Mortgage Blog

Estero Reverse Mortgage

Homeowners in Lee County who are over the age of 62 and meet other eligibility requirements may be eligible for a Estero reverse mortgage. These mortgages are specifically designed to allow homeowners who have significant equity in their homes access to immediate cash. Another little known feature of a reverse mortgage is it may be used to purchase a home.

Reverse mortgage qualifications

HECMs, or Home Equity Conversion Mortgages are generally called reverse mortgages. They are not available to all borrowers. Before you can use an Estero HECM loan you must meet specific requirements including:

  • Age — the borrower must be at least 62 years old. If there is a spouse who is younger, there are loan limits that may be based on the other spouses age whether they are a co-borrower or not.
  • Property types — an HECM may only be used for a home intended to be a primary residence. Borrowers may use a reverse mortgage on a home that has up to four units provided they occupy at least one unit. If the home is a manufactured home or condo, it must be HUD approved. There has to be sufficient equity in the home to qualify for an Estero HECM loan.
  • Income verification — borrowers must have sufficient resources to make regular payments of property taxes, association fees, and insurance payments to be qualified for a reverse mortgage.
  • Debt verification — a borrower who has any type of past-due federal debt, such as taxes or student loans, will not be eligible for an HECM.
  • Counseling — all borrowers who are considering a reverse mortgage must meet with an HUD-approved HECM counselor for an information session.

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Features of a reverse mortgage

When you meet with an experienced Estero reverse mortgage specialist, there are some things which they will explain about how the HECM loan works. For example, these are generally considered a non-recourse loan; unlike a regular mortgage. Borrowers will not be required to make a mortgage payment; though you will still have to make other payments such as taxes, insurance, etc. Whomever is responsible for your estate will not be required to repay the loan upon the death of the borrower. You can either sell if any equity or the lender will take over the loan and foreclose on the mortgage.

There are specific loan limits that are set by HUD for a reverse mortgage. While a standard FHA loan is $294,515 in Lee County, HECM loans are capped at $625,500. This is good news for seniors who own their home outright or owe very little money. Keep in mind, the fees associated with a reverse mortgage may be paid from the proceeds of the Estero HECM loan as well.

Unlike a standard mortgage, your credit score will not hold as much importance. Naturally, a reverse mortgage lender will want to ensure you are paying home-related expenses, but they tend to be far more flexible about other obligations. Because you are not expected to repay the reverse mortgage, debt to income ratios are not given high consideration.

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Using an Estero reverse mortgage to purchase a home

Before you can use an HECM to purchase a home, you should be aware the maximum reverse mortgage amount will be 47 percent to 52 percent of the purchase price. The borrower must be able to come up with the balance of the purchase price from savings to include retirement accounts. Many of the same rules for these mortgages apply to regular reverse mortgages, including the age of the borrower must be 62, and the home must be intended for use as a primary residence.

If you would like to learn more about an Estero reverse mortgage, either to get cash from the existing equity in your home, or to purchase a home, contact us today for help.

Programs do change frequently and changes can occur so we want to give a disclaimer. Rates, programs, guidelines are subject to change without notice. We are not affiliated with any government agency.

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