A reverse mortgage is a non-recourse loan, which means the borrower (or the borrower's estate) of a reverse mortgage will not owe more than the future loan balance or the value of the property, whichever is less.
In general, the more your home is worth, the older you are, and the lower the interest rate, the more you will be able to borrow. The maximum amount that can be borrowed on a particular loan program is based on these factors:
If the borrower or representatives of his or her estate choose to sell the property to pay off the reverse mortgage loan, no assets other than the home will be used to repay the debt. If the borrower or his or her estate wishes to retain the property, the balance of the loan must be paid in full.
A reverse mortgage is the opposite of a traditional mortgage. With a traditional mortgage, you borrow money and make monthly principal and interest mortgage payments. With a reverse mortgage, however, you receive loan proceeds based on the value of your home, the age of the youngest borrower, and the interest rate of your loan. You do not make monthly principal and interest mortgage payments for as long as you live in, maintain your home in good condition, and pay property taxes and insurance. The loan must be repaid when you pass away, sell your home, or no longer live in the home as your primary residence.
If you're age 62 or older, a Home Equity Conversion Mortgage (HECM) for Purchase from Bank of England Mortgage may be a smart choice for financing a new place to call home.
Home Equity Conversion Mortgage (HECM)
A Home Equity Conversion Mortgage, or HECM, is the only reverse mortgage insured by the U.S. Federal Government, and is only available through an FHA-approved lender.
Rather than having to seek conventional financing, borrowers age 62 and older can purchase a new residence while eliminating mortgage payments* through a reverse mortgage (Of course, they’ll still be responsible for paying property taxes and required homeowners’ insurance). This may help them more comfortably afford an upgrade, or spend less money out-of-pocket. Retiring Boomers are choosing to maintain a comfortable lifestyle in a home that better fits their needs. You own the home, with your name on the title and the home purchase and a reverse mortgage closing are rolled into one, making your process simpler.
Get pre-approved today with Bank of England MortgageClick Here!