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Do one need FHA approval for a reverse mortgage?Reverse mortgages are increasing in popularity with seniors who have equity in their homes and want to supplement their income. The only reverse mortgageinsured by the U.S. Federal Government is called a Home Equity ConversionMortgage or HECM, and is only available through an FHA approved lender.
Are reverse mortgages a good idea?They are marketed as a solution to seniors' money problems or a way to more fully enjoy retirement. But reverse mortgages can be hard to understand, and the fees and interest can use up a substantial portion of a homeowner's equity.
How does reverse mortgage work for seniors?A reverse mortgage is a loan for seniors age 62 and older. HECM reverse mortgage loans are insured by the Federal Housing Administration (FHA) and allow homeowners to convert their home equity into cash with no monthly mortgage payments. A reverse mortgage loan uses a home's equity as collateral.
What is the average rate of interest on a reverse mortgage?The average rate of interest on reverse mortgages for seniors depends on a lot of factors including the type of plan that you go with. Essentially, the United States Department of Housing and Urban Development (HUD) publishes statistics each month on all HECM originations and based on this the lenders set their average interest rates. Based on hist