Reverse Mortgage Appraisals

Zimmerman Appraisals is a FHA qualified residential appraisal service, we specialize in FHA and reverse mortgage appraisals.

Here is some information on Reverse Mortgages: Homeowners 62 years and older who have paid off their mortgages or have only small mortgage balances remaining are eligible to participate in HUDís reverse mortgage program. The program allows homeowners to borrow against the equity in their homes.

Homeowners can receive payments in a lump sum, on a monthly basis (for a fixed term or for as long as they live in the home), or on an occasional basis as a line of credit. Homeowners whose circumstances change can restructure their payment options.

Unlike ordinary home equity loans, a HUD reverse mortgage does not require repayment as long as the borrower lives in the home. Lenders recover their principal, plus interest, when the home is sold. The remaining value of the home goes to the homeowner or to his or her survivors. If the sales proceeds are insufficient to pay the amount owed, HUD will pay the lender the amount of the shortfall. The Federal Housing Administration, which is part of HUD, collects an insurance premium from all borrowers to provide this coverage.

The size of reverse mortgage loans is determined by the borrowerís age, the interest rate, and the homeís value. The older a borrower, the larger the percentage of the homeís value that can be borrowed.

For example, based on a loan at todayís interest rates of approximately 9 percent, a 65-year-old could borrow up to 26 percent of the homeís value, a 75-year-old could borrow up to 39 percent of the homeís value, and an 85-year-old could borrow up to 56 percent of the homeís value.

There are no asset or income limitations on borrowers receiving HUDís reverse mortgages.

There are also no limits on the value of homes qualifying for HUD reverse mortgage. However, the amount that may be borrowed is capped by the maximum FHA mortgage limit for the area, which varies depending on local housing costs. As a result, owners of higher-priced homes canít borrow any more than owners of homes valued at the FHA limit.

HUDís reverse mortgage program collects funds from insurance premiums charge to borrowers. Seniors citizens are charged 2 percent of the homeís value as an up-front payment plus one-half percent on the loan balance each year. These amounts are usually paid by the lender and charged to the borrowerís principal balance.

FHAís reverse mortgage insurance makes HUDís program less expensive to borrowers than the smaller reverse mortgage programs run by private lenders without FHA insurance. For more information on reverse mortgages click on the link below:

http://www.hud.gov/offices/hsg/sfh/hecm/hecmabou.cfm

For the HUD website go to: http://www.hud.gov/

For info on Home Equity Conversion Mortgages (HECM) Reverse Mortgages:
http://www.hud.gov/offices/hsg/sfh/hecm/hecmabou.cfm