HECM in Keizer Oregon – Home Equity Conversion Mortgage
What You Want To Know About Obtaining A HECM in Keizer Including, Options, Costs, Requirements and Receiving The Best Deal
The HECM program enables elderly homeowners in Keizer Oregon to pull out some of the equity of their home in the form of monthly payments for life or a fixed term, or in a lump sum, or through a line of credit. This reverse mortgage program allows families to remain in their home while using some of its equity. The total income that an owner can receive from the program is the maximum claim amount, which is calculated with a formula including the age of the owner, the interest rate, and the value of the home. The borrower continues to be the owner of the home and may sell it and move anytime, keeping the sales proceeds that exceed the mortgage balance. No repayment is needed until the borrower moves, sells, or dies.
How the HECM Program Works in Keizer Oregon
There are numerous factors to consider before determining if getting a HECM loan in Keizer fits your needs. To aid in this process, you will need to meet with a HECM counselor to talk about program eligibility standards, financial implications and alternatives to receiving a HECM reverse mortgage in Keizer and repaying the loan. Counselors will also go over provisions for the mortgage becoming due and payable. Upon the completion of HECM counseling, you should be able to make an independent, knowledgeable decision of whether this product will meet your specific needs. You can look online for a HECM counselor or call (800) 569-4287 toll-free.
There are borrower and Keizer property eligibility qualifications that must be met. You should use the list below to see if you qualify. When you meet the eligibility criteria, you can complete a reverse mortgage application by contacting an FHA-approved lender. You can search online for a FHA-approved lender or ask the HECM counselor to provide you with a listing. The mortgage company will discuss other qualifications of the HECM program, such as initial year payment limitations, available payment options, the loan approval process, and repayment terms.
HECM Borrower Requirements Living in Keizer Oregon
You must:
- Be 62 years old or older
- Own the house outright or paid-down a large amount
- Occupy the house as your primary residence
- Not be delinquent on any federal debt
- Have financial resources to continue in order to make timely payment of recurring property charges such as property taxes, insurance and Homeowner Association fees, etc.
- Participate in a consumer information session given by a HUD- approved HECM counselor
Keizer Property Requirements with the HECM
The following eligible property types in Keizer are required to meet all FHA property standards and flood requirements:
Single family home or 2-4 unit home with one unit occupied by the borrower
HUD-approved condo project
Manufactured home that meets FHA requirements
HECM Financial Requirements of Borrowers in Keizer Oregon
Income, assets, monthly cost of living, and credit standing are going to be verified.
Timely payment of real eOregon taxes, hazard and flood insurance premiums are going to be verified
For adjustable interest rate mortgages, you may select one of the following payment plans:
Tenure – equal monthly payments provided that at least one borrower lives and continues to inhabit the property as a principal residence.
Term – equal monthly payments for a fixed period of months selected.
Line of Credit – unscheduled payments or in installments, at times and in an amount of your choosing up until credit line is exhausted.
Modified Tenure – combination of line of credit and scheduled monthly payments as long as you remain in the home.
Modified Term – combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.
For fixed rate HECM, you will receive the Single Disbursement Lump Sum payment plan.
HECM Mortgage Amounts Are Based On the Following
The amount you may borrow would depend on:
Age of the youngest borrower or eligible non-borrowing spouse
Current interest rates; and
Lesser of:
appraised value;
the HECM FHA mortgage limit of $679,650; or
the sales price (only applicable to HECM for Purchase)
If there is more than one borrower and no eligible non-borrowing spouse, the age of the youngest borrower must be used to determine the amount you are able to borrow.
HECM Loan Costs
You can pay for almost all costs of a Keizer HECM by financing them and having them paid from the proceeds of the loan. Financing the fees means you do not have to pay for them out of your pocket. Conversely, financing the fees decreases the net loan amount available to you.
The HECM loan includes several fees and charges, which includes: 1) mortgage insurance premiums (initial and annual) 2) third party charges 3) origination fee 4) interest and 5) servicing fees. The lender will discuss which fees and charges are mandatory.
You will be charged an initial mortgage insurance premium (MIP) at closing. The initial MIP will be 2%. Over the life of the loan, you will be charged an annual MIP that equals 0.5% of the outstanding mortgage balance.
Mortgage Insurance Premium
You will incur a cost for FHA mortgage insurance. The mortgage insurance guarantees that you’re going to receive expected loan advances. You can finance the mortgage insurance premium (MIP) as part of your loan.
Third Party Charges
Closing costs from third parties can include an appraisal, title search and insurance, surveys, inspections, recording fees, mortgage taxes, credit checks and other fees.
Origination Fee
You will pay an origination fee to pay the lending company for processing your HECM loan. A lender can charge the greater of $2,500 or 2% of the first $200,000 of your home’s value plus 1% of the amount over $200,000. HECM origination fees are capped at $6,000.
Servicing Fee
Loan companies in Keizer or their agents provide servicing through the entire life of the HECM. Servicing consists of sending you account Oregonments, disbursing loan proceeds and making certain that you satisfy loan guidelines including paying property taxes and hazard insurance premium. Lenders may charge a monthly servicing fee of no more than $30 if the loan has an annually adjusting interest rate or has a fixed interest rate. The lender may charge a monthly servicing fee of no more than $35 if the interest rate adjusts monthly. At loan closing, the lender sets aside the servicing fee and deducts the fee from your available funds. Each month the monthly servicing fee is added to your loan balance. Lenders may also choose to include the servicing fee in the mortgage interest rate.
Shopping for a Home Equity Conversion Mortgage in Keizer Oregon
If you are entertaining the idea of getting a HECM in Keizer, shop around. Decide which type of HECM could be best for you. That may depend on what you would like to do with the cash. Compare your options, terms, and fees from several HECM mortgage lenders in Keizer. Learn as much as you are able to about reverse mortgages before you talk with a counselor or loan officer. And ask lots of questions to ensure a HECM will work for you – and that you’re receiving the right kind for you.
Here are some things to consider:
Do you want a reverse mortgage to pay for home repairs or property taxes? In that case, determine whether you are a candidate for any low-cost single purpose loans in your Keizer. Staff members at the Keizer Area Agency on Aging may know about the opportunities in your Keizer. Find the nearest agency on aging at eldercare.gov, or call 1-800-677-1116. Ask about “loan or grant programs for home repairs or improvements,” or “property tax deferral” or “property tax postponement” programs, and ways to apply.
Are you living in a higher valued property? You may be able to borrow more money using a proprietary reverse mortgage. But the more you borrow, the bigger the fees you will pay. Additionally you might consider a HECM loan. A HECM counselor or a lender in Keizer can assist you assess these kinds of loans side-by-side, to determine what you’ll get – and what it costs.
Evaluate fees and costs. This bears repeating: research prices and look at the costs of the HECM loans available to you in Keizer. Although the mortgage insurance premium is usually the same between various lenders, nearly all loan costs – including origination fees, interest rates, closing costs, and servicing fees – can vary among banking institutions.
Understand total costs and loan repayment. Ask a counselor or lender to explain the Total Annual Loan Cost (TALC) rates: they show the expected annual average cost of a HECM, which includes all of the itemized costs. And, regardless of the form of HECM you’re considering in Keizer, understand all the reasons why your loan may need to be repaid prior to were planning on it.
What You Need To Know About HECM Loans in Keizer Oregon
If you get a HECM of any type, you get a loan in which you borrow from the equity in your home. You keep the title to your home. Instead of paying monthly mortgage payments, though, you receive an advance on part of your home equity. The cash you obtain usually is not taxable, and it generally will not affect your Social Security or Medicare benefits. Once the very last surviving borrower dies, sells the home, or no longer resides in the house as a principal residence, the loan will have to be repaid. In certain situations, a non-borrowing spouse may be able to stay in the home. Here are some items to consider about home equity conversion mortgages in Keizer Oregon:
You owe more over time. As you borrow money through your home equity conversion mortgage, interest is added onto the balance you owe every month. That means the total amount you owe increases as the interest on your loan adds up over time.
Interest rates might adjust over time. Most HECM’s have variable rates, which are linked with a financial index and adjust with the market. Variable rate loans normally present you with additional choices on how you get your money through the HECM loan. Several reverse mortgages – mostly HECMs – offer fixed rates, but they tend to demand that you take your loan as a lump sum at closing. Typically, the amount you can borrow is lower than you can get with a variable rate loan.
Interest isn’t tax deductible each year. Interest on reverse mortgages is not deductible on income tax returns – until the loan is paid off, either partially or in full.
You must pay other costs connected with your home. In a HECM, you keep the title to your
Keizer home. That means you are responsible for property taxes, insurance, utilities, fuel, maintenance, along with other expenses. And, if you don’t pay your property taxes, keep homeowner’s insurance, or maintain the home, the lender might require you to repay your loan. A financial assessment is mandatory when you apply for the mortgage. As a result, your lender may require a “set-aside” amount to pay your taxes and insurance during the loan. The “set-aside” reduces the amount of funds you can get in payments. You are still responsible for maintaining your home.
What happens to your spouse? With HECM loans, if you signed the loan paperwork and your spouse didn’t, in certain situations, your husband or wife may continue to reside in the home even after you pass away if he or she pays taxes and insurance, and will continue to maintain the property. But your spouse will stop receiving money from the HECM, since he or she wasn’t part of the loan agreement.
What can you leave to your heirs? HECM’s may use up the equity in your home, which means fewer assets for you and your heirs. Most reverse mortgages have something called a “non-recourse” clause. Which means you, or your eOregon, can not owe more than the value of your home once the loan becomes due and the home is sold. With a HECM, generally, if you or your heirs need to pay off the loan and retain the home rather than sell it, you will not have to pay more than the appraised value of the home.
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