Q&A About Reverse Mortgage
Who is Eligible?
To apply for reverse mortgages in Utah, homeowners must be 62 years or older. They must own their home free and clear, with no liens, unless they can be paid by the reverse mortgage loan (such as the balance on a traditional mortgage). Read more»
Finding the Best Reverse Mortgage
When a homeowner decides to apply for a reverse mortgage or other home loan, it is important to locate the most favorable reverse mortgage or mortgage refinance rates in Utah.
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Myths and Facts About Reverse Mortgages
Seniors who have built up home equity in Utah may have some questions about how to best leverage it to get the right loan for their situation.
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Shopping for Home Mortgage Rates
When you are shopping for home mortgage rates in Utah, the first step is to determine which type of home loan product is best for you.
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Which Is Better For You?
When you are looking for the best way to leverage the equity you have built in your home, it is important to compare all of the available options.
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A reverse mortgage in Utah is different from all other forms of loans (including home equity line of credit loans) because the principal and interest on the loan are not due as long as the homeowner lives in the home, maintains it, and stays current with the property taxes and insurance. A reverse mortgage differs from a traditional mortgage, because it uses the equity in the home as collateral for the loan, and requires no monthly payments until the loan is due about six months after the homeowners permanently move out of the house or pass away.
Funds from a reverse mortgage can be used to pay off a traditional mortgage, thus ending required monthly mortgage payments. The money can also be used to pay for medical treatment or for daily living expenses. It is not advisable to obtain a reverse mortgage in Utah to invest in high risk stocks, real estate deals, or annuities. The loan monies can be distributed in a lump sum, a monthly allotment, a line of credit, or a combination. The homeowner never makes a monthly loan payment on a reverse mortgage.
Seniors who are trying to learn more about what a reverse mortgage is in Utah should know several other key facts about reverse mortgages. One is that unlike other types of loans, your income, credit rating, and health are not usually factors in approval for the loan. In addition, you can stay in your house for the rest of your life. You cannot “outlive” a reverse mortgage. When the last homeowner either moves out of the house or passes away, the estate has about six months to either pay the balance of the reverse mortgage or to sell the home. The proceeds from the home sale go first to repay the reverse mortgage lender, and all other proceeds go to the heirs. If the house sells for less than the balance owed on the reverse mortgage, the senior or their estate are not responsible for the difference. Nor can other valuable assets like cars, investments, or other property be seized to cover any shortfall between the loan and the selling price of the home.
The FHA (Federal Housing Administration) oversees the majority of reverse mortgages, and has strict guidelines in place to protect seniors and their heirs. To ensure that homeowners make an informed decision about whether a reverse mortgage in Utah is right for them, mandatory counseling is a required part of the loan application process. There are specific criteria for eligibility for a reverse mortgage in Utah, including the appraised value of the home, amount of equity in the home, the interest rate and type (fixed or variable), and the age of the youngest homeowner. A reverse mortgage calculator can help homeowners find out the size of loan for which they might be eligible. FHA mortgage insurance guarantees that the FHA will assume the loan if the reverse mortgage lender becomes financially troubled.
So what is a reverse mortgage in Utah? In summary, if you are 62 or older, own your home, have equity in your home, and need money to cover expenses or pay off a traditional mortgage, you might qualify for a reverse mortgage in Utah.
