Understanding the FHA Reverse Mortgage Program

Any advanced society needs to take care of its senior citizens in every way possible. The reverse mortgage option is one of the prime examples of how conscientious governments ensure that the country's older nationals are well taken care of.

These advertisements refer to the reverse mortgages. If you are planning to go for this mortgage program, then here are some details that you must consider.

Defining FHA Reverse Mortgages

This FHA mortgage program is a form of home loan that is designed to help you get money by converting the equity you hold in your own home. In different words, with the help of a reverse mortgage you would be able to convert the equity you hold in your home into cash.

You can also view this cash as the equivalent of the equity that you have gradually built in your home through mortgage payments. One of the most important aspects of a this program, however, is that you would not have to repay it till you actually stop living in your home. It is also important for you to know that FHA also refers to this program as the Home Equity Conversion Mortgage.

Certain Eligibility Criteria for the Reverse Mortgage

There are three separate criterion with regard to the eligibility of people for this program. These are the following:

1. Age:

   The most important aspect of the requirements is that the owner of the house should be 62 years old or above. This means that this type of mortgage is only viable for senior citizens of the country and younger people would have to rely on other loan programs.

2. Ownership:

   As is obvious, in order for you to be able to avail yourself of the program, you need to own your house outright or, at the very least, have a very low mortgage balance. This mortgage balance should be small enough to be paid off with the money drawn from the reverse loan.

3. Status:

   The final requirement of this unique program is that you should be living in the home that you are getting the this type of mortgage for. This requirement makes the program only viable for people who are planning to stay in their homes for a considerable amount of time.

Potential Proceeds from this Program

There are four separate aspects that determine the amount of money you can get through this program. These include the age of the borrower, the current interest rate, the lower end of the appraised value of the home and the type of initial mortgage insurance premium chosen by you.

In effect, you would be able to borrow more if the appraised value of your home is high, your age is more and the interest rate is low.

Stay up-to-date with all that is new at First Time Home Buyer Solutions. Subscribe to the RSS feed at the bottom of the navigation bar over on the left.

Leave What is a Reverse Mortgage? and return to Best FHA Home Loans main page.

Return to First Time Home Buyer Solutions home page.

Would You Like Your Own Website?
Click Here for FREE Details.

© 2005-2011 All Rights Reserved
Powered By SBI!