Reverse Mortgage Counseling(Home Equity Conversion Mortgage-HECM)
American Debt Resources, Inc is an approved provider of reverse mortgage counseling and listed on HUD's HECM Roster. Reverse mortgage counseling is a requirement for eligible homeowners looking to apply for a reverse mortgage. Once counseling is completed homeowners will receive a certificate of completion from their reverse mortgage counselor. The counseling session lasts for approximately one hour and can be completed either by phone or face to face.
What is a reverse mortgage?
A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that built up over the years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. FHA's HECM provides these benefits. You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.
Can I qualify for FHA's HECM reverse mortgage?
To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, and you must live in the home. You are further required to receive consumer information from an approved HECM counselor prior to obtaining a loan.
How much money can I get from my house?
The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow. More specific calculations will be provided to you during your HECM counseling session.
How do I receive my payments?
Tenure- equal monthly payments as long as at least one borrower lives and continued to occupy the property as a principal residence.
Term- equal monthly payments for a fixed period of months selected.
Line of Credit- unscheduled payments or installments, at times and in amounts of your choosing until the line of credit is exhausted.
Modified Tenure- combination of line of credit with monthly payments for as long as you remain in the home.
Modified Term- combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.
Lump Sum- Take a lump sum equaling the amount allowed to borrow.
The National Council on the Aging's "Use Your Home to Stay at Home" is an excellent guide to understanding the functions of a reverse mortgage. This publication is highly recommended for anyone considering a reverse mortgage. AARP's "Reverse Mortgage Loans. Borrowing against your Home" is another informative guide to reverse mortgages.
Call our office today at 800-498-0766 or email us to schedule an appointment for a reverse mortgage counseling session. After speaking to a reverse mortgage counselor payment for counseling can be made using this link.