Reverse mortgage opportunities have been made available for numerous senior citizen homeowners over the past months and, as a result of financial strains in the lives of many homeowners, more individuals are beginning to seek out reverse mortgages like those offered from the FHA. However, certain programs, like the FHA reverse mortgage plan, require that homeowners go to counseling before they complete the reverse mortgage process.
This program from the FHA, which is also called the Home Equity Conversion Mortgage plan, has allowed senior homeowners to access equity in their home for numerous reasons. However, there are problems which may be associated with a reverse mortgage that could cause a great deal of financial strain for a senior homeowner if they were unable to meet the conditions and repayments on a reverse mortgage loan.
While homeowners who seek out these reverse mortgages have often done so for a variety of reasons that range from meeting medical costs, home repairs, investing, or simply as a way to access capital later in life, homeowners must be aware that problems can arise in a reverse mortgage which could necessitate that a homeowner begin repaying this type of loan.
When all conditions are properly met, a typical reverse mortgage will not require a homeowner to make any repayments on their home loan, but if a homeowner moves, is unable to claim their home as their principal residence for a year, or fails to pay property taxes, they may be required to begin repaying their reverse mortgage debt. Obviously, since repayments are not made on this type of home loan, interest can continue to build and eventually add up to a sizable sum.
Usually funds from the sale of a home after the homeowner passes away are what is used to repay the reverse mortgage debt, but homeowners are still cautioned to explore other options before turning to a reverse mortgage. Counseling, which is required for homeowners who are thinking of obtaining an FHA reverse mortgage, may provide other assistance options for homeowners who may be in need of capital from a reverse mortgage.
As an example, some homeowners have opted to simply relocate to a more affordable home, if financial troubles have become overwhelming in their current situation. While this counseling for homeowners seeking a reverse mortgage is no guarantee, it’s hoped that homeowners who are seeking a reverse mortgage loan will be able to better educate themselves on what is required and problems that may arise before they proceed with borrowing money against their home’s equity later in life.