Help for Surving Spouses of Reverse Mortgages

 The Federal Housing Administration will allow government-insured reverse mortgage lender to hold off on foreclosing properties for up to 60 days to give surviving spouses time to make other arrangements.

Lenders have authority to request for assistance from FHA and the latter will bear the cost of any forbearance granted.

This short term solution is welcome news for grieving spouses force with the prospect of leaving their homes. Reverse mortgages can be useful tools but can also be terrible financial mistakes whenever one spouse survives the other without other financial resources to cover the payment due to the balance upon the borrowers death. Surviving spouses will have time to organize their affairs without the prospect of an eviction following a foreclosure sale.

Overview of Reverse Mortgages

Homeowners interested in reverse mortgage are required to meet with a counselor to discuss their options and loan terms.  Potential borrowers must meet several requirements including the age of the borrower and the type of propert involved.

Borrower Requirements

You must:

  • Be 62 years of age or older

  • Significant equity in the home

  • Reside in the home as your principal residence
  • Be able to pay property taxes, insurance and Homeowner Association fees, etc.

  • Participate in counseling with a HUD- approved counselor


Property Requirements

The following eligible property types must 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 meets FHA requirements


Financial Requirements

  • Your credit worthiness is evaluated by looking at your credit history, income and expenses.


What are the payment plans available:

  • Monthly installments as you long as you live in th ehome

  • Fixed payments – you can choose to receive payments over time.

  • Use the loan as a line of credit – access the funds whenever you choose.

  • Combined payments and line of credit– combination of line of credit and scheduled monthly payments for as long as you remain in the home.

  • OneLump Sum – a single payment payable to you at closing.


How much money can you get out of your home?

Several factors control the amount of equity you can receive in the form of a reverse mortgage. These include:

  • Your age or age of all borrowers

  • Interest rate

  • Your home’s fair market value

  • Cost of the mortgage insurance



As with any mortgage, reverse mortgages have several fess that you should keep in mind. These fees and any other costs should be addressed before you sign any documents regarding the loan so that you know what you are getting yourself into. The most common fees are:

  1. Mortgage Insurance Premium
    You are required to purchase FHA mortgage insurancewhich can be financed from the loan proceeds.

  2. Miscellaneous Fees
    Fees related to an appraisal, title search and insurance, surveys, inspections, recording fees, mortgage taxes, credit checks and other fees are your responsibility.

  3. Origination Fee
    Your broker earns a fees for generating the loan which you are responsible for.

  4. Servicing Fee
    You will have a small administration fee as well.


This is just a brief overview. Always consult a knowledgeable professional before taking action.


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