What is a key feature of a reverse mortgage product?
A reverse mortgage allows homeowners aged 62 or older to convert home equity into cash without monthly mortgage payments.
Who is eligible for a Home Equity Conversion Mortgage (HECM)?
HECMs are federally insured reverse mortgages available to homeowners aged 62 and older with significant home equity.
What is required before a borrower can obtain a reverse mortgage?
HUD requires that borrowers complete counseling with an approved HECM counselor before taking a reverse mortgage.
What is the role of the loan originator in reverse mortgages?
The loan originator guides the borrower through the application process, disclosures, and ensures eligibility criteria are met.
Which of the following is a disbursement option for reverse mortgages?
Borrowers can receive reverse mortgage funds as a lump sum, monthly payment, line of credit, or combination.
What happens when the last surviving borrower dies or moves out?
The reverse mortgage becomes due and payable when the last surviving borrower dies, sells the home, or no longer lives there as the principal residence.
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Which agency insures HECM reverse mortgages?
The Federal Housing Administration (FHA), a part of HUD, insures HECM reverse mortgage loans.
Which condition may make a reverse mortgage unsuitable?
If the homeowner plans to move soon, a reverse mortgage may not be suitable due to closing costs and loan setup.
How does a reverse mortgage impact inheritance?
Heirs can choose to repay the loan and keep the home or sell the home and use the proceeds to repay the loan.