You may qualify for a reverse mortgage even if you still owe on an existing mortgage on the home. If you take the loan, the reverse mortgage will take ‘first lien’ position, with priority claim on home equity. You may pay off an existing mortgage with the proceeds of a reverse mortgage; generally, all currently outstanding mortgages need to be paid off in full at the time the new reverse mortgage closes. Check the terms of an existing mortgage to understand any conditions related to early payoff.

Reverse mortgage loan amounts depend on: the age of the borrower, or the youngest spouse for a couple; the appraised value of the home - appraisal will be required; and current interest rates. Reverse mortgages involving government programs are subject to current FHA lending limits. In general, the older you are the less you owe, and the more valuable your home the larger the amount for which you may qualify.

Does A Reverse Mortgage Leave Home Value For Heirs Or Estate? When the home is sold or the owner dies, the principal, interest and other finance charges must be paid. All proceeds or equity beyond this belong to the borrower’s estate. Reverse mortgages do NOT encumber heirs or estates with debts. If you are inheriting an estate with a home involved in a reverse mortgage, contact the servicer of the loan with details of your situation to learn about your next steps.

Reverse mortgages and home equity loans both use equity as collateral. Home equity loans do not have an age requirement; reverse mortgages require the owner be at least 62. HELOCs must be repaid over time - typically 5 or 10 years; Reverse mortgage payback is generally upon sale or borrower death. Rates on the two may be comparable, but borrowers should shop. Reverse mortgage closing costs are generally higher, but typically, these costs can be financed as part of the reverse mortgage loan.

Major Veterans Affairs loan programs described in this video include: 1) Purchase Loans. These help eligible parties buy a home at competitive interest rates with little to no down payment and little or no private mortgage insurance. 2) Cash Out Refinance Loans which enable taking cash out of home equity to pay off debt, fund school or make home improvements. 3) Interest Rate Reduction Refinance Loans also called Streamline Refinance Loans can help veterans obtain lower interest by refinancing existing VA loans Other programs include: 4) Native American Direct Loans to help eligible Native American veterans finance homes on Federal Trust land. And 5) Adapted Housing Grants to help veterans with service-connected disabilities buy, build or modify a home suited to their disabilities. Many states offer additional resources to veterans, too. Talk to your home lender about your situation.

As the video says, the name is misleading - theyre not loans FROM the VA. The VA - short for US Department of Veterans Affairs - is the Federal military veteran benefit system. The VA administers benefits and services for Servicemembers, Veterans their dependents and survivors. Programs related to home loans are one of their key services. The VA is not a bank; they do not provide home loans themselves. But they do guarantee a portion of home loans provided to veterans and other eligible people by banks and mortgage companies. These guarantees enable lenders to provide more favorable terms. They are are commonly called VA Loans. They cover buying, building, repairing, retaining and adapting homes for personal occupancy by eligible Veterans and survivors.

The video puts this in more visual terms, but 203(b) is the most commonly used FHA program. It offers a low down payment, flexible qualifying guidelines limited lenders fees, and a maximum loan amount. 203(k) loans enable homebuyers to finance both the purchase and rehabilitation of a home through a single mortgage. A portion of the loan is used to pay off the sellers existing mortgage and the remainder is placed in an escrow account and released as rehabilitation is completed. Basic guidelines for 203(k) loans are as follows: The home must be at least one year old. The cost of rehabilitation must be at least $5,000, but the total property value - including the cost of repairs must fall within the FHA maximum mortgage limit. The 203(k) loan must follow many of the 203(b) eligibility requirements. Lenders will know specifics about improvement, energy efficiency, and structural guidelines.

"Assumable" means "someone else can take over the loan when they buy your home." As this short video explains, FHA loans are usually assumable. If you have an FHA loan, particularly one with favorable terms, and it is assumable, you may have another tool in your selling negotiation. The process of assuming a loan can be easier, and sometimes less expensive, than starting a completely new loan. This is good for the buyer! Assumption requires a credit check, but home appraisal and other processes and costs can be skipped. Interest rates will affect the value of assumability. If interest rates have dropped since you originated the FHA loan, of course, there will be less interest in assuming it. Know the interest rate and terms of your FHA-backed loan, and read the loan terms to see if it is assumable, before selling. It may help you sell. And if you are in the process of buying with an FHA-backed loan, ask whether the loan is assumable. If interest rates rise, that assumable loan may become a valuable asset when you sell in the future.

Loans from FHA-approved lenders (Federal Housing Authority) follow most of the same steps as conventional loans. As you might expect, because a Federal agency is involved in the loan, there may be just a bit more paperwork. The FHA has worked hard to speed up the origination process. Their innovations include options for applying without face-to-face meetings, via telephone and video conference. Search for FHA-approved lenders in your area, and get in touch with them to find out about current programs and options for your situation.

Some combinations of loan terms — such as a small down payment — may require the buyer to pay mortgage insurance. (See the video on Private Mortgage Insurance here to learn a bit more about it.) PMI can add yearly costs to your mortgage, but you may not be required to continue carrying for the whole term of the loan. If your loan was consummated after July 29, 1999, and your payments are current, you have some options. Your lender must terminate PMI when principal balance is 78% of the original value of the home. Your lender must terminate PMI if you reach the halfway point of hte loan term (e.g. 15 years on a 30-year fixed loan.) You can request cancellation of the PMI policy yourself when principal reaches 80% of original value. Logically, that suggests that the lender didn’t cancel automatically, so if you’ve hit the 78% market, ask them in writing. Consumers have the right to ask for the date that either of these balances will be in force. If your mortgage is relatively new, ask for the date and put a followup note on your calendar or phone to check — even if it’s years in the future. Follow any steps the lender requires, do everything in writing and keep copies.