A reverse mortgage can be one particular way in which a senior homeowner can acquire an additional source of income during their retirement years. A FHA reverse mortgage, also known as a Home Equity Conversion Mortgage, (HECM), is insured through the government, and allows senior citizens to exchange the equity in their home for a sum of cash. If you are 62 years of age or older, and looking into refinancing your home while supplementing your income, contact Dan Turner with Geneva Financial. Our loan specialists work closely with borrowers in Hawaii, Illinois, and Ohio to determine the most suitable loan options for each client.

What Is A FHA Reverse Mortgage?

A FHA reverse mortgage, (or HECM), is a loan that is backed and regulated by the Federal Housing Administration, (FHA). It allows senior citizens to convert equity that they have built up in their home into monthly payments of cash or a line of credit. Loan and interest payments are deferred on an HECM until the borrower moves or sells the home, or passes away, and at that time, the loan must then be repaid. The borrower can use the funds they receive from the loan for anything they want, including home maintenance, health care expenses, travel, etc.

Since a FHA reverse mortgage is insured through the government, the loan guidelines are more regulated than privately funded reverse mortgages in order to protect both lenders and borrowers. Although mortgage terms with private lenders can sometimes provide lower overall cost and a higher borrowing amount, FHA reverse mortgages tend to have lower interest rates.

Requirements For a FHA Reverse Mortgage

In order to qualify for a FHA reverse mortgage, a borrower must meet the following requirements:

• The borrower must be 62 years or older and live in the home as their primary residence
• The borrower must own the home or have paid off a significant amount owed
• The borrower must complete loan counseling sessions to ensure they understand the loan process and implications
• The borrower must prove that they have adequate finances to pay for required housing costs, such as property taxes, HOA fees, homeowner’s insurance, etc.
• The borrower must not be delinquent on any federal debts

Additionally, the property must be one of these types:

• A approved condominium
• A single family home
• A manufactured home meeting FHA stipulations

Obtaining a FHA Reverse Mortgage

If you are a senior citizen looking to refinance your home, while trying to attain an additional source of income, and are located in the regions of Hawaii, Illinois, and Ohio, contact Dan Turner with Geneva Financial to see if a FHA reverse mortgage is a beneficial option for you. We can help you determine your eligibility, and the best refinancing solution for your situation.