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Reverse Mortgages Home
What are Reverse Mortgages?
Who is eligible for them?
Types of Reverse Mortgages
Why choose Reverse Mortgages
Paying back Reverse Mortgages
Questions to ask lenders
Their disadvantages
Reverse Mortgage requirements
Origination and MIP Fees
Dealing with closing costs
The process of getting one
What is the HECM?
Appraisal Fees
Servicing Set-Aside
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There are four major types of reverse mortgages in the United States. The Home Equity Conversion Mortgage (HECM) is by far the largest of those companies offering reverse mortgages.
Home Equity Conversion Mortgage (HECM) is the oldest and most popular reverse mortgage product, providing 90% of all reverse mortgages in the United States. The HECM has been available for homeowners over the age of 62 since 1989. These loans are insured by the federal government through the Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development.
Fannie Mae is the nation's largest investor of home mortgages. In 1996, Fannie Mae developed the Home Keeper® reverse mortgage as an alternative to the HECM. The Home Keeper was developed to address needs not served by the HECM program, such as homeowners with high property values, condominium owners, and seniors wishing to use a reverse mortgage to purchase a new home. The Home Keeper can be used for a home purchase in a single transaction increasing seniors’ abilities to sell former homes and buy new homes with ease.
Several years ago, the California-based company, Financial Freedom Senior Funding Corporation, created a "jumbo" reverse mortgage loan called Cash Account; this loan was created to help homeowners who are living in homes that were valued higher than the HECM and Fannie Mae requirements.
In 2004, the Financial Freedom Senior Funding Corporation introduced the Simply Zero Cash Account™, the first reverse mortgage loan to eliminate all up-front costs. With this loan, borrowers are required to draw 100% of their maximum available benefit at loan closing, but the interest rate structure remains the same as that of the standard account. These loans remain the only “jumbo” reverse mortgage loans on the market.
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