What Is A Reverse Mortgage – Tampa FL

Reverse mortgages (generally known as Home Equity Conversion Mortgages, shortened to HECM) are serving to older home owners in Tampa Florida attain additional monetary security and enjoy their retirement years to the fullest extent.

The HECM FHA insured reverse mortgage can be used by senior home owners age 62 and older to transform the home equity in their property into a monthly flow of extra cash flow and/or a line of credit to be repaid after they do not live in the house.

The loan, often called HECM, is funded by a lending institution such as a mortgage lender, traditional bank, credit union or savings and loan association. To help the home-owner in making a knowledgeable decision of if this program fulfills their requirements, they are required to receive consumer education and counseling by a HUD-approved HECM counselor.



HECM counselors will talk about program eligibility requirements, financial consequences and alternatives to receiving a HECM and specifications for the home loan becoming due and payable. Upon the completion of HECM counseling, the home-owner must be able to make an independent, informed decision of whether the product will fulfill their needs.

Tampa home-owners who satisfy the eligibility requirements can complete a reverse mortgage application by speaking to a FHA-approved lender like a bank, loan company, or savings and loan association.

Borrower Requirements In Order To Get A Reverse Mortgage In Tampa FL:

Age 62 years of age or older
Own your property as well as have substantial equity
Occupy your property as a primary residence
Taking part in a consumer information session provided by an authorized HECM counselor

Mortgage Amount Based On:

Age for the youngest applicant
Current interest rate
Lesser of appraisal value or the FHA insurance limit

Financial Requirements:

Income and credit history requirements will be required of the borrower
No repayment as long as the home is the primary residence
Closing costs may be financed in the mortgage

Property Requirements:

Single family home or 1-4 unit house with one unit lived in by the homeowner
HUD-approved condos
Manufactured homes on property
Meet FHA property requirements and flood requirements

How a Home Equity Conversion Mortgage Program Works For Tampa Homeowners

Homeowners 62 and older which have repaid their house loans or have only small mortgage amounts remaining, and are also currently residing in the property are eligible to take part in HUD’s reverse mortgage loan.

The loan makes it possible for property owners to borrow against the equity in their properties. Homeowners can choose from five payment plans:

Tenure – equal monthly installments as long as at least one borrower lives and continues to occupy the property as a principal residence.
Term – equal monthly installments for a fixed period of months selected.
Line of Credit – unscheduled payments or in installments, at times and in amount of borrower’s choosing until the line of credit is exhausted.
Modified Tenure – combination of line of credit with monthly payments for as long as the borrower remains in the home.
Modified Term – combination of line of credit with monthly payments for a fixed period of months selected by the borrower.



Homeowners whose circumstances change can restructure their payment selections for a nominal fee of $20. Fees can vary depending on Lender.

Unlike ordinary home equity loans, a HUD reverse mortgage doesn’t require repayment so long as the property is the borrower’s principal residence. Mortgage lenders recover their principal, plus interest, once the house is sold. The rest of the value of the home goes to the homeowner or to their heirs. You can’t ever owe more than your property’s appraisal value.

If the sales proceeds are insufficient to cover the total amount payable, HUD will pay the mortgage lender the amount of the deficiency. HUD’s Federal Housing Administration (FHA) collects an insurance premium from all of the borrowers to provide this coverage. That is the great thing about the HUD™ FHA guarantee.

The amount of money a homeowner may borrow is dependent on what their age is, the current interest rates, other loan charges and the appraised value of their house or FHA ‘s mortgage limits for their area, whichever is less. Usually, the more valuable your home is, the older that you are, the lower the rate, the more you can borrow.

There isn’t any asset or cash flow limits on homeowners obtaining HUD’s reverse house loan.

There are no restrictions on the value of properties getting qualified for a HUD reverse mortgage. The value of the house will be determined by an appraisal. Nonetheless, the amount that may be borrowed is derived from the lower of the appraisal amount or FHA mortgage limit, which is $675,750.

HUD collects funds from insurance premiums charged to the homeowners who obtain HECM mortgages. Homeowners are charged an upfront insurance premium which is 2% of the maximum claim amount which may be borrowed as well as a .5 percent annual premium.