Reverse Mortgages with 100% correct answers

Who are reverse mortgages popular products for and why? Popular for older homeowners who have equity in their homes and little or no income. What do reverse mortgages allow people to do? Allow older homeowners to use equity in their homes to meet expenses of living or to pay for home improvements 00:03 01:15 Are borrowers required to repay a reverse mortgage? They are not required to repay as long as they continue to live in the home At what age are reverse mortgages available to? Borrower must be 62 years or older and must reside in their home When must the mortgage be payable in full? Mortgage must be payable in full when the home is sold or last surviving homeowner dies What happens to the Interest in a reverse mortgage? Interest is charged on the outstanding balance and added to the debt What happens to the debt in a reverse mortgage? it increases with each advancement of credit and with accrued interest What are the 3 types of reverse mortgages Single purpose reverse mortgage Home Equity Conversion Mortgages Proprietary Mortgages Home Equity Conversion Mortgages Reverse mortgage that are regulated and insured by HUD. Allow borrowers to receive fixed monthly payments, a line of credit, or a combi of payment and credit line What must borrowers complete if they wish to get a reverse mortgage? Borrowers must complete counseling with a HUD approved HECM counselor What is a Single Purpose Reverse Mortgage and who can offer it? Low cost loans offered to low income borrowers by state and local agencies or non-profit What are the specifications of Single Purpose RM They can only be used for the purpose specified by the lender such as home improvement or paying property taxes. Proprietary Mortgages Private loans and are more expensive but allow homeowners to borrow more than they can borrow with an HECM Why might a reverse mortgage become due and payable? Homeowner: Dies moves out of home for longer than a year Sells the home Fails to pay property taxes or keep home insured Fails to maintain or repair home Declares bankruptcy Abandons the property Perpetration of fraud or misrepresentation Eminent Domain or condemnation proceedings What additional default clauses can be added to make a reverse mortgage payable? If the homeowner: 1. Rents all or a portion of their home 2. Adding a new owner to home's title 3. Taking out any new debt against the home 4. Zoning classification changes Today what are most reverse mortgages? Home Equity Conversion Mortgages What are some other required premiums with HECMs Annual and upfront Mortgage Insurance Premiums