Reverse Mortgage In Spokane

A reverse mortgage in Spokane is a loan that allows homeowners aged 62 and over to access the equity in their property without selling it. When the homeowner dies or moves out permanently, the loan is repaid. There are no required monthly payments, and only the quantity borrowed is charged interest. Reverse mortgages are an excellent way to supplement income, pay for home repairs, and make other large purchases.

The borrowed funds can be provided to homeowners as a lump sum, a line of credit, or preset monthly payments. Like a traditional mortgage, the property’s title remains in the owner’s name. Their home’s equity determines the borrower’s access to funds.

However, because no monthly payments are required for the loan, interest, and fees are added to the loan total each month, leading the balance to grow over time. Remember that while the loan total may theoretically surpass the home’s value, the borrower or the borrower’s estate is not compelled to repay any additional loan balance above the home’s worth. Federal regulations also demand that the transaction be structured so that the loan amount does not exceed the home’s value.

The borrower remains responsible for property taxes, homeowners insurance, and the upkeep of the property. This type of loan can be advantageous for seniors who need to supplement their income or cover living expenses.

Types of Spokane Reverse Mortgage

There are three types of reverse mortgage loans: those insured by the Federal Housing Administration (FHA), proprietary reverse mortgage loans that the FHA does not guarantee, and single-purpose reverse mortgage loans provided by state and local governments. 

• Home Equity Conversion Mortgage (HECM)

The most common type of reverse mortgage loan is a HECM. The Federal Housing Administration (FHA), part of the United States Department of Housing and Urban Development (HUD), insures HECMs. They are offered to qualifying borrowers at least 62 years and have paid off or have low mortgage balances. The FHA will cover the loss if the amount owed on the reverse mortgage exceeds the home’s value.

There are also Purchase Home Equity Conversion Mortgages. While less popular than the three categories, it is another type of reverse mortgage used for purchase.

The HECM for Purchase is a financing option that enables householders to use a reverse mortgage to pay for up to fifty percent of the purchase price of a new residence. This allows homeowners to complete a reverse mortgage and a new home purchase with a single transaction and a single set of closing costs.

• Proprietary Reverse Mortgage

These are similar to HECMs, except the government does not guarantee them. These loans are often tailored to borrowers with higher property values and have fewer restrictions. The lender may also ease eligibility requirements. 

Proprietary reverse mortgages are an enticing choice for certain seniors, particularly those with higher-value homes, who want to access a more significant portion of their home equity while still owning their home.

• Single-Purpose Reverse Mortgage

These loans are primarily issued by state, local, and nonprofit organizations and are the cheapest and least popular type of reverse mortgage. Reverse mortgages with a single purpose may only be used for the purpose stated by the lender (for example, home repairs or property taxes). They may be limited to specific locations and aimed at low to moderate-income homeowners.

Homeowners seeking a single-purpose reverse mortgage should thoroughly comprehend the terms and conditions, including the purpose for which the loan must be used, and carefully examine their capacity to repay it.

Advantages of a Reverse Mortgage

A reverse mortgage can benefit seniors who want to utilize their home’s equity. Here are some of the primary benefits:

• Supplemental Income

As many retirees experience a substantial reduction in income, a reverse mortgage can provide a reliable source of income to supplement social security, pensions, and savings to cover daily expenses.

• Tax-Free Funds

Reverse mortgage income is not deemed taxable income. This is an attractive benefit for retirees attempting to reduce their tax burdens.

• No Monthly Payments

Unlike traditional mortgages, a reverse mortgage does not require the homeowner to make any loan payments during their lifetime. When the borrower dies, permanently moves out, or sells the home, the debt is repaid.

• Retain Home Ownership

A reverse mortgage allows homeowners to stay in their homes while transforming their equity into spendable cash, giving them freedom in retirement.

• Flexible Payout Options

The proceeds of a reverse mortgage can be received as a single sum, monthly payments, or a line of credit, providing homeowners with flexibility based on their particular needs and financial planning.

The funds from a reverse mortgage can be used for any purpose, including property maintenance, medical expenses, and debt repayment, making it a versatile financial instrument.

• Non-Recourse Loan

Federal regulations safeguard the borrower or the borrower’s estate from owing the difference if the reverse mortgage balance exceeds the home’s value at the time of repayment. Beyond the home’s value, the lender has no recourse against the borrower or the borrower’s estate.

Apply for a Spokane Reverse Mortgage

Capital Home Mortgage is an excellent option for Spokane homeowners seeking a reverse mortgage. First, reverse mortgages can provide significant financial flexibility by converting home equity into a stream of income or lump sum payment that does not need to be repaid until the borrower sells the property, moves permanently away, or dies. As an expert in this industry, Capital Home Mortgage can assist you in navigating these complexities. In addition, the Spokane market is suitable for reverse mortgages, indicating that substantial equity could be unlocked. Capital Home Mortgage offers competitive interest rates, a comprehensive selection of products, including HECM and non-FHA reverse mortgages, and a dedication to superior customer service.

Call (253) 528-4417 to speak with our Spokane Reverse Mortgage Specialists now.