FHASecure: Working Hard for Your
Homeownership
FHASecure is a refinancing option that
gives credit-worthy homeowners, who were making timely mortgage
payments before their loans reset but are now in default, a
second chance with a FHA insured loan product.
To qualify for FHASecure, and include the delinquent loan
payments, homeowners wishing to refinance must meet the
following requirements:
Have a non-FHA insured ARM that has reset;
Sufficient income to make the mortgage payment; and
A history of on-time mortgage payments before the loan reset.
Homeowners who are current on their conventional mortgages must
have sufficient income to make the mortgage payment.
By refinancing into a FHA insured mortgage, you can expect to
pay lower monthly mortgage payments. FHASecure can improve the
quality of life for many communities by helping to reduce the
number of mortgage defaults and bringing greater stability to
local housing markets.
Please contact us about more information on FHA Secure Loans
Reverse Mortgages for Seniors
FHA's Home Equity Conversion Mortgage
Senior homeowners age 62 and older can use
FHA-insured reverse mortgages to convert the equity in their
homes into monthly streams of income and/or a line of credit to
be repaid when they no longer occupy the homes. The loan,
commonly known as Home Equity Conversion Mortgage or HECM, is
with by a lending institution such as a mortgage lender, bank,
credit union or savings and loan association. Homeowners are
required to receive consumer education and counseling by an
approved HECM counselor so they can be sure this program meets
their needs. HECM housing counselors will discuss program
eligibility, financial implications and alternatives to
obtaining a HECM plus provisions for the mortgage becoming due
and payable. Upon the completion of HECM counseling, you as a
homeowner should be able to make an independent, informed
decision of whether this product will meet your needs.
Homeowners who meet the eligibility criteria can complete a
reverse mortgage application.
Borrower Requirements:
Must be age 62 years of age or older
Must own your property
Live in your property as primary residence
Participation in a consumer information session given by a
HUD-approved housing counseling agency.
Mortgage Amount Based On:
Age of the youngest borrower if more than one
Current interest rate
Lesser of appraised value or the FHA insurance limit
Financial Requirements:
No income or credit qualifications are required of the borrower
No repayment as long as the property is the primary residence
Closing costs may be financed in the mortgage
Property Requirements:
Single family home or 1-4 unit home with one unit occupied by
the borrower (which can also be FHA-approved condominiums or
manufactured homes and leased land)
Meet FHA property standards and flood requirements
How FHA's Reverse Mortgage Program Works
Homeowners 62 and older who have paid off their mortgages or
have only small mortgage balances remaining, and are currently
living in the home are eligible to participate in FHA's reverse
mortgage program. The program allows homeowners to borrow
against the equity in their homes. Homeowners can select from
five payment plans:
Tenure - equal monthly payments as long as at least one borrower
lives and continues 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 in installments, at
times and amounts of borrower's choosing until the line of
credit is exhausted.
Modified Tenure - combination of line of credit with monthly
payments for as long as the borrower remains in the home.
Modified Term - combination of line of credit with monthly
payments for a fixed period of months selected by the borrower.
Homeowners whose circumstances change may be able to restructure
their payment options for a nominal fee of $20. Please consult
your lender for more information.
Unlike ordinary home equity loans, an FHA reverse mortgage does
not require repayment as long as the home is the borrower's
principal residence. Lenders recover their principal, plus
interest, when the home is sold. If any home equity remains
after sale, the remaining value of the home goes to the
homeowner, estate or heirs. You can never owe more than your
home's value.
If the sales proceeds are insufficient to pay the amount owed,
HUD will pay the lender the amount of the shortfall. HUD's
Federal Housing Administration (FHA) collects an insurance
premium from all borrowers to provide this coverage.
The amount a homeowner can borrow depends on their age, the
current interest rate, other loan fees and the appraised value
of the home or the FHA's mortgage limits for the area, whichever
is less. Generally, the more valuable your home is, the older
you are, and the lower the interest, the more you can borrow.
For example, based on a loan with interest rates of
approximately 9%, and a home qualifying for $100,000, a
65-year-old could borrow up to 22% of the home's value; a
75-year-old could borrow up to 41% of the home's value; and, an
85-year-old could borrow up to 58% of the home's value. The
percentages do not include closing costs because these charges
vary.
There are no asset or income limitations on borrowers receiving
FHA's reverse mortgages.
There are also no limits on the value of homes qualifying for an
FHA reverse mortgage. The value of the home will be determined
by an appraisal. However, the amount that may be borrowed is
derived from the lower of the appraisal amount or FHA mortgage
limit for the area, which varies from $200,160 to $362,790.
For Alaska, Guam, Hawaii and the Virgin Islands, the FHA
mortgage limits may be adjusted up to 150% of the ceiling
depending on the area. The FHA limits usually increase each
year. As a result, owners of higher-priced homes can't borrow
any more than owners of homes valued at the FHA limit.
FHA's reverse mortgage program collects funds from insurance
premiums charged to the homeowners. Homeowners are charged an
upfront insurance premium which is 2% of the maximum claim
amount that may be borrowed plus a .5% annual premium which is
paid on a monthly basis for the life of the loan.
Please contact us about more information on FHA Reverse
Mortgages.
E-mail for further information:
Dale Johnson, President
Tracey Johnson
Michelle Johnson
April
