Cincinnati Reverse Mortgage Loans
The HECM (home equity conversion mortgage) or FHA insured reverse mortgage is used as a tool by seniors age sixty two and older to release the home equity in their primary residence. Either as a lump sum cash out at closing, monthly installments, and/or a line of credit to be repaid when all of the borrowers no longer occupy the home.
HUD requires all borrowers to complete third party financial counseling. This is a safeguard for the borrower and family to assist the homeowner in making an informed decision. HUD counselors will discuss all of the HECM requirements, alternatives, and provisions for when the mortgage is paid.
How the reverse mortgage works
Homeowners 62 and older who have paid off their home or have a large equity position are eligible. Seniors buying a home with fifty percent or less down payment can obtain a reverse mortgage and not have a mortgage payment. Unlike a traditional mortgage a reverse does not require a monthly payment or in payment in full, until all borrowers have moved on.
The reverse gives people another option to improve or maintain their standard of living while staying in their home.
H.E.C.M. Requirements
- Must be 62 years of age or older
- No credit or income qualifications are required
- Occupy or intend on occupying as your primary residence
- Property must be owner occupied
Estate and Inheritance
Your estate can pay off the reverse through a new mortgage, sell the home, or any other means and keep all of the proceeds. If the balance exceeds the value home HUD will pay the lender the difference. Therefore you can never owe more than your home is worth.
Advantages
- You always retain the title to your home.
- Social Security is not effected by the reverse mortgage
- Medicare is not effected by the FHA HECM
Non Recourse Loan
In the event the home is worth less than you owe with the HECM reverse mortgage, no other assets in your estate will be used to pay difference.
No Credit Requirements
The home equity conversion mortgage is not credit score or credit history driven since you are not required to make a payment.
Tax Advantages
The internal revenue service does not consider HECM cash advances as taxable income. The FHA mortgage insurance funding fee is tax deducible on the 1040 long form. This allows the homeowner no obligation to pay the loan monthly and until all homeowners sell, move into aged care, or pass away. You cannot outlive the reverse mortgage as long as one of the homeowners occupy the property as their primary residence.
