HECM in Tigard Oregon - Home Equity Conversion Mortgage

What You Want To Know About Getting A HECM in Tigard Including, Options, Costs, Requirements and Getting The Best Offer

The HECM program makes it possible for elderly homeowners in Tigard Oregon to take 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 loan program allows families to remain in their home while using some of its equity. The total income that an owner will get through 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 required up until the borrower moves, sells, or dies.

How the HECM Program Works in Tigard Oregon

There are several things to consider before deciding if acquiring a HECM loan in Tigard fits your needs. To help in this process, you are required to meet with a HECM counselor to go over program eligibility standards, financial implications and alternatives to receiving a HECM reverse mortgage in Tigard and repaying the loan. Counselors will talk about provisions for the mortgage becoming due and payable. Upon the conclusion of HECM counseling, you should be capable of making a completely independent, well informed decision of whether the reverse mortgage will meet your specific needs. You can search online for a HECM counselor or call (800) 569-4287 toll-free.

There are borrower and Tigard property eligibility qualifications that must be met. You should use the listing below to see if you qualify. Should you meet the eligibility criteria, you can complete a reverse mortgage application by contacting an FHA-approved lender. You can look online for a FHA-approved lender or you can ask the HECM counselor to provide you a listing. The mortgage company will discuss other specifications of the HECM program, such as first year payment limitations, available payment options, the loan approval process, and repayment terms.

HECM Borrower Requirements Living in Tigard Oregon

You must:

Be 62 years of age or older
Own the home outright or paid-down a large amount
Occupy the home as your principal residence
Not be delinquent on any federal debt
Have financial resources to continue 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

Tigard Property Requirements with the HECM

The following eligible property types in Tigard 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 satisfies FHA requirements

HECM Financial Requirements of Borrowers in Tigard Oregon

Income, assets, monthly living expenses, and credit history 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 can choose one of the following payment plans:

Tenure – equal monthly payments as 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 until the line of credit is depleted.
Modified Tenure – combination of line of credit and scheduled monthly payments so long as you continue to 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 interest 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 rate; and
Lesser of:
appraised value;
the HECM FHA mortgage limit of $679,650; or
the sales price (only applicable to HECM for Purchase)

When 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 can borrow.

HECM Loan Costs

You can pay for almost all costs of a Tigard HECM by financing them and having them paid from the proceeds of the loan. Financing the fees means that you don’t have to pay for them out of your pocket. Conversely, financing the costs decreases the net loan amount available to you.

The HECM loan includes several fees and charges, which include: 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 get 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 higher 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 companies in Tigard or their agents provide servicing through the life of the HECM. Servicing includes sending you account Oregonments, disbursing loan proceeds and making certain that you satisfy loan requirements which include paying real eOregon 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 Tigard Oregon

If you are considering getting a HECM in Tigard, check around. Decide which type of reverse mortgage loan might be best for you. That may be determined by what you would like to do with the money. Evaluate the options, terms, and fees from several HECM loan companies in Tigard. Learn as much as you are able to about reverse mortgages before you speak with a counselor or loan company. And ask plenty of questions to ensure that a HECM could work for you – and that you’re receiving the right kind for you.

Here are some things to consider:

Do you need a reverse mortgage to pay for home repairs or property taxes? In that case, determine whether you are eligble for any low cost grants in your Tigard. Staff at the Tigard Area Agency on Aging may know about the programs in your Tigard. 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.

Do you live in a high value property? You might be in the position to borrow more money by using a proprietary reverse mortgage. But the more you borrow, the higher the fees you’ll pay. Additionally you might consider a HECM loan. A HECM counselor or a lender in Tigard can assist you compare these sorts of loans side by side, to determine what you will get – along with what it costs.

Compare fees and costs. This bears repeating: research prices and look at the costs of the HECM loans available to you in Tigard. While the mortgage insurance premium is usually the same amongst numerous lenders, virtually all loan costs – including origination fees, interest rates, closing costs, and servicing fees – 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 reveal the predicted annual average cost of a HECM, which include all of the itemized costs. And, regardless of the kind of HECM you’re considering in Tigard, 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 Tigard Oregon

If you get a HECM of any type, you get a loan in which you borrow from the equity in your house. You retain the title to your home. Rather than paying monthly mortgage payments, though, you will get an advance on part of your home equity. The cash you obtain usually is not taxable, and it usually will not affect your Social Security or Medicare benefits. Once the final surviving borrower dies, sells the home, or no longer lives in the home as a principal residence, the HECM will have to be repaid. In certain situations, a non-borrowing spouse may be able to stay in the home. Below are a few facts to consider about home equity conversion mortgages in Tigard Oregon:

You will owe more over time. As you borrow money using your home equity conversion mortgage, interest is added onto the balance you owe each month. Which means the total amount you owe grows as the interest on your loan adds up over time.

Interest rates could change over time. Nearly all HECM’s have variable interest rates, that are linked with a financial index and change with the market. Variable rate loans tend to provide you with additional options on how you get your money through the HECM loan. Several reverse mortgages – mostly HECMs – offer fixed interest rates, but they generally require you to take your loan as a lump sum at closing. Generally, the amount you can borrow is less than you can get with a variable rate loan.

Interest isn’t tax deductible every year. Interest on reverse mortgages is not deductible on tax returns – until the loan is paid off, either partially or in full.
You have to pay other costs in connection with your home. In a HECM, you retain the title to your
Tigard home. That means you are responsible for property taxes, insurance, utilities, fuel, maintenance, in addition to 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. Because of this, your lender might 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 continues to take care of the property. However your spouse will stop getting money from the HECM, since he or she wasn’t a 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 beneficiaries. Most reverse mortgages have something called a “non-recourse” clause. This means that you, or your eOregon, can not owe more than the value of your home when 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 wouldn’t have to pay more than the appraised value of the home.

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