Persons over 62 with equity in their house might be able to supplement their income and have an emergency fund through the assistance of the Department of Housing and Urban Development. The HUD reverse mortgage an effective way to pull out the equity within your property to assist you with your expenses and put aside a account to aid in case there is an emergency. The idea of a reverse mortgage might be unfamiliar with some therefore clarification may be needed.

When making an application for HUD reverse mortgages the normal documents and papers relevant to a home mortgage are needed. An applicant must satisfy certain requirements. Amongst these are that your house must be occupied by the borrower and should be either a single family home or condominium with not greater than 4 apartments. One apartment must be occupied by the applicant as his primary dwelling. Your home must be possessed outright, or have a very small home loan pay back which will be paid from the earnings of the reverse mortgage. Furthermore HUD mandates that the borrowers undergo a credit and debt counseling service. This is not a free of charge course and the fee must be paid by the borrower. When these requirements are fulfilled the application may proceed.

When accepted for a reverse mortgage loan a residence needs to undergo the standard procedure of assessment involved in a typical mortgage loan. The mortgage loan would have interest building up throughout its term and interest rates and assessment of the house becomes factors throughout the approval process.

When the mortgage loan is in place the home owner has choices of getting a monthly sum for the borrower’s life or perhaps for a term of several years. Additionally there is an alternative of putting aside a fund that may be drawn down to cover emergencies, similar to a home equity line-of-credit.

The mortgage loan is paid when the owner no longer lives at the home. Pay off is in full with accumulated interest. The HUD reverse mortgage will not be for everybody but does offer the option for many property owners to stay in their own home during retirement.

Learn more about HUD reverse mortgages. Stop by Warren Smoak’s site where you can find out all about a HUD reverse mortgage and what it can do for you.

When you know your home needs repairs to qualify for a loan, how do you get the loan done?

A traditional loan will require you to fix the problems before you get a loan, where a reverse mortgage is more lenient and will allow the repairs to be completed after the loan proceeds are received. This allows you to use the equity form your loan to do the repairs you may not have been able to afford otherwise.

Scenarios we see often are: 1. Carpeting on outdoor decks that has caused dry rot of the deck boards. 2. Peeling paint due to excessive exposure to the sun on the southern side of the home. 3. Potential dry rot in the bathrooms around the tub or toilet.

The required repairs for these problems can be completed after the loan is closed. In fact, any repairs that do not involve safety or health concerns can be done after you loan closes. Your property not having adequate water is an example of a repair that can’t wait, but roofing and dry rot repairs are common and should not be a problem.

How does the lender handle these repairs to make sure they get done? I am glad you asked. You will have to get a contractor’s bid for the repairs and then add 50% to that bid. The extra 50% is to cover any miscalculations to make sure that there is enough money to cover the costs and that you don’t run short. That amount of money is held in escrow, commonly called an “escrow hold back”. Once the repairs are completed, the lender will pay the contractor and refund the remaining money to you.

Are you thinking you want to the repairs yourself and save some money? It is allowed, but there will still need to be a licensed contractor that gives you the bids. It is the starting point to know how much money needs to be put in an escrowed holdback account.

Summarizing what you learned: What make a reverse mortgage unique is you can use the proceeds from your loan to do the repairs, and the escrow holdback is mandatory regardless of who does the repairs.

Before you know what you can do, you need to know how much you qualify for. Try the free reverse mortgage calculator to quickly estimate how much money is available to you. There is also plenty of reverse mortgage information that will help you become educated before you make your decision.

Reverse mortgages allow you to access your home equity four different ways. We will examine those ways so you know how to access your reverse mortgage equity.

1. Lump Sum – You have the option of taking all the funds available to you at one time. You can use the money for anything you want, but the most common use is paying off the existing mortgage (if you have one) on your home.

2. Monthly Annuity – Not a true annuity, but a monthly amount of money that is guaranteed to continue as long as you or your spouse lives in the home. Wouldn’t retirement be more comfortable if you had a little more money each month? There is also a tenure option that gives you a larger payment for a specified period of time. More common though, is the lifetime payment.

3. Credit Line – If you don’t need the money today, and you want to have a reserve account for emergency, this is probably the option for you. There is no interest being accumulated unless you use the money. It will only be charged if you actually borrow it.

4. A Combination of the Above – You can customize your loan to combine any of the above options. If you need a small lump sum, a monthly boost to your income, and you want the rest to be in a line of credit, mixing and matching is the way to go. Additionally you can alter your plan anytime you want to get more monthly or get an additional lump sum for a small fee.

If you choose anything other than a lump sum, know that you will have to take the adjustable rate mortgage (ARM). There is only one option if you choose the fixed rate. It is a lump sum. You will have to draw it all when your loan closes.

Before committing to any reverse mortgage programs, make sure you have all the facts. Visit our website for more reverse mortgage information. There is also a free reverse mortgage calculator to see how much money is available to you.

One of the most misunderstood parts of the home buying process is the inspection. For instance, buyers often mistakenly believe that if the home looks to be in good condition it doesn’t require an inspection. Nothing could be further from the truth! In fact, it is recommended by real estate professionals that every home be inspected whether it is brand-new or 50 years old.

Your best protection against buying a home that is substandard in any way is to have it inspected by a qualified home inspector. It can be difficult as you have probably falled in love with the house and are imagining how your children will look playing in the garden. You don’t want to think that there could possibly be anything wrong with your future home, but isn’t it better to know sooner rather than later that the roof will need replacing in a year or two.

While it may seem costly to spend $300-$500 on a home inspection, it is a lot cheaper than going to see an attorney and starting a court case to get the $5,000 bill for a new drainline paid by the old owners who knew about the problem when they sold. People are not always dishonest, sometimes they genuinely think that the plumbing leak in the bathroom doesn’t matter as it occured a few months ago.

The simplest and easiest way to protect yourself is to have a certified home inspector to really go over the house before you purchase it. Make sure that your real estate agent gives you plenty of time in the contract to have your inspection and ask the seller to fix any defective items. Some states even allow for a due diligence time period meaning that the buyer can get out of the contract for any reason during that time period whether it is inspection related or not.

Remember the home inspector is working for you so if you are nervous about something, whether it is the tree that seems to lean into the house or the funny noise coming from the lights, make sure to ask him while he is there. It is a wise idea to make a list of questions before he comes to inspect the house, so nothing is forgotten. Once he is gone then it is too late to ask him to take a look at something.

Wondering what a reverse mortgage is exactly? I have no simple way to explain but if you are at or approaching retirement age then it is well worth looking into.