HECM

HECM in Tualatin Oregon – Home Equity Conversion Mortgage

May 8, 2018 /

What You Should Know About Obtaining A HECM in Tualatin Including, Options, Costs, Requirements and Receiving The Best Deal

The HECM program allows elderly homeowners in Tualatin Oregon to withdraw some of the equity in their home in the form of monthly payments for life or a fixed term, or in a lump sum, or through a credit line. This reverse mortgage loan program allows families to stay in their home while using a portion of its equity. The total income that an owner will get 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 at any time, keeping the sales proceeds that exceed the mortgage balance. No repayment is required up until the borrower moves, sells, or dies.

How the HECM Program Works in Tualatin OR

There are several things to consider before deciding if getting a HECM loan in Tualatin meets your needs. To help in this process, you must meet with a HECM counselor to discuss program eligibility requirements, financial implications and alternatives to obtaining a HECM reverse mortgage in Tualatin and repaying the loan. Counselors will talk about provisions for the mortgage becoming due and payable. Upon the completion of HECM counseling, you will be able to make a completely independent, knowledgeable decision of whether the 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 Tualatin property eligibility requirements that must be met. You may use the listing below to see if you qualify. In the event 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 you can request the HECM counselor to provide you a list. The mortgage company will discuss other qualifications of the HECM program, for instance initial year payment limitations, available payment options, the loan approval process, and repayment terms.

HECM Borrower Requirements Living in Tualatin OR

You must:

  • Be 62 years of age or older
  • Own the house outright or paid-down a considerable amount
  • Occupy the property as your principal residence
  • Not be delinquent on any federal debt
  • Have financial resources to continue in order to make timely payment of recurring property charges which include property taxes, insurance and Homeowner Association fees, etc.
  • Take part in a consumer information session given by a HUD- approved HECM counselor

HECM TualatinTualatin Property Requirements with the HECM

The following eligible property types in Tualatin will need 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 Tualatin OR

Income, assets, monthly living expenses, and credit rating will be verified.
Timely payment of real estate taxes, hazard and flood insurance premiums are going to be confirmed

For adjustable interest rate mortgages, you may choose one of the following payment plans:

Tenure – equal monthly payments so long as no less than one borrower lives and continues to occupy the property as a primary 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 line of credit is depleted.
Modified Tenure – combination of line of credit and scheduled monthly payments so long as you live 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 home loans, you will receive the Single Disbursement Lump Sum payment plan.

HECM Mortgage Amounts Are Based On the Following

The amount you may borrow is determined by:

Age of the youngest borrower or eligible non-borrowing spouse
Current rates; and
Lesser of:
appraised value;
the HECM FHA mortgage limit of $679,650; or
the sales price (only applicable to HECM for Purchase)

Whether there is more than one borrower and no eligible non-borrowing spouse, the age of the youngest borrower is used to determine the amount you are able to borrow.

HECM Loan Costs

You can pay for most of the costs of a Tualatin HECM by financing them and having them paid from your proceeds of the loan. Financing the costs means you don’t 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 charges and fees, 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 will 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 lender 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
Mortgage lenders in Tualatin or their agents provide servicing through the entire life of the HECM. Servicing includes sending you account Oregonments, disbursing loan proceeds and making certain that you satisfy loan requirements such as 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 onto 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 Tualatin OR

If you’re considering getting a HECM in Tualatin, check around. Determine which type of reverse mortgage loan could be best for you. That could depend on what you would like to do with the loan. Evaluate your options, terms, and fees from several HECM loan companies in Tualatin. Learn as much as you can about reverse mortgages before you talk with a counselor or loan officer. And ask plenty of questions to be sure a HECM will work for you – and that you’re receiving the right kind for you.

Here are some things to consider:

Would you like a HECM to pay for home repairs or property taxes? If you do, determine whether you qualify for any low-cost grants in your Tualatin. Employees at the Tualatin Area Agency on Aging may know about the programs in your Tualatin. Look for 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 high value property? You may be in the position to borrow more money using a proprietary reverse mortgage. But the more you borrow, the bigger the fees you’ll pay. Additionally you might take into consideration a HECM loan. A HECM counselor or a lender in Tualatin can assist you assess these types of loans side by side, to determine what you will get – as well as what it costs.

Evaluate fees and costs. This bears repeating: shop around and compare the costs of the HECM loans available to you in Tualatin. Even though the mortgage insurance premium is normally the same amongst numerous lenders, nearly all loan costs – including origination fees, interest rates, closing costs, and servicing fees – vary between mortgage lenders.

Understand total costs and loan repayment. Ask a counselor or lender to explain the Total Annual Loan Cost (TALC) rates: they show the estimated annual average cost of a HECM, which include all of the itemized costs. And, no matter what type of HECM you’re thinking of in Tualatin, recognize all the reasons why your loan might have to be repaid before you were planning on it.

What You Need To Know About HECM Loans in Tualatin Oregon

If you get a HECM of any type, you receive a loan in which you borrow against the equity in your home. You retain the title to your home. Instead of paying monthly mortgage payments, though, you get an advance on part of your home equity. The cash you will get usually is not taxable, and it usually will not affect your Social Security or Medicare benefits. When the final surviving borrower dies, sells the home, or no longer lives in the house as a primary residence, the HECM will have to be repaid. In certain situations, a non-borrowing spouse may be able to continue to live in the home. Here are a few items to consider about home equity conversion mortgages in Tualatin OR:

You owe more over time. As you get money through the home equity conversion mortgage, interest is added onto the total amount you owe every month. This means the 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 interest rates, which are tied to a financial index and adjust with the market. Variable rate loans normally present you with more choices on how you get your money through the HECM loan. Some reverse mortgages – mostly HECMs – offer fixed rates, however they generally require you to take your loan as a lump sum at closing. Typically, the total amount you can borrow is lower than you have access to with a variable rate loan.

Interest isn’t tax deductible every 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
Tualatin home. This means you are responsible for property taxes, insurance, utilities, fuel, maintenance, as well as other expenses. And, if you don’t pay your property taxes, keep homeowner’s insurance, or take care of your 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 might demand 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 spouse may continue to live in the home even after you pass on if he or she pays taxes and insurance, and will continue to maintain the property. However, your spouse will stop getting money from the HECM, since he or she wasn’t part of the loan agreement.

What can you leave to your heirs? HECM’s can use up the equity in your home, which implies fewer assets for you and your heirs. Most reverse mortgages have something called a “non-recourse” clause. Which means you, or your estate, can’t 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 want to pay off the loan and keep the home instead of sell it, you would not have to pay more than the appraised value of the home.