HECM in Gresham Oregon - Home Equity Conversion Mortgage

What You Ought To Know About Obtaining A HECM in Gresham Including, Options, Costs, Requirements and Finding The Best Offer

The HECM program enables elderly homeowners in Gresham Oregon to take out a portion 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 credit line. This reverse mortgage loan allows families to stay 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 at any time, keeping the sales proceeds that exceed the mortgage balance. No repayment is necessary up until the borrower moves, sells, or dies.

How the HECM Program Works in Gresham Oregon

There are a number factors to consider before determining if acquiring a HECM loan in Gresham meets your needs. To assist in this process, you will need to meet with a HECM counselor to talk about program eligibility requirements, financial implications and alternatives to getting a HECM reverse mortgage in Gresham and repaying the loan. Counselors will also discuss provisions for the mortgage becoming due and payable. Upon the completion of HECM counseling, you should be capable of making a completely independent, educated 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 is borrower and Gresham property eligibility requirements that must be met. You may use the listing below to see if you qualify. Should you meet the eligibility criteria, you can complete a reverse mortgage application by contacting a FHA-approved lender. You can look online for a FHA-approved lender or you can request the HECM counselor to provide you with a listing. The mortgage company will discuss other qualifications 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 Gresham Oregon

You must:

Be 62 years of age or older
Own the house outright or paid-down a large amount
Occupy the property as your principal residence
Not be delinquent on any federal debt
Have financial resources to continue for making timely payment of recurring property charges which includes property taxes, insurance and Homeowner Association fees, etc.
Take part in a consumer information session given by a HUD- approved HECM counselor

Gresham Property Requirements with the HECM

The following eligible property types in Gresham 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 condominium project
Manufactured home that meets FHA requirements

HECM Financial Requirements of Borrowers in Gresham Oregon

Income, assets, monthly living expenses, and credit profile are going to be verified.
Timely payment of real eOregon taxes, hazard and flood insurance premiums will be verified

For adjustable interest rate mortgages, you are able to select one of the following payment plans:

Tenure – equal monthly payments provided that at least one borrower lives and continues to inhabit the property as a principal 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 up until line of credit is depleted.
Modified Tenure – combination of line of credit and scheduled monthly payments as 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 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 will depend on:

Age of the youngest borrower or eligible non-borrowing spouse
Current interest rates; and
Lesser of:
appraised value;
the HECM FHA mortgage limit of $679,650; or
the sales price (only applicable to HECM for Purchase)

Whether 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’re able to borrow.

HECM Loan Costs

You can pay for most of the costs of a Gresham HECM by financing them and having them paid from the proceeds of the loan. Financing the fees means that you do not have to pay for them out of your pocket. Having said that, financing the costs decreases the net loan amount available to you.

The HECM loan includes several charges and fees, which includes: 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 compensate the lender for processing your HECM loan. A lender may charge the greater 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
Lenders in Gresham or their agents provide servicing through the entire life of the HECM. Servicing includes sending you account Oregonments, disbursing loan proceeds and making certain that you stay up with loan guidelines which include paying property 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 Gresham Oregon

If you are considering getting a HECM in Gresham, shop around. Choose which type of reverse mortgage loan may be right for you. That could depend on what you want to do with the loan. Do a comparison of your choices, terms, and fees from several HECM mortgage companies in Gresham. Learn as much as you are able to about reverse mortgages before you speak with a counselor or mortgage company. And ask plenty of questions to ensure a HECM will work for you – and that you’re receiving the right kind for you.

Here are some things to consider:

Are you wanting a HECM loan to pay for home repairs or property taxes? If that’s the case, find out if you are a candidate for any low cost grants in your Gresham. Staff members at the Gresham Area Agency on Aging may know about the opportunities in your Gresham. Look for 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.

Are you living in a higher valued home? There’s a chance you’re in the position to borrow more money by using a proprietary reverse mortgage. But the more you borrow, the higher the fees you will pay. You also might take into consideration a HECM loan. A HECM counselor or a lender in Gresham can help you evaluate these types of loans side by side, to determine what you’ll get – along with what it costs.

Evaluate fees and rates. This bears repeating: research prices and look at the costs of the HECM loans available to you in Gresham. Even though the mortgage insurance premium is usually the same from lender to lender, virtually all loan costs – including origination fees, interest rates, closing costs, and servicing fees – fluctuate among lenders.

Understand total costs and loan repayment. Ask a counselor or lender to explain the Total Annual Loan Cost (TALC) rates: they show the expected annual average cost of a HECM, including all the itemized costs. And, no matter what form of HECM you’re thinking about in Gresham, understand all the reasons why your loan may need to be repaid before you were planning on it.

What You Need To Know About HECM Loans in Gresham Oregon

If you get a HECM of any kind, you receive a loan in which you borrow against the equity in your house. You keep 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 receive usually is not taxable, and it usually won’t affect your Social Security or Medicare benefits. Once the last 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 continue to live in the home. Here are some things to consider about home equity conversion mortgages in Gresham Oregon:

You owe more over time. As you get money through your home equity conversion mortgage, interest is added onto the total amount you owe each month. This means the amount you owe increases as the interest on your loan adds up over time.

Interest rates might adjust over time. Almost all HECM’s have variable rates, that are linked with a financial index and adjust with the market. Variable rate loans tend to present you with more options on how you get your money through the HECM loan. Some reverse mortgages – mostly HECMs – offer fixed interest rates, however they generally require that you take your loan as a lump sum at closing. Frequently, the amount you can borrow is lower than you can get with a variable interest rate loan.

Interest is not 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 related to your home. In a HECM, you retain the title to your
Gresham home. That means you are responsible for property taxes, insurance, utilities, fuel, maintenance, along with other expenses. And, if you don’t pay your property taxes, keep homeowner’s insurance, or take care of your home, the lender might require you to repay your loan. A financial assessment is required when you apply for the mortgage. As a result, your lender might demand 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 a few instances, your husband or wife may continue to reside in the home even after you die if he or she pays taxes and insurance, and continues to take care of the property. But your spouse will stop getting money from the HECM, since he or she wasn’t part of the loan agreement.

What can you leave to your heirs? HECM’s can use up the equity in your home, this means less assets for you and your beneficiaries. Most reverse mortgages have something called a “non-recourse” clause. Which means you, or your eOregon, can not owe more than the value of your home once the loan becomes due and the home is sold. With a HECM, generally, should 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.