Important Facts About Hawaii Reverse Mortgage

uring their retirement years, many Hawaii senior homeowners often find themselves struggling to make ends meet. Currently, close to a third of all retirees are getting more than ninety percent of their monthly income from Social Security.

However, individuals who have adequate equity in their home are able to supplement their Social Security income by using the proceeds from a reverse mortgage.
The reverse mortgages derivesits name based on the fact that instead of making a monthly mortgage payment where the balance goes down each month, there is no monthly mortgage payment made therefor the balance goes up because the interest is accumulating

By working with a reverse mortgage lender in Hawaii, retirees are in a position to tap into their home equity without having to expose themselves to the risk that comes with the usual mortgage. Additionally, they are not exposed to the process of offloading their property and having to move into smaller or less expensive housing. Instead, the senior can stay in the comfort and safety of their family home.

Before making the decision on whether to apply for a reverse mortgage, it is imperative to know what it is you are getting into. Below are facts that any person considering a reverse mortgage needs to know:

Hawaii Reverse Mortgages Come With Different Payout Options

As a retiree in Hawaii, you will be provided with a variety of payout options, all designed to allow you to tap into your available home equity.
For instance, the Federal Housing Administration will provide you with five diverse payment plans. You can choose to take equal monthly payments, which will run for as long as you remain alive, and as long as you remain in your home. You may also opt to go for one that comes with a fixed term (years), after which you will immediately stop receiving the payments, even if you are still residing in your home.

You could also be provided with a flexible credit line, which allows you to make a decision on the amount you would like to receive, and when you would like to take the money out. Or you can take a lump sum of cash. Or you may opt to take a combination of these.

The Reverse Mortgage Will Only Provide a Portion of the Available Home Equity

The Hawaii reverse mortgage will not provide you with access to all your available home equity. Instead, the Federal Housing Administration will make calculations on your total mortgage amount based on the home’s appraisal value, theage of the current youngest borrower, and the prevailing interest rates.

Additionally, you will also need to pay the reverse mortgage costs, which include third-party lender expenses, servicing, and origination fees, as well as mortgage insurance premiums.

In many cases, the lender will work these costs into the amount that they have made available to you, and this will further reduce your net proceeds.

To find out how much you qualify for, and whether a reverse mortgage is right for you, consult the author of this article to discuss the pros and cons. For more information you can also visit: www.AlohaMortgageSolutions.com. There you will find two short video’s, one title “Reverse Mortgages Explained;” and the other, “Testimonials of Real Hawaii Clients.”

For a FREE, no-obligation quote, contact Daniel Nicolosi at Harbor Financial Group – Your Aloha Mortgage Solution in Honolulu. You can reach him directly at (808) 799-8218 on Oahu; or Toll Free at 888-423-2468 from the Neighbor Islands. Within 10 minutes he can tell you how much you are eligible for.

“YOU’VE INVESTED A LIFETIME, NOW REAP THE REWARDS!”

Why prefer FHA Insured Reverse Mortgage over Single-purpose or Proprietary?

Both a Hawaii reverse mortgage and a home equity loan are commonly used options by older Americans to tap into the equity in their home. If you have owned your home for a long time to be able to pay the balance loan and free up some equity, both loan options can be viable ones to consider for any planned or unplanned expenses in the old age.

The three types of reverse mortgages are single-purpose, federally insured reverse mortgages and the proprietary. A single-purpose reverse mortgage is offered by the state, local and non-profit agencies, and is considered the least expensive process. Home equity conversion mortgages (HECM) are federally insured reverse mortgages backed by the U.S. Department of Housing and Urban Development. The proprietary type of Reverse mortgage is used generally for a larger advance at a high value.

Similar Link : Should You Consider HECM Reverse Mortgage For Your Retirement?

There is a big difference between a home equity loan and a Reverse mortgage Honolulu. With a home equity loan, you’ll get either an account with a debit card or checks to write against the balance of your approved loan amount. But with a reverse mortgage, you have a choice to get a lump sum payout or a monthly payments.

There are well-defined standard rules to qualify for a reverse mortgage loan. The borrower must be 62 years or more and have significant equity in their home. With an HECM for Purchase, the borrower must have enough money to make the initial investment. With all HECM Reverse Mortgage loans, the owner need to maintain the home and pay the property taxes as well as property insurance. The loan becomes due when the homeowner no longer lives in the home full time or passes away.

There are major benefits of Hawaii reverse mortgage. A Home Equity Conversion Mortgage (HECM) is commonly known as a reverse mortgage. This is a Federal Housing Administration (FHA) insured loan. This type of mortgage loan enables people to access some part of the home equity to obtain funds which are totally tax free. They also don’t have to make monthly mortgage payments. With an HECM loan, borrowers still own their home. These loans can be beneficial for senior homeowners who need extra funds to supplement their retirement income.

The advantages are:

•    You can buy a home that better fits their needs
•    You can move to friends, medical facilities, etc.
•    You can purchase a new home while preserving their cash.
•    You don’t have to pay any monthly mortgage payments for the life of the loan.

Must Read : Hawaii Reverse Mortgage Pros And Cons

The amount of money the borrower can receive with both a traditional reverse mortgage and an HECM for Purchase is based on various factors. The age of the youngest borrower or non-borrowing spouse and the lesser of the appraised value of your home sale price or the maximum lending limit are most important factors. Generally, if the borrower is older, then he / she will be eligible to receive more money. It is important to know that only specific individuals meeting the terms and conditions will qualify for the Reverse mortgage loans.

Everything You Need To Know About HECM Reverse Mortgage

HECM or Home Equity Conversion Mortgage, which is commonly known as the reverse mortgage is one of those mortgage solutions that are designed for borrowers over the age of 62. These are federally insured loans that are truly a mortgage in reverse. These are an FHA’s reverse mortgage solutions that allow you to take out a portion of the equity in your home if your financial situation calls for it. In this way, borrower’s current monthly payment is eliminated and he is given an access to the available equity in his home or in some circumstances, to purchase a primary residence as well. As these reverse mortgage solutions are insured by the federal government so it is advisable that seniors interested in this kind of loan should apply for it through a Federal Housing Authority approved lender only.

Highlighting Some Terms Of HECM

•    Furthermore, on availing HECM, you are not subjected to any monthly payments or fees instead you get a monthly cash payment until you don’t use the mortgaged home as your primary residence

•    Over the time this reverse mortgage balance will grow. Since monthly payments have already been eliminated so the loan will yield an interest charge each month, which will be added to the balance of the loan

•    In case the borrower dies or sells the property, the cash, interest and finance charges will be repaid through the equity in the home itself

•    Once the debt is paid, any remaining proceeds after it will either be retained or left to the surviving family members. In no ways, your spouse or loved ones can be held responsible for this debt

Must Read : Do’s And Don’t of Reverse Mortgage Hawaii

Eligibility Criteria For HECM

•    Qualifying this type of financial product demands you to be at least 62 years old

•    An eligible candidate should either own a property that is paid off or has substantial equity in the home or must be living in the property as a principal residence

•    You should not be overdue with any federal debt and must have the finances to pay costs for your property, including taxes, insurance and associated fees

•    The application process also requires you to attend official information session on HECM in order to make things clear to you in advance

•    Properties that can get you these mortgage solutions are either single family property or if you are occupying one of the units of a multi-unit property, as well as, certain manufactured homes and approved condos

Similar Link : Hawaii Reverse Mortgage: Questions Seniors Must Ask Before Applying One!

The Factors That Decide The Amount Of Money You Will Get

•    The monthly payment of the borrower will depend on the following:

# The amount of equity you have
# Your age
# The current interest rate

•    When you will apply for HECM, everything will be verified by your lender, which will cover your income, assets, expenses, good credit as well as how up to date you are on your taxes and insurance premiums

•    If you decide to go with a fixed-rate loan, you will receive the same amount of money each month, which is termed as Single Disbursement Lump Sum Payment Plan

•    For the ones who want to opt for an adjustable rate, they can choose between fixed monthly payments or flexible monthly payments funded by a line of credit or the combination of the two

HECM And The Associated Costs

•    When you apply for HECM, the cost of these reverse mortgage solutions will include an insurance premium between .5 and 2.5 percent of the total loan amount that covers any third-party charges, title search and insurance, and inspections

•    There will be an origination fee of up to $6,000 along with $35 as monthly servicing fee

It is completely your choice whether you want to finance these costs as a part of the mortgage, (which will reduce the total amount of payments you will receive) or you want to pay these costs upfront.

On the whole, HECM is those reverse mortgage solutions that give you the flexibility to have an inflow of ready cash. The best part is all payments are delivered in increments so that you don’t run out of income as you age. Being backed by FHA is its biggest plus point as it gives you the assurance that your investment is fully protected. So, when you are thinking about long-term financial retirement plans, there are no better mortgage solutions than HECM. Of course, you have to meet certain requirements before obtaining one.

Reverse Mortgage Hawaii : Feature, Pros and Cons

Most of us cherish a lifetime motive to own a home, which generally materializes being in an active economic pursuit. We have heard a lot about reverse mortgage Hawaii on television, internet or from friends but we are not pretty sure about what exactly it is.

What is Reverse Mortgage?

Numerous seniors wind up with a constrained pay, however a lot of value in their homes. A reverse mortgage Hawaii is a tool that permits you to remove the value from your home without selling it or make payments. Like the name suggests, a reverse mortgage honolulu or Hawaii is the invert of a customary home loan. The estimation of your home is separated into value and obligation. With a conventional home loan you make installments on your advance to the bank every month, expanding your value and diminishing your obligation. In the end, if you remain in the home, you will claim it without a worry in the world.

Features of Reverse Mortgage Hawaii

• It is intended for property holders matured over 60 years. If the life partner is a co-candidate, then there is a base age prerequisite for both co-candidates.
• The candidate must be the proprietor of the house to be sold, with clear titles and no question. Numerous banks may require confirmation that the property is the essential private address of the candidate. If the candidate moves out of this house, the bank should be educated.
• The most extreme credit sum raised can be up to 60% of the market estimation of the property and the greatest home loan term by and large is 15 years, however a few banks are presently offering 20 year terms.

Must Read : What to Look for Reverse Mortgage Lenders Hawaii?

• The advance gets to be expected when the last surviving borrower kicks the bucket or offers the house. The bank gives a choice to the legitimate beneficiary to settle the credit inside a given day and age, falling flat which the loan amount is settled by auctioning off the property.
• Foreclosure of reverse mortgage Honolulu or Hawaii is additionally permitted in the event that the candidate does not wish to proceed with it.

Pros of Reverse Mortgage

• Reverse home loan is the ideal budgetary solution for senior subjects who remain alone with no sort of money related support.
• If the candidate is remaining in a property that he wouldn’t like to sell for reasons unknown, then this is the main method for getting money related support.

Read More : How a Reverse Mortgage Distinguish From a Conventional Mortgage?

• There is additionally an alternative of single amount installment to the candidate rather than month to month or quarterly premise, to deal with sudden needs. The residency choices are likewise adaptable.
• The sum got through reverse mortgage Honolulu is completely tax exempt.

Cons of Reverse Mortgage

• HECM credit adjusts increments after some time. .
• Fees can be higher than a customary home loan.
• Initial FHA Mortgage Insurance Premium.
• Annual FHA Mortgage Insurance Premium.
• Loan start charge might be higher than traditional home loans.
In order to avail the best reverse mortgage in Hawaii, you need to find professional reverse mortgage lenders Hawaii.