Mortgage-Florida Home Loan
a Florida Reverse Home Loan
or call us at 808-357-5326
reverse mortgage is a special type of loan made to older homeowners
to enable them to convert the equity in their home to cash to finance
living expenses, home improvements, in-home health care, or other
a reverse mortgage, the payment stream is "reversed." That is, payments
are made by the lender to the borrower, rather than monthly repayments
by the borrower to the lender, as occurs with a regular home purchase
reverse mortgage is a sophisticated financial planning tool that
enables seniors to stay in their home -- or "age in place" -- and
maintain or improve their standard of living without taking on a
monthly mortgage payment. The process of obtaining a reverse mortgage
involves a number of different steps.
first, most widely available reverse mortgage in the United States
was the federally-insured Home Equity Conversion Mortgage (HECM),
which was authorized in 1987.
reverse mortgage is different from a home equity loan or line of
credit, which many banks and thrifts offer. With a home equity loan
or line of credit, an applicant must meet certain income and credit
requirements, begin monthly repayments immediately, and the home
can have an existing first mortgage on it. In addition, there is
no restriction on the age of borrowers.
general, reverse mortgages are limited to borrowers 62 years or
older who own their home free and clear of debt or nearly so, and
the home is free of tax liens.
usually have a choice of receiving the proceeds from the loan in
the form of a lump-sum payment, fixed monthly payments for life,
or line of credit. Some types of reverse mortgages also allow fixed
monthly payments for a finite time period, or a combination of monthly
payments and line of credit. The interest rate charged on a reverse
mortgage is usually an adjustable rate that changes monthly or yearly.
However, the size of monthly payments received by the senior doesn't
ammount that a senior homeowner can receive depends on the type
of the financing program, the borrower's age and current interest
rates, and the home's property value. The older the applicant is,
the larger the monthly payments or line of credit. This is because
of the use of projected life expectancies in determining the size
of reverse mortgages.
home purchase financing or home equity loan, these programs do not
require monthly repayments by the borrower to the lender. A reverse
mortgage is not repayable until the borrower no longer occupies
the home as his or her principal residence.
can occur if the sole remaining borrower dies, the borrower sells
the home, or the borrower moves out of the home, say, to a nursing
repayment obligation for this type of financing is equal to the
principal balance of the loan, plus accrued interest, plus any finance
charges paid for through the mortgage. This repayment obligation,
however, can't exceed the value of the home.
loan may be repaid by the borrower or by the borrower's family or
estate, with or without a sale of the home. If the home is sold
and the sale proceeds exceed the repayment obligation, the excess
funds go to the borrower or borrower's estate. If the sales proceeds
are less than the amount owed, the shortfall is usually covered
by insurance or some other party and is not the responsibility of
the borrower or borrower's estate. In general, the repayment obligation
of the borrower or borrower's estate can't exceed the value of the
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