Reverse mortgage Arizona is the only way homeowners can access property equity without losing property ownership. Therefore, reverse mortgage AZ allows you to fund retirement without selling or downsizing for seniors struggling with low financial capabilities. Indeed, just like other loans, the reverse mortgage provides a lump-sum or a credit line that the property owner can access when needed depending on the property’s current market value.
Unlike the conventional home loan, the property owner does not have to provide proof of income or good credit to qualify for the reverse mortgage AZ. Therefore, the reverse mortgage becomes a good alternative for seniors looking to finance their retirement. This post looks at the different facts you need to know about the reverse mortgage. In that regard, if you are interested in finding out if a reverse mortgage is for you, this post elaborates on what you need to know to make a decision.
What exactly is a Reverse Mortgage?
A reverse mortgage is a home loan allowing seniors who have celebrated their 62nd birthday to withdraw some home equity converting it into readily available cash. The reverse mortgage is a type of loan, only that it comes with age restrictions and that the applicant is not required to provide proof of income or a credit score to qualify.
Therefore, the reverse mortgage is the opposite of the traditional home loan. Instead of making monthly mortgage repayments, the lender pays to your account. However, the borrower must keep paying the property taxes and homeowners insurance plus other related property maintenance costs.
Where Do I Get the Reverse Mortgage AZ?
The reverse mortgage AZ is available from the Home Equity Conversion Mortgages, commonly called the HECMs. These have to be federal housing administration approved. Thus, the reverse mortgage borrower has to choose an FHA approved mortgage lender. Apart from the FHA approved reverse mortgage lenders, other non-HECM mortgage lenders offer their reverse mortgage products.
What are the Requirements To Qualify for HECM?
The reverse mortgage borrower has to meet various requirements to qualify for the reverse mortgage. Here are the basic requirements you need to complete before applying for a reverse mortgage.
- You must be 62 years of age and above.
- The applicant and the eligible spouse must be named on loan, even if the spouse is not a co-borrower.
- You must live in the property as the primary residence.
- Provide proof that you do not have delinquent federal debts
- Attend a mandatory counseling session with a HECM approved counselor
- The property meets all the FHA requirements and flood standards.
- Keep paying the property taxes and the homeownership insurance plus other property maintenance-related
Therefore, before applying for a reverse mortgage AZ, you ought to consider the facts outlined in the above qualification criteria. Talk to an experienced mortgage broker to find out whether you qualify for the reverse mortgage. The reverse mortgage brokers will also advise on the best FHA approved reverse mortgage lenders in your region.
What are the pros and cons of Reverse Mortgage?
Before you have applied for a reverse mortgage, you must make sure that you have evaluated the pros and cons of a reverse mortgage. Let’s start with the advantages of a reverse mortgage.
Advantages of Reverse Mortgage Arizona
● Potential To Receive Regular Income
So long as you keep paying property tax and property maintenance costs, you will keep receiving regular income through the reverse mortgage. Besides, the borrower has to keep staying at the property as the primary residence.
● Excluded From Tax
The payments received through the reverse mortgage are not considered taxable income. Therefore, the borrower does not have to worry about being taxed when receiving payments from the FHA approved reverse mortgage lender.
● Easier Qualification Criteria
Another top benefit of the reverse mortgage is that it comes with ease of qualifying for the loan. All the applicant has to provide is proof they have attained the minimum age to qualify, and property equity is substantial to guarantee the borrowed amount. There are no requirements to verify the credit score and income source. It is the case with conventional home loan.
● Re-Course Loan
Reverse mortgage Arizona is considered a none recourse home loan. Thus, you cannot owe more than the current property value.
Cons of Reverse Mortgage
Just like anything that comes with advantages, the reverse mortgage has its share of disadvantages. Let us evaluate the weaknesses of the reverse mortgage.
● Age Limit
The reverse mortgage imposes specific minimum age requirements to qualify. Thus, the youngest reverse mortgage applicant is expected to be 62 years old.
● Comes with Several Costs
The reverse mortgage does not come without various costs of getting the mortgage. Fees include the mortgage insurance charged on every loan borrowed.
Before submitting a reverse mortgage application, bear in mind the above considerations. Besides, consider hiring an experienced reverse mortgage broker.