HECM

HECM Woodburn Oregon – What’s A HECM

What You Want To Know About Getting A HECM in Woodburn Including, Options, Costs, Requirements and Obtaining The Best Offer

The HECM (Home Equity Conversion) program enables elderly homeowners in Woodburn OR to take out some of the equity of their home in the form of monthly payments for life or a fixed term, or in a lump sum, or through a credit line. This reverse mortgage loan allows families to remain in their home while using some of its equity. The total income that an owner can receive through the program is the maximum claim amount, which is calculated with a formula including the age of the owner, the interest rate, and the value of the home. The borrower continues to be the owner of the home and may sell it and move at any time, keeping the sales proceeds that exceed the mortgage balance. No repayment is required up until the borrower moves, sells, or dies.

How the HECM Program Works in Woodburn OR

There are plenty of factors to consider before determining if getting a HECM loan in Woodburn is right for you. To aid in this process, you will need to meet with a HECM counselor to discuss program eligibility requirements, financial implications and alternatives to receiving a HECM reverse mortgage in Woodburn and repaying the loan. Counselors will go over provisions for the mortgage becoming due and payable. Upon the completion of HECM counseling, you should be capable of making a completely independent, educated decision of whether the product will meet your particular needs. You can search online for a HECM counselor or call (800) 569-4287 toll-free.

There is borrower and Woodburn property eligibility qualifications that must be met. You can use the listing below to see if you qualify. If you meet the eligibility criteria, you can complete a reverse mortgage application by contacting an FHA-approved lender. You can search online for a FHA-approved lender or ask the HECM counselor to provide you a list. The lender will discuss other requirements of the HECM program, for instance first year payment limitations, available payment options, the loan approval process, and repayment terms.

HECM Borrower Requirements Living in Woodburn

You must:

Be 62 years of age or older
Own the home outright or paid-down a considerable amount
Occupy the property as your principal residence
Not be delinquent on any federal debt
Have financial resources to continue for making timely payment of recurring property charges which includes property taxes, insurance and Homeowner Association fees, etc.
Participate in a consumer information session given by a HUD- approved HECM counselor

Woodburn Property Requirements with the HECM

The following eligible property types in Woodburn are required to meet all FHA property standards and flood requirements:

Single family home or 2-4 unit home with one unit occupied by the borrower
HUD-approved condominium project
Manufactured home that satisfies FHA requirements

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HECM Financial Requirements of Borrowers in Woodburn OR

Income, assets, monthly living expenses, and credit standing will be verified.
Timely payment of real estate taxes, hazard and flood insurance premiums are going to be verified

For adjustable interest rate mortgages, you can choose one of the following payment plans:

Tenure – equal monthly payments provided that at least one borrower lives and continues to live in the property as a principal residence.
Term – equal monthly payments for a fixed period of months selected.
Line of Credit – unscheduled payments or in installments, at times and in an amount of your choosing until the credit line is exhausted.
Modified Tenure – combination of line of credit and scheduled monthly payments for as long as you continue to live in the home.
Modified Term – combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.

For fixed interest rate home loans, you will receive the Single Disbursement Lump Sum payment plan.

Mortgage Amounts Are Based On the Following

The amount you may borrow will depend on:

Age of the youngest borrower or eligible non-borrowing spouse
Current interest rates; and
Lesser of:
appraised value;
the HECM FHA mortgage limit of $679,650; or
the sales price (only applicable to HECM for Purchase)

When there is more than one borrower and no eligible non-borrowing spouse, the age of the youngest borrower must be used to determine the amount you’re able to borrow.

HECM Loan Costs

You can pay for almost all of the costs of a Woodburn HECM by financing them and having them paid from the proceeds of the loan. Financing the costs means you do not have to pay for them out of your pocket. Having said that, financing the costs decreases the net loan amount available to you.

The HECM loan includes several charges and fees, 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. The initial MIP will be 2%. Over the life of the loan, you will be charged an annual MIP that equals 0.5% of the outstanding mortgage balance.

Mortgage Insurance Premium
You will incur a cost for FHA mortgage insurance. The mortgage insurance guarantees that you’re going to get expected loan advances. You can finance the mortgage insurance premium (MIP) as part of your loan.

Third Party Charges
Closing costs from third parties can include an appraisal, title search and insurance, surveys, inspections, recording fees, mortgage taxes, credit checks and other fees.

Origination Fee
You will pay an origination fee to pay the lending company for processing your HECM loan. A lender may charge the greater of $2,500 or 2% of the first $200,000 of your home’s value plus 1% of the amount over $200,000. HECM origination fees are capped at $6,000.

Servicing Fee
Mortgage lenders in Woodburn or their agents provide servicing throughout the life of the HECM. Servicing includes sending you account statements, disbursing loan proceeds and making sure that you satisfy loan guidelines including paying real estate taxes and hazard insurance premium. Lenders may charge a monthly servicing fee of no more than $30 if the loan has an annually adjusting interest rate or has a fixed interest rate. The lender may charge a monthly servicing fee of no more than $35 if the interest rate adjusts monthly. At loan closing, the lender sets aside the servicing fee and deducts the fee from your available funds. Each month the monthly servicing fee is added to your loan balance. Lenders may also choose to include the servicing fee in the mortgage interest rate.

Shopping for a Home Equity Conversion Mortgage in Woodburn OR

If you are thinking about getting a HECM in Woodburn, check around. Determine which type of reverse mortgage loan may be best for you. That could be determined by what you want to do with the cash. Evaluate the options, terms, and fees from several HECM mortgage lenders in Woodburn. Learn as much as you are able to about reverse mortgages before you speak to a counselor or mortgage lender. And ask plenty of questions to ensure that a HECM will work for you – and that you’re obtaining the right kind for you.

Here are some things to consider:

Do you need a HECM to pay for home repairs or property taxes? In that case, find out if you are eligble for any low cost grants in your Woodburn. Employees at the Woodburn Area Agency on Aging might know about the programs in your Woodburn. Look for the closest agency on aging at eldercare.gov, or call 1-800-677-1116. Ask about “loan or grant programs for home repairs or improvements,” or “property tax deferral” or “property tax postponement” programs, and how to apply.

Do you live in a high value house? You might be qualified to borrow more money by using a proprietary reverse mortgage. But the more you borrow, the bigger the fees you will pay. In addition, you might consider a HECM loan. A HECM counselor or a lender in Woodburn can assist you evaluate these sorts of loans side by side, to determine what you will get – and what it costs.

Evaluate fees and costs. This bears repeating: research options and rates and evaluate the costs of the HECM loans available to you in Woodburn. Even though the mortgage insurance premium is normally the same from lender to lender, most loan costs – including origination fees, interest rates, closing costs, and servicing fees – can vary among loan companies.

Understand total costs and loan repayment. Ask a counselor or lender to explain the Total Annual Loan Cost (TALC) rates: they reveal the estimated annual average cost of a HECM, including all of the itemized costs. And, no matter what kind of HECM you’re considering in Woodburn, recognize all the reasons why your loan may need to be repaid prior to were planning on it.

What You Need To Know About HECM Loans in Woodburn OR

If you get a HECM of any kind, you receive a loan in which you borrow against the equity in your house. You keep the title to your home. Instead of paying monthly mortgage payments, though, you receive an advance on part of your home equity. The money you will get usually is not taxable, and it generally won’t affect your Social Security or Medicare benefits. Once the final surviving borrower dies, sells the home, or no longer lives in the home as a primary residence, the HECM will have to be repaid. In certain situations, a non-borrowing spouse may be able to continue to live in the home. Below are a few facts to consider about home equity conversion mortgages in Woodburn OR:

You will owe more over time. As you borrow money through the home equity conversion mortgage, interest is added onto the total amount you owe each month. Which means the total amount you owe gets bigger as the interest on your loan adds up over time.

Interest rates might change over time. Nearly all HECM’s have variable interest rates, which are linked with a financial index and adjust with the market. Variable rate loans tend to provide you with more choices on how you get your money through the HECM loan. Several reverse mortgages – mostly HECMs – offer fixed rates, but they tend to require you to take your loan as a lump sum at closing. Usually, the total amount you can borrow is less than you have access to with a variable rate loan.

Interest is not tax deductible every year. Interest on reverse mortgages is not deductible on tax returns – until the loan is paid off, either partially or in full.

You must pay other costs related to your home. In a HECM, you retain the title to your
Woodburn home. That means you are responsible for property taxes, insurance, utilities, fuel, maintenance, as well as other expenses. And, if you don’t pay your property taxes, keep homeowner’s insurance, or maintain the home, the lender might require you to repay your loan. A financial assessment is mandatory when you apply for the mortgage. As a result, your lender might demand a “set-aside” amount to pay your taxes and insurance during the loan. The “set-aside” reduces the amount of funds you can get in payments. You are still responsible for maintaining your home.

What happens to your spouse? With HECM loans, if you signed the loan paperwork and your spouse didn’t, in a few instances, your spouse may continue to reside in the home even after you pass away if he or she pays taxes and insurance, and continues to take care of the property. However, your spouse will stop getting money from the HECM, since he or she wasn’t part of the loan agreement.

What can you leave to your heirs? HECM’s can use up the equity in your home, this means less assets for you and your heirs. Most reverse mortgages have something called a “non-recourse” clause. Which means that you, or your estate, can’t owe more than the value of your home when the loan becomes due and the home is sold. With a HECM, generally, should you or your heirs need to pay off the loan and keep the home rather than sell it, you will not have to pay more than the appraised value of the home.

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