortgage seek them out. They can be received as a lump payment, structured as a monthly annuity, or distributed over a certain number of years.

• Single-Purpose Reverse Mortgage

The single-purpose reverse mortgage is the type of reverse mortgage that has the lowest overall cost. In addition to nonprofit organizations, particular state, and municipal government departments also give them. However, not everyone will be able to utilize them. As was previously mentioned, the usage of these loans is limited to just one of the activities sanctioned by the lending institution. For instance, the lender may require that the borrower use the loan only to pay for house repairs, improvements, or property taxes. This may restrict the use of the funds. The vast majority of homeowners, particularly those with salaries in the low to middle ranges, are qualified for these loans.

Apply for a Reverse Mortgage with Capital Home Mortgage

Call us if you are a senior considering your financial options and are curious whether a reverse mortgage will be a good fit. Dial (806) 589-3428 to have a conversation with one of our Reverse Mortgage Specialists in Lubbock.