A Home Equity Conversion Mortgage, or HECM, lender works with those who are interested in a reverse mortgage. These lenders work with loans that are through the FHA and HUD. When someone works with an HECM lender, there are certain requirements that must be met in order to be approved.
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One of the things to keep in mind with this loan is that the applicant must be at least 62 years of age. There needs to be a ceiling on the value of the property as well as counseling with an HUD representative. If the home is worth more than the current value of the HUD ceiling, the loan that is applied for will be based on the current value instead of the actual value of the home.
Those who have equity in the home can apply for this kind of mortgage. The lender will discuss the reasons as to why the applicant needs the loan as well as the interest rate and payment options to repay the loan. The lender will also discuss how the applicant can access funds that are built by the amount of equity that is in the home at the present time.
Some of the requirements for the loan that will be discussed during the application process include owning the property, using the property as a primary residence and not being late on any kind of payment that involves federal debt. There are also considerations when it comes to the amount of the loan. It’s based on how old the youngest applicant is at the time and if there is a balance on an existing mortgage. An HECM lender can help with getting all of the information together so that the applicant knows of the options available as well as how much money could be accessed.