SC Reverse Mortgage Lenders Frequently Asked Questions
A reverse mortgage is a loan that allows older homeowners access to some of their equity without having to make a monthly principal and interest payment.
why choose a reverse mortgage ?
- Pay off an existing mortgage or credit cards
- Medical expenses
- Purchase of Long-Term Care Insurance
- Supplement Social Security income for day-to-day living expenses
- Home improvements, modifications, additions
- Provide for a more comfortable and enjoyable retirement
- Purchase of a new home, condo, vacation home, etc.
what is a hecm ?
- A HECM is an FHA loan available to people over 62 years of age who live in the home as their primary residence.
- The loan amount is based on the FHA appraised value of the home and the age of the youngest borrower. Maximum value of up to $765,600 is used in the calculation.
- There are no required monthly principal and interest payments. (Borrowers must still pay homeowners insurance, taxes, and any other related costs such as Homeowners Association Dues.)
- The loan is repaid when the last of the borrowers move from the property, sell the property, transfer the title, or die. Foreclosure can occur if taxes or insurance are not paid, if the property is not maintained in accordance with FHA guidelines, or the borrowers fail to meet their obligations of the loan.
- The borrower retains title to the property.
- Funds from a reverse mortgage are not considered income and therefore are not taxable.*
- The reverse mortgage is a non-recourse loan. Repayment of the loan is the responsibility of the borrowers if still alive, and of the estate if the borrowers have died. Repayment is limited to the appraised value of the property at the time the loan is repaid, up to 95% of the appraised value.
what are the hecm qualifications ?
- All borrowers must be 62 years old or older.
- All borrowers must attend a counseling session with a HUD-approved counselor.
- There is no credit score requirement.
- The property must be properly insured and pass an FHA appraisal inspection.
what properties are eligible ?
● Single Family Homes
● 2-4 unit multi-family properties. Borrowers must live in one of the units.
(2-4 unit properties are not eligible for the HECM for purchase program.)
● Condominiums must be an FHA-approved project.
● Townhouses
● Manufactured homes that meet FHA-approved manufactured home guidelines.
● 2-4 unit multi-family properties. Borrowers must live in one of the units.
(2-4 unit properties are not eligible for the HECM for purchase program.)
● Condominiums must be an FHA-approved project.
● Townhouses
● Manufactured homes that meet FHA-approved manufactured home guidelines.
how can i receive the proceeds ?
HECM proceeds are available as :
- A lump sum
- A line of credit
- Monthly payments
- Any combination of the above
- Scroll the page for further details
can i purchase a home ?
Yes- Using the HECM For Purchase program
why purchase with a hecm ?
• Transition from multi-story home to single story
• Downsize or Upsize
• Move into 55+ community
• Less Yard, Less Maintenance
• Relocate closer to children and grandchildren
• Closer to shopping, medical, etc
• Downsize or Upsize
• Move into 55+ community
• Less Yard, Less Maintenance
• Relocate closer to children and grandchildren
• Closer to shopping, medical, etc
what property types are eligible ?
Eligible HECM for Purchase properties:
• Single Family Residence
• HUD Approved Condo
• Townhouses
• Single Family Residence
• HUD Approved Condo
• Townhouses
what is a jumbo reverse mortgage ?
It is a proprietary product which may offer more loan proceeds for higher valued property.
- Properties exceeding the HECM lending limit of $765,600
- Condominiums which are not FHA approved
What is a proprietary Reverse mortgage ?
Proprietary refers to any reverse mortgage that is not government insured.
- Jumbo Reverse Mortgages are proprietary
- HECM and HECM for Purchase are not proprietary
what are the borrowers obligations ?
Reverse mortgage loans require that you continue to:
- Own and occupy the property as your primary residence
- Pay the property taxes and any other property charges including HOA fees
- Pay the homeowners insurance
- Maintain the property
Can i make payments ?
You can make a full or partial payment on a HECM loan and there is no prepayment penalty.
HECM Payment Options
There are at least 5 ways to receive ongoing reverse mortgage payments with a HECM.
This gives you the flexibility to choose the right option for your unique circumstances.
There are at least 5 ways to receive ongoing reverse mortgage payments with a HECM.
This gives you the flexibility to choose the right option for your unique circumstances.
*
❶ Line of Credit**
❷ Term (Monthly Payments to You for a Fixed Period)**
❸ Tenure (Monthly Payments to You as Long as You Live There)**
❹ Modified Term (Term and Line of Credit Combination)**
❺ Modified Tenure (Tenure and Line of Credit Combination)**
You have the option to change plans after closing. There is a fee and you must still have available funds and be in compliance with all reverse mortgage requirements.
**As always, you must continue to own and occupy as your primary residence, continue to pay property taxes and insurance, and maintain the property.
❶ Line of Credit**
❷ Term (Monthly Payments to You for a Fixed Period)**
❸ Tenure (Monthly Payments to You as Long as You Live There)**
❹ Modified Term (Term and Line of Credit Combination)**
❺ Modified Tenure (Tenure and Line of Credit Combination)**
You have the option to change plans after closing. There is a fee and you must still have available funds and be in compliance with all reverse mortgage requirements.
**As always, you must continue to own and occupy as your primary residence, continue to pay property taxes and insurance, and maintain the property.
Simplify the Process
George Stewart has been a Reverse Mortgage Consultant in SC since 2002 and can simplify the entire process. He is a good listener and will try to make a Reverse Mortgage easy to understand.
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George Stewart
Reverse Mortgage Consultant NMLS 506558 (843) 771-3677 Office (843) 818-7676 Cell Advisors Mortgage Group LLC 242B Luden Drive Summerville, SC 29483 Branch NMLS # 2556464 |
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Copyright © 2023 by George Stewart
All rights reserved. The author is solely responsible for this content and is not affiliated with or acting on behalf of any government agency.
All rights reserved. The author is solely responsible for this content and is not affiliated with or acting on behalf of any government agency.
This material is not from, approved, or issued by the FHA, HUD, or any government agency. The content on these pages is for informational purposes only and is subject to change without notice. Please consult a professional for tax or financial advice.
A reverse mortgage is a home loan and not a government benefit. The borrowers must continue to own and occupy the property as the primary residence and are responsible for paying property taxes, homeowner's insurance, and property maintenance.
A reverse mortgage is a rising debt, falling equity loan. Negative amortization causes the loan balance to increase as accrued interest and fees are added. Failure to comply with the terms and conditions of the loan could trigger a loan default that results in foreclosure.
Subject to underwriting approval. Application is required and not all applicants will be approved. Full documentation and property insurance required. Loan secured by a lien against your property. Fees and charges apply and may vary by product and state. Terms, conditions and restrictions apply.
A reverse mortgage is a home loan and not a government benefit. The borrowers must continue to own and occupy the property as the primary residence and are responsible for paying property taxes, homeowner's insurance, and property maintenance.
A reverse mortgage is a rising debt, falling equity loan. Negative amortization causes the loan balance to increase as accrued interest and fees are added. Failure to comply with the terms and conditions of the loan could trigger a loan default that results in foreclosure.
Subject to underwriting approval. Application is required and not all applicants will be approved. Full documentation and property insurance required. Loan secured by a lien against your property. Fees and charges apply and may vary by product and state. Terms, conditions and restrictions apply.