FHA Reverse Mortgage - How It
Works
There may be times whenever we need to do something a little
bit desperate in order to help us to get by. This is especially
the case if we find ourselves in a situation where we are
unable to afford our bills and all we have to live on is our
Social Security check. In the United States, there is an option
for getting an FHA reverse mortgage on our home that can help
us to get by in our golden years. Here is how they work.
When you get a regular mortgage, you borrow money according
to the value of the home and then you pay the bank back on a
monthly basis, including principal of the loan and a lot of
interest. You also tend to pay a little bit of mortgage
insurance, depending on the type of loan to have and you may
have the taxes and insurance escrowed into the loan.
An FHA reverse mortgage is a little bit different than this.
You will still be borrowing money on the value of the home but
instead of making payments to the bank, they are going to make
payments to you. The interest and fees for this type of loan
are going to be added on to the note and will be payable at the
time that you move out of the home or when is away.
Depending on your age, you're going to able to get a
different amount of money on your FHA reverse mortgage.
Starting at the age of 62, you will be able to get somewhere
around 25% of the value of your home in a reverse
mortgage. This number will go up according to the age that you
are and by the time you are 85 years old, you will be able to
get well over 50% of the value of the home.
There are a lot of regulations that govern this type of loan
and there are also some reverse mortgage fees that you need to
be concerned about. Things such as interest and loan fees will
be added on to the regular closing costs and will be due while
you are sitting at the closing table. You may be able to defer
these to a certain extent with the money that you are getting
from the reverse mortgage but make sure that you prequalify
this with the FHA reverse mortgage company ahead of time.
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