Paying for Home Care: Reverse Mortgage FAQs Continued

There were a few more common questions about reverse mortgages, so here is a continuation of the last blog.  It is important to note: With an FHA HECM, borrowers cannot be foreclosed or forced to vacate the house because the mortgage payment was missed.

• Can the lender take the home away if the owner outlives the loan? No. The loan does not need to be repaid as long as one of the borrowers continues to live in the house and keeps the taxes and insurance current. The owner can never owe more than the value of the home at the time the heirs sell the home.
• Will there still be an estate to leave the heirs? When the home is sold, the estate will repay the cash received from the reverse mortgage, plus interest and other fees, to the lender. The remaining equity in the home, if any, belongs to the owner or the heirs.
• How much money can a homeowner get for his or her home? As previously stated, the amount available to borrow depends on the homeowner’s age, the current interest rate, and the appraised value of the home or FHA’s mortgage limits for the area, whichever is less. Generally, the more valuable the home is, the older the homeowner is, the lower the interest, the higher the amount available to borrow. An online calculator like the one on the AARP Web site rmc.ibisreverse.com//rmc_pages/rmc_aarp/aarp_index.aspx can be used to get an idea of what may be available to borrow.
• Should an estate planning service be used to find a reverse mortgage? FHA does NOT recommend using any service that charges a fee for referring a borrower to an FHA lender. FHA provides this information free, and HUD-approved housing counseling agencies are available for free or at very low cost, to provide information, counseling, and a free referral to a list of FHA-approved lenders. Search online at www.hud.gov/offices/hsg/sfh/hecm/hecmlist.cfm or call (800) 569-4287 toll-free for the name and location of a HUD-approved housing counseling agency.
• How are payments received? There are five options:

• Tenure – equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.

• Term – equal monthly payments for a fixed period of months selected.

• Line of Credit – unscheduled payments or installments, at times and in amounts of the homeowner’s choosing until the line of credit is exhausted.

• Modified Tenure – combination of line of credit with monthly payments for as long as the homeowner remains in the home.

• Modified Term – combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.

If you have any questions about the info presented here call (913) 390-6300 for further details on available options to pay for home care, and for tips on how to make home care more affordable. After a free in-home assessment, we will make certain that any available financial assistance for aging at home is explored, including access to home equity through a reverse mortgage.

CLICK HERE FOR ADDITIONAL REVERSE MORTGAGE FAQs