Thinking of getting a HECM? Here are a few things to know before you shop for a reverse mortgage for seniors in Palm Desert.
What is a reverse mortgage?
Also known as a HECM or home equity conversion mortgage, the idea behind these loans is simple enough. This is a loan taken out against your property. Unlike a traditional mortgage, though, you won’t have to make monthly payments while you’re alive.
How does it work?
The borrower does not need to make monthly payments. Instead, the borrower will receive payments, all while the home equity decreases. But this will last only for as long as the borrower stays in the property. The borrower must also be 62 years of age or older and have enough to cover the costs of taxes and insurance. If the borrower passes away or sells the house, then the loan must be paid.
How much will the borrower pay?
Reverse mortgage loans cannot go beyond the value of the property. That condition exists to protect both parties in the transaction. That means that if the house sells for less than the balance owed, then the balance will not be owed by the borrower. If the house sells higher than the value of the reverse loan, though, then the equity will go to the borrower. If the borrower has passed away, the proceeds will be used as equity.
Do I qualify as a borrower?
You need to be about 62 years old or older and must use the home as your primary residence. The house must also be in tip-top condition before you apply for the loan. Also, you will need to talk to an approved HUD counselor before you go forward with anything else. That’s to make sure you understand all your options before you take this step.
If you meet with those conditions, look for an expert in Palm Desert and ask about options for a reverse mortgage for seniors.
