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Today's seniors are sitting on an incredible amount of home equity: more than $11 trillion. For many, it's their largest asset. A HECM LOC lets older adult clients access that equity at a predictable growth rate, regardless of whether their home value increases or decreases. Borrowers with sufficient equity may have access to growth on their total credit facility. Here are two examples with and without a mortgage balance: Example 1: HECM line of credit growth with a mortgage balance Home Value: $550,000 Mortgage Balance: $100,000 Age: 65 Principal Limit: $207,900... Read Full Article
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The decision to get a reverse mortgage can be a big one, depending on the borrower's financial situation. Maybe you've decided that additional cash flow will help to stabilize your retirement finances, or maybe you're looking to fund something like in-home care or a renovation to make your house more accessible. Whatever your potential reason for getting a reverse mortgage, you won't find an industry that is more upfront about the potential benefits with possible downsides to the product category. Any reverse mortgage professional worth their salt will be very open about... Read Full Article
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Many senior borrowers have been raised on the idea that a fixed rate reverse mortgage is the “only way to go”. Still others remember back to the early 80’s when interest rates climbed as high as 18%. Some borrowers experienced rising interest rates from adjustable-rate loans (or knew others who did) and some remember family and friends whose payments rose to a point where they could no longer afford their homes. A fixed rate locks the rate in for the life of the loan and the borrower does not have... Read Full Article
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The reverse mortgage lending limit for Home Equity Conversion Mortgages will surpass $1 million for the first time ever in 2023, under program adjustments set by the Department of Housing and Urban Development (HUD) that are updated annually. The lending limit for 2023 HECM loans insured by the Federal Housing Administration will be $1,089,300, an increase of more than $118,000 over the 2022 lending limit of $970,800. The HUD lending limit changes year over year to reflect the current housing market and average home price changes that take place in... Read Full Article
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There are a few things you need to do and although you do have some time, time is limited so you need to act without unnecessary delays. The first thing you need to do is decide what you really want to do with the house. You can keep the home, sell it, or walk away and owe nothing regardless of the amount owed on the loan. Obviously if there is equity still in the property it is to your or the estate’s benefit to keep or sell the property, but... Read Full Article
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Like all loans, reverse mortgages come with some one-time costs and fees that all borrowers will face during the loan closing process, as well as some ongoing costs they will incur throughout the course of the loan. Many of the closing costs are the same as the costs that forward borrowers incur, such as recording fees. There are a few reverse mortgage-specific costs to be aware of, as well, in order to get a full picture of the costs associated with getting a reverse mortgage. In this article you... Read Full Article
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Hi, I own my home in ABQ, NM. It is in a popular older neighborhood. I purchased the home about 3 years ago and paid cash. It was in total disrepair at the time and sold at a substantial discount as a result. The remodel was extensive, with most of the house stripped down to the frame, and completely rebuilt, including some of the framing, new roof structure, new electrical, plumbing, and everything. I modernized the floor plan, used the attic to make the ceilings vaulted, added a spacious... Read Full Article
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If you’re at or near the age of 62 and are looking for ways you can adequately fund your retirement, it’s understandable that a reverse mortgage has become a potential option for you to consider. Maybe you’ve seen an ad on TV, or maybe you’ve just had to think about the future a little more intently and are open to some new options. But, if you don’t quite know how a reverse mortgage loan works, then you’ve come to the right place. Please note that the details and provisions... Read Full Article
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What are the age requirements for a reverse mortgage? The reverse mortgage product was specifically designed to meet the needs of an older borrower. As it was envisioned, this type of loan is available to help people access their home equity later in life when they may have a need to supplement a fixed income in retirement. And while historically reverse mortgages were available only to people who are at least 62 years old, recent product developments and private reverse mortgage loans available on the market today offer reverse mortgage... Read Full Article
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If you have a reverse mortgage (HECM) in place with a LESA, and you outlive the LESA, what happens? Alternatively, say the LESA was calculated estimating that you would live to a certain age and pay the taxes and insurance, and you outlived the funds available in the LESA, what would happen in that case? These are great questions and ones to which all borrowers with LESA accounts should know the answers. Firstly, if you pass and there are still funds that were set aside in the account... Read Full Article
