A portion of the borrower’s home value is provided to qualified homeowners. If your heirs sell the home, the lender will take the proceeds from the sale as payment on the loan, and the FHA insurance will cover any remaining loan balance. Assume you are 65 and own a $300,000 home with $50,000 left to pay off on an existing mortgage. ALL PRODUCTS: Informed Consumer Choice (12/20) Model Appraisal Exterior-Only Certification (3/20) Model Appraisal Desktop-Only Certification (3/20) Valid for appraisals with effective dates through October 31, 2020 (See ML 2020-37) It’s John Doe again, BUT instead of owing $80,000.00, he owes $170,000.00. This is a compilation of loan documents that you may see during the reverse mortgage process. (This is not a quote on current interest rates, and simply an example for illustrative purposes. Reverse mortgage is a loan which provides additional source of income for senior citizens who have a self-acquired or self-occupied home in India. Reverse mortgage payments can be obtained as a one-time lump sum disbursement, a line of credit, or in fixed monthly payments. Reverse Mortgage Examples (basic scenario info) #2. Keywords: Disclosure, Federal Reserve Board, TILA, Mortgage Created Date: 10/7/2010 3:22:52 PM A reverse mortgage is a mortgage loan, usually secured by a residential property, that enables the borrower to access the unencumbered value of the property. K-4: Reverse Mortgage Sample Form Early Open End Author: Board of Governors of the Federal Reserve System Subject: This is a disclosure that was proposed by the Board of Governors of the Federal Reserve System in August 2010. The borrower is paid payments by the lender against the mortgage. Yet, that does not mean that you immediately get access to $120,000. FACT: A reverse mortgage can NEVER generate income. Rather than making a payment each month as you would on a “forward” mortgage, you’d receive funds from your lender in the form of a lump sum, monthly payout or line of credit. A reverse mortgage generates monthly ‘income’. The documents below are categorized by all programs, forward and reverse mortgages. A reverse mortgage is available to … A reverse mortgage gives you a portion of your home’s equity. FACT: If that truly were the case, the available proceeds would be considerably less. The loans are typically promoted to older homeowners and typically do not require monthly mortgage payments. Borrowers can also take a combination of a credit line with fixed monthly payments. Let’s use all the same variables as above. For both forms, if the mortgage applied for is a HECM, the HUD/VA Addendum (HUD 92900-A) must be completed. Reverse Mortgage Loan Eligibility Criteria. These model loan documents provide an overview of the documents used to originate and fund a reverse mortgage. They are examples, or model, loan documents and should not be relied upon as an offer to lend. Mortgage rates change all the time. The interest rate on this theoretical reverse mortgage is 5.000 percent. for Reverse Mortgage (Fannie Mae Form 1009) or the Uniform Residential Loan Application (Freddie Mac Form 65/Fannie Mae Form 1003). For current rates on a reverse mortgage loan contact an Alpha Reverse Mortgage Banker.) With a reverse mortgage loan, if the balance is more than the home is worth, your heirs don’t have to pay the difference. An estate heir wants to pay the reverse mortgage off (perhaps waiting for life insurance money to come in for example); An estate heir wants to get a loan on the home to pay the reverse mortgage off; If you have lost a loved one who had a reverse mortgage contact us to discuss next steps. He’ll also have to go with the option that yields the highest loan amount of $146,720.00. 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