Utah Mortgages and the Reverse Mortgage
A reverse mortgage is a great way for someone 62 years of age or older to take advantage of the equity in their home with Utah mortgages. A reverse mortgage allows you to borrow against that equity, but instead of continuing to make a payment each month, you will actually receive payment. Hence the term “Reverse” Mortgage. A reverse mortgage shows how owning a home is one of the most important and rewarding purchases you can make in your lifetime.
Altius Mortgage is here to help you decide if a reverse mortgage is right for you when considering Utah Mortgages. As long as you live in your home you will never be required to repay the loan. You also have the option to decide whether to receive monthly payments, a line of credit, or a lump sum.
For more information about Reverse Mortgages in Utah give us a call at (801) 997-5444 and one of our friendly loan officers would be happy to get your questions answered.
Or you may choose to use the ‘chat option’ in the lower right hand corner of our website. All you need to do is type in your question, and an agent will be with you momentarily. It is that easy and convenient to find a reverse mortgage in Utah.
When Is It Wise to Take Out a Reverse Mortgage?
Reverse mortgages are becoming more popular among seniors. They’re a valuable source of supplemental income to achieve safety, security, and a better quality of life upon retirement. They can also help supplement social security or cover emergency expenses. And more importantly, they open the opportunity for seniors to live the retirement that they envisioned.
What are the benefits?
- Eliminates existing monthly mortgage payments
- Stay in your home and maintain the title
- Heirs inherit any remaining equity after paying off the HECM loan
- Federal Housing Administration insured HECM loan program
- Loan proceeds are tax-free
- Homeowner must be at least 62 years old
- Must have sufficient equity in your home
- Single family home, two or four unit owner-occupied home, townhouse, approved condominium or manufactured home.
Funds Available, Payment Options, Interest Rates and Costs:
- Fixed and variable loan rates may be available for Utah mortgages
- Most closing costs and fees can be financed as part of the loan, resulting in little or no up front fees.
- Amount available is based on the age of the youngest borrower, current interest rates, existing Utah mortgages amount, and the lesser of the appraised value of your home, sale price or the maximum lending limit.
- Receive your funds in a lump sum, a regular monthly payment, a credit line, or a combination of these options.
- A proprietary reverse mortgage may also be taken on higher-valued homes, so you can get more funds. Like all reverse mortgages, this option also requires counseling.
Understanding the Home Equity Conversion Mortgage (HECM)
The Home Equity Conversion Mortgage (HECM) is the reverse mortgage program created and issued by the Federal Housing Administration. It lets you withdraw some of the equity in your home however you want, whether in a line of credit, a fixed monthly amount, or a combination of both. There are several HECM programs to choose from, and we are here to help you choose the right one.
The Department of Housing and Urban Development (HUD) is also responsible for assisting and informing seniors with their reverse mortgage. While it is a loan insured by the FHA, a mortgage lender issues the loan. Lenders can also customize reverse mortgages to suit the situation of potential borrowers, but the same rules and regulations surround HECM will still apply. There are several types of HECM options to fit your unique needs and goals of seniors in Utah.
Here are some examples:
HECM Adjustable Rate – Like conventional fixed rate loans, this program provides greater protection from rising interest rates. Both the Monthly and Annual Adjustable Rate options offer the same financial flexibility in terms of how you can withdraw your funds. The difference lies in interest rate adjustments and rate caps.
HECM Fixed Rate – Borrowers usually use this loan to pay off a larger existing mortgage or cover other immediate needs. It gives you the peace of mind that your rate will not increase and you’ll know how much interest is accruing on your loan. Though the risks are lower, you will be required to take all your money in one lump sum at closing.
HECM for Purchase – This loan is popular among seniors wanting to downsize or move close to friends or family. It can also be used to eliminate mortgage payments on the next home and preserve one’s cash.
Apart from HCEM programs, a wide variety of financial institutions are licensed by the HUD to originate reverse mortgages throughout Utah. It’s a good idea to explore your options and compare as many products as you can from HUD-approved lenders.
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