Federally insured reverse mortgage rules are getting a makeover.

A Home Equity Conversion Mortgage (HECM) refers to a reverse mortgage loan for homeowners 62 years of age or older that is insured by the Federal Housing Adminstration (FHA). 1 Since 1990 there have been more than 1 million HECM reverse mortgages issued. 2 The HECM loan program contains special requirements like HUD counseling and a property value ceiling.

Types of Reverse Mortgages Home Equity Conversion Mortgage HECM (pronounced HEKUM) is the commonly used acronym for a Home Equity Conversion Mortgage, a reverse mortgage created by and regulated by the U.S. Department of Housing and Urban Development.

In a reverse mortgage, you get a loan either as a lump sum, in monthly. They are called home equity conversion mortgages (HECM).. The rule of thumb on the percent you can borrow is your age minus 12, said John.

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§ The alternatives to a reverse mortgage you may have considered Alert Most reverse mortgages today are called Home Equity Conversion Mortgages (HECMs). HECMs are federally insured by the Federal Housing Administration (FHA). This guide covers typical features and requirements for HECM reverse mortgages. Non-HECM reverse

The HECM loan includes several fees and charges, 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.

A federally-insured reverse mortgage comes with the benefit that you, the borrower, will receive loan payments as agreed upon by the terms of your loan, and will never owe more than your home is worth.. Those benefits are guaranteed by the Federal Housing Administration through its Home Equity Conversion Mortgage program, which includes the vast majority of reverse mortgages out there.

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For homeowners who were looking to the federal government’s reverse mortgage program to supply lots. more than 60 percent of what’s available, he or she will get hit by higher mortgage insurance.

Federally insured reverse mortgage rules are getting a makeover. If you are considering applying for a reverse mortgage, take note: The federal housing authority has made changes to its Home Equity Conversion Mortgage program (HECM) effective April 1, 2013.

In recent years, the federal government, which backs reverse mortgages, has ended up with about 10% of loans going into default as a result of unpaid taxes and insurance. once the new rules are in.

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